ASEAN-China FTA to have positive impact on two sides: Singaporean official

The establishment of a free trade zone between China and the Association of Southeast Asian Nations (ASEAN) is expected to have positive impact on the two sides, said spokeswoman of Singapore's Ministry of Trade and Industry Chan Lai Fung on June 24.

In an exclusive interview with Xinhua, Chan said that the ASEAN- China Free Trade Agreement (ACFTA), the first external FTA for ASEAN and the first FTA for China, demonstrates the close relationship between the two parties, which their leaders have determined to develop further.

She described the agreement as comprehensive as it covers goods, services and investment, as well as a dispute settlement agreement to provide a mechanism for the resolution of disputes amongst parties to the FTA.

Asked about the benefit such a deal would bring to Southeast Asia, Chan noted that businesses from both sides will have better chances of accessing into each other's markets as cross-country trade and investments continue to grow.

"When the Trade in Goods Agreement is implemented on July 1 this year, it will see not only reduction and elimination of tariff but also elimination of non-tariff barriers including all WTO (World Trade Organization)-inconsistent quantitative restrictions. This will mean tariff savings for our companies as well as greater certainty for our exports," Chan added.

The Commerce Ministry of China has announced recently that China and the ASEAN have agreed to reduce duties on some 7,445 kinds of products from July 1, a move regarded as a big step toward the forming of the world's biggest free trade zone.

On the follow-ups for the establishment of the ASEAN-China free trade zone after the success in liberalization of trade in goods, Chan explained that the next step going forward will be to achieve an equally ambitious agreement in services.

"Currently, the negotiations on liberalizing the services and investment market in the region are on-going. Our officials are working hard to conclude these negotiations as soon as possible," she said.

Chan is confident that the conclusion of the Trade in Goods Agreement has set the foundation for liberalization of trade within the expanded ASEAN-China region and will be a boost to Singapore-China economic and trade ties.

Statistics from China's Customs Bureau showed that bilateral trade between China and the ASEAN has grown by 20 percent annually since 1990, reaching 105.9 billion US dollars in 2004, up 35 percent over the previous year.

As China's fifth largest export market and fourth largest import source, the ASEAN has enjoyed the positions of being China's fifth largest trading partner for five consecutive years and its largest trading partner in the developing world.

In November 2002, Chinese and ASEAN leaders signed a Framework Agreement for Overall Economic Cooperation between the two sides, formally starting the process to build a free trade zone which covers a total of 1.7 billion people.

Established in 1967 in Bangkok by the five original member countries including Indonesia, Malaysia, the Philippines, Singapore and Thailand, the ASEAN has been enlarged to have Brunei Darussalam, Cambodia, Laos, Myanmar and Vietnam as its members.

Source: Xinhua