The leaders of Southeast Asian countries and China announced that negotiations to update the free trade agreement between the two regions are almost completed. The upgrade to the ASEAN-China Free Trade Area (ACFTA) will be the second one since its inception in 2010, with certain legal details still needing to be finalized and signed next year. The move is seen as important in the face of growing protectionism globally, sending a clear message about the importance of free trade and market cooperation.
The ACFTA was highlighted as the first FTA between the Association of Southeast Asian Nations (ASEAN) and an external partner, as well as China’s first FTA, marking a significant milestone for both sides. Trade between ASEAN and China has grown substantially since 2010, with ASEAN becoming China’s top trading partner and China investing significantly in the region. The upgrade to the FTA is expected to enable both parties to leverage future growth opportunities in areas such as the digital and green economies.
The ACFTA covers a free trade area of over 2 billion people with a combined GDP of over US$20 trillion, making it a significant economic partnership. The negotiations for the upgrade were initiated in 2022 to ensure that the agreement remains relevant, future-ready, and responsive to global challenges. The Ministry of Trade and Industry in Singapore highlighted the importance of the upgrade in maintaining the competitiveness of the ACFTA and ensuring its continued benefits for both ASEAN and China.
During the 27th ASEAN-China Summit in Vientiane, leaders emphasized the importance of the upgrade to the FTA in the context of increasing protectionism worldwide. The agreement has played a key role in facilitating trade between ASEAN and China, with significant growth in trade in goods and investments between the two regions. China has become ASEAN’s largest trading partner and third-largest source of foreign direct investment, reflecting the strength of the economic relationship between the two parties.
The upgrade to the ACFTA is expected to open up new opportunities for trade and investment in emerging sectors such as the digital and green economies. This will enable both ASEAN and China to capitalize on future growth areas and enhance their economic cooperation. The negotiations for the upgrade are nearing completion, with certain legal details still to be ironed out before the agreement is finalized and signed in the coming year.
In conclusion, the upgrade to the ASEAN-China Free Trade Area represents a significant step towards strengthening economic ties between Southeast Asian countries and China. The agreement is seen as crucial in the current climate of growing protectionism, sending a strong message about the importance of free trade and cooperation. The ACFTA has been instrumental in boosting trade and investments between ASEAN and China, with the upgrade expected to further enhance economic opportunities in emerging sectors. The negotiations for the upgrade are almost complete, with both parties poised to finalize and sign the agreement in the near future.
