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China-ASEAN Free Trade Agreement to speed up economic integration

With nearly 22 percent of the world’s total population, the three countries possess about 47 percent of the world’s total foreign exchange reserves and generate almost one-fifth of the world’s total economic output.

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One year after the China-ASEAN Free Trade Agreement was established to benefit a market of 1.9 billion people, East Asian officials and scholars have begun to ponder the ways to integrate the economy of an even larger market.

The East Asia Free Trade Agreement (EAFTA), originally proposed by academia as a must to reduce the region’s excess dependence on trade with the United States and the European Union after the 1997 global financial crisis, is to cover not only the members of the Association of the Southeast Asian Nations (ASEAN) but also three other power engines, namely China, Japan and the Republic of Korea (ROK).

With nearly 22 percent of the world’s total population, the three countries possess about 47 percent of the world’s total foreign exchange reserves and generate almost one-fifth of the world’s total economic output.

Since China, Japan and the ROK have each signed a free trade agreement with ASEAN, when and how to open the negotiations for EAFTA has become a focal topic at an ongoing seminar on trade facilitation in East Asia in this town of east China’s Anhui province.

Prelude of EAFTA talks

In an interview with Xinhua, Naomi Chakwin, an official with the Manila-based Asian Development Bank (ADB), said that many more people have recognized the significance of promoting the China-Japan-ROK free trade agreement and ASEAN’s development, as the three countries were powerful regional economic engines and complex economies.

In 2010, China and ROK concluded their joint studies about the China-ROK FTA. Last year, a study of the China-Japan-ROK FTA was kicked off, while four ASEAN work teams began researching the feasibility of establishing the EAFTA and the Comprehensive Economic Partnership for East Asia.

“We have fairly good conditions to open up the EAFTA dialogues as the mutual cooperation and dependence in trade among ASEAN, China, Japan and ROK have become increasingly integrated,”

said Assistant Commerce Minister of China Yu Jianhua at the opening ceremony of the seminar closing on Friday.

Currently more than half of the total trade of East Asia has been carried out within the region. And China will continue to contribute to the regional integration, said Yu.

According to Sun Yuanjiang, Deputy Director General of Department of International Trade and Economic Affairs of the Ministry of Commerce, China will simplify application procedures for preferential certificates of origin and customs clearance for companies from both regions this year. Further, a platform will be set up for sharing application and verification information to enhance management transparency.

China will also work to hasten bilateral negotiations on health, plant health, technical barriers and trade facilitation to promote trade liberalization and economic and technical cooperation, said Sun.

ASEAN Secretariat officer Anna M. Robeniol also disclosed that a revised protocol on service trade would be signed between ASEAN and China in August to facilitate economic cooperation.

“These ongoing economic integrations provided a rare opportunity for the establishment of the East Asia FTA, and relevant talks should be started no later than 2012,”

said Yu.

Citing the estimates jointly made by experts from the ASEAN, China, Japan and ROK, Yu said that the East Asia FTA would raise the overall annual gross domestic product of ASEAN by 3.6 percent from 2010 to 2020, while China, Japan and ROK would see their annual GDP jump by 0.9 percent, on average, during the same period.

via East Asia’s economic integration to be sped up.

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