Singapore, Oct 10 (PTI) Negotiations to update the Free Trade Agreement between ASEAN nations and China are almost completed after nearly two years, leaders of both sides announced on Thursday during a summit in Laos.
Certain legal details remain to be ironed out, before the upgrade to the ASEAN-China Free Trade Area (ACFTA) – the second one since its inception in 2010 – will be finalised and signed next year, Channel News Asia reported on Thursday.
“This upgrade to the FTA is an important move, especially in this time of growing protectionism in the world,” Singapore’s Prime Minister Lawrence Wong said during the 27th ASEAN-China Summit in Vientiane, which was attended by Chinese Premier Li Qiang.
“It will send a very clear and important message to everyone on the importance of free trade and win-win market cooperation.” The ACFTA was the Association of Southeast Asian Nations’ (ASEAN) first Free Trade Agreement (FTA) with an external partner, as well as China’s first FTA, Wong noted.
It has facilitated trade between both sides, resulting in them becoming each other’s top trading partner since 2020, he said.
Since 2010, ASEAN’s trade in goods with China has more than tripled, from USD 235.5 billion to USD 696.7 billion last year. China invested USD 17.3 billion in ASEAN last year, making it the bloc’s largest trading partner and the third-largest source of foreign direct investment.
The upgrade will let both parties tap into future growth areas, including the digital and green economies, added the Singapore Prime Minister.
The ACFTA covers a free trade area of over 2 billion people, with a combined gross domestic product of over USD 20 trillion, Singapore’s Ministry of Trade and Industry (MTI) said in a press release on Thursday.
Negotiations for the upgrade had started in 2022, to ensure the agreement remains “relevant, future-ready, and responsive to global challenges”, said the ministry.
It covers new and enhanced rules in areas such as digital and green economies, supply chain connectivity, competition and consumer protection, and micro, small, and medium enterprises.
“Once implemented, the agreement will create a more business-friendly and future-oriented environment for companies to tap into opportunities between ASEAN and China,” said MTI.
“Singapore-based companies will benefit from improved facilitation of trade flows, greater transparency and certainty especially during supply chain disruptions, better protection for consumers, and the opportunity to explore new synergies in emerging areas such as the digital and green economies.” Wong called for all sides to leverage the momentum from the ACFTA negotiations to progressively liberalise the ASEAN-China Air Transport Agreement.
It would facilitate greater trade and investment flows and strengthen people-to-people links between both sides, he said.
He also identified clean energy and climate change as areas where Southeast Asia and China can do more together.
“China can contribute to ASEAN’s transition to cleaner and low-carbon fuels and help strengthen energy resilience in the region,” said Wong.
He added that the regional bloc can tap into China’s expertise in clean energy as it creates an ASEAN power grid.
During the meeting, Wong also said that closer cooperation between the 10-member bloc and China supports the vision of an open and inclusive region, and builds trust and confidence which can help “manage issues that will inevitably arise from time to time”.
“In the South China Sea, ASEAN and China must continue to engage each other regularly to maintain peace and stability, and ensure that disputes are resolved peacefully,” he said.
He reiterated Singapore’s position on the maritime conflict, calling for all parties to adhere to international law and ensure freedom of navigation and overflight.
“We look forward to the expeditious conclusion of a Code of Conduct that accords with international law, including UNCLOS,” Wong said, referring to the 1982 United Nations Convention on the Law of the Sea.
Wong said that the close bond between ASEAN and China goes back for centuries.
“It is a relationship where countries big or small are treated as equals, and work together on the basis of mutual trust, mutual respect and mutual benefit,” he said.
On Thursday, the bloc also commemorated the 35th anniversary of dialogue relations with the Republic of Korea, during the summit between both sides which was attended by South Korean President Yoon Suk Yeol.
The ASEAN-Japan Summit also took place, the first under Singapore’s three-year term as the country in charge of coordinating dialogue between the two sides. It was attended by Japanese Prime Minister Shigeru Ishiba.
The Southeast Asian leaders will also meet with their counterparts from India, Australia and Canada in separate sessions.
The 10 member countries of ASEAN are Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Vietnam, Laos, Myanmar and Cambodia. PTI GS ZH ZH
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