ASEAN SECRETARIAT
JAKARTA
INDONESIA

NEWS RELEASE

30 OCTOBER 2002

ASEAN-CHINA FREE TRADE AREA NEGOTIATIONS TO START NEXT YEAR

JAKARTA (Oct 30) – Negotiations for the ASEAN-China Free Trade Area (FTA) will start next year following the signing of the Framework Agreement on ASEAN-China Comprehensive  Economic Cooperation at the Eighth ASEAN Summit Meeting in Cambodia next week.

ASEAN Secretary-General Rodolfo Severino told delegates at the ASEAN Marketing 2002 Conference held at the ASEAN Secretariat today that the Agreement to be inked by Southeast Asian leaders in Phnom Penh on November 4, would commit ASEAN and China to negotiate the liberalization and promotion of trade in goods and services between them besides creating a transparent and liberal investment regime and providing protection for these investments.

The Agreement would lead to the creation of an ASEAN-China FTA within ten years and pave the way towards closer cooperation in the elimination of tariffs and non-tariff barriers on trade in goods, create an open and competitive investment regime and encourage the simplification and standardization of Customs procedures. It also calls for an “early harvest” provision that involves the quick reduction of tariffs on a number of goods that will take effect within a targeted date of three years from July 1 next year when the Agreement comes into force. The newer ASEAN members like Cambodia, Laos, Myanmar and Viet Nam will be offered special and differential treatment and flexibility in implementation.

“With a deepened AFTA and the creation of the ASEAN-China Free Trade Area, companies operating in ASEAN would have 1.7 billion consumers, with a combined gross domestic product of US$1.5 trillion to US$2 trillion as their potential market,” said Mr. Severino.

The Secretary-General said the region’s marketing community has a large stake in the integration and regionalization of the ASEAN economy and this stake increases as the scope of regionalization expands.

“The ASEAN market has to approach the level of integration of China’s market if the ASEAN economy is to have a chance of competing for investments and for markets in terms of efficiency, productivity and cost,” said Mr. Severino.

He stressed the need for ASEAN to deepen its regional economic integration saying that regional countries have to keep up with competitor countries and groups of countries that are fast opening up their markets and using their natural and human resources to enhance their attractiveness to foreign investors.

The ASEAN-China FTA is expected to increase intraregional trade and investment, improve efficiency and economies of scale and develop a larger market for capital and talent, thereby creating greater opportunities for businesses.

Mr. Severino urged the marketing community to support the move towards free trade and economic integration.

“We need to hear the voice of the marketing community if only to counteract the powerful forces of protectionism that continue to influence policy in ASEAN as well as in the developed world,” said Mr. Severino.

“It will be a substantial contribution to the cause of regionalism and to the progress and prosperity of our peoples.”

ENDS//

Issued by:

GERALDINE GOH
Senior Officer
Public Information
ASEAN SECRETARIAT

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