ASEAN, China to upgrade trade pact

ASEAN countries and China have agreed to upgrade a 13-year-old agreement to free up trade between the grouping's 10 members and the world's second largest economy.

They will commit to the upgrade at a signing ceremony today. ASEAN leaders will also take stock of ties with Beijing when they meet Chinese Premier Li Keqiang at the ASEAN-China Summit this afternoon.

Minister for Foreign Affairs Vivian Balakrishnan told Singapore reporters yesterday the upgrade "will enhance opportunities for trade, investments and for people to people engagement". "As China continues to rise in the world, greater integration or opportunities and engagement between ASEAN and China is something positive," he added.

China is ASEAN's largest trading partner, while ASEAN is China's third-largest trading partner.

While ties between several ASEAN members and China have been affected by territorial disputes in the South China Sea in recent years, officials have sought to keep tensions in check to manage their impact on the broader picture of a robust, and rapidly growing, economic relationship.

Bilateral trade between China and ASEAN reached some US$480 billion (S$677 billion) last year, with the flow of investments exceeding US$130 billion.

Chinese Vice-Premier Zhang Gaoli recently committed to expanding bilateral trade to US$1 trillion by 2020, as well as an additional investment of US$100 billion to ASEAN over the next five years.

Earlier this month, China and Singapore agreed to launch negotiations to upgrade the China-Singapore FTA during Chinese President Xi Jinping's state visit.

The "Upgrade Protocol" that ministers from ASEAN and China will sign today will amend the Framework Agreement on Comprehensive Economic Cooperation between ASEAN and China, and related agreements on trade and investment. They will improve the existing ASEAN-China Free Trade Area and better align these agreements with current business practices.

The upgrade will also make it easier for ASEAN exporters and service providers to operate in China, and lend their investments greater certainty. Indonesian Trade Minister Thomas Lembong said the upgrade would help increase exports of major Indonesian products like textiles, pulp and paper, furniture and footwear to China.

Singapore took over from Thailand as the country coordinating ASEAN-China relations in August.

Dr Balakrishnan said both sides will celebrate the 25th anniversary of ASEAN-China relations next year, including by holding a commemorative leaders' summit.

Next year has also been designated as a year for greater educational exchanges between the two sides. This will give young people on both sides more opportunities to interact with one another, he added.

This article was first published on November 21, 2015.
Get a copy of The Straits Times or go to straitstimes.com for more stories.