During a summit on Thursday ( October 10 ), leaders of both sides announced that negotiations to update the free trade agreement between Southeast Asian nations and China are almost finished.
Before the finalization and signing of the ASEAN-China Free Trade Area (ACFTA ) – the second one since its inception in 2010 – will be finalized and signed next year, some legal matters still need to be ironed out.
Prime Minister Lawrence Wong remarked at the 27th ASEAN-China Summit in Vientiane, where Chinese Premier Li Qiang was present, that” this update to the FTA is an important move, particularly in this time of growing protectionism in the world.”
It will convey to people a very clear and significant message regarding the value of free trade and successful market cooperation.
The ACFTA was the Association of Southeast Asian Nations’ ( ASEAN ) first FTA with an external partner, as well as China’s first FTA, Mr Wong noted.
It has facilitated trade between the two sides, making them the best buying partners of each other since 2020, he said.
Since 2010, ASEAN’s trade in goods with China has more than tripled, from US$ 235.5 billion to US$ 696.7 billion next year. China became the bloc’s third-largest trading partner and third-largest resource of foreign direct investment with US$ 7.3 billion invested in ASEAN next month.
According to Mr. Wong, the upgrade will allow both parties to capitalize on upcoming development trends, such as green and electric economies.
Rest RELEVANT AND FUTURE-READY
The ACFTA covers a free trade area of over 2 billion people, with a combined gross domestic product of over US$ 20 trillion, Singapore’s Ministry of Trade and Industry ( MTI ) said in a press release on Thursday.
Discussions for the switch had started in 2022, to ensure the contract remains “relevant, future-ready, and flexible to international challenges”, said the government.