The ASEAN–China Free Trade Area (ACFTA) is a

free-trade area A free-trade area is the region encompassing a trade bloc whose member countries have signed a free trade agreement (FTA). Such agreements involve cooperation between at least two countries to reduce trade barriers, import quotas and tariffs, and ...

among the ten member states of the

Association of Southeast Asian Nations ASEAN ( , ), officially the Association of Southeast Asian Nations, is a political and economic union of 10 member states in Southeast Asia, which promotes intergovernmental cooperation and facilitates economic, political, security, mi ...

(ASEAN) and the

People's Republic of China China, officially the People's Republic of China (PRC), is a country in East Asia. It is the world's List of countries and dependencies by population, most populous country, with a Population of China, population exceeding 1.4 billion, slig ...

History

China first proposed the idea of a free trade area in November 2000. Leaders of ASEAN and China thus decided to explore measures aimed at economic integration within the region In Brunei the following year, they endorsed the establishment of an ASEAN–China Free Trade Area. The framework agreement was signed on 4 November 2002 in

Phnom Penh Phnom Penh (; km, ភ្នំពេញ, ) is the capital and most populous city of Cambodia. It has been the national capital since the French protectorate of Cambodia and has grown to become the nation's primate city and its economic, indus ...

Cambodia Cambodia (; also Kampuchea ; km, កម្ពុជា, UNGEGN: ), officially the Kingdom of Cambodia, is a country located in the southern portion of the Indochinese Peninsula in Southeast Asia, spanning an area of , bordered by Thailand ...

, by eleven heads of government.:

Hassanal Bolkiah Hassanal Bolkiah ibni Omar Ali Saifuddien III ( Jawi: ; born 15 July 1946) is the 29th and current Sultan and Yang di-Pertuan of Brunei since 1967 and the Prime Minister of Brunei since independence from the United Kingdom in 1984. He is on ...

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Sultan Sultan (; ar, سلطان ', ) is a position with several historical meanings. Originally, it was an Arabic abstract noun meaning "strength", "authority", "rulership", derived from the verbal noun ', meaning "authority" or "power". Later, it c ...

Brunei Darussalam Brunei ( , ), formally Brunei Darussalam ( ms, Negara Brunei Darussalam, Jawi: , ), is a country located on the north coast of the island of Borneo in Southeast Asia. Apart from its South China Sea coast, it is completely surrounded by t ...

Hun Sen Hun Sen (; km, ហ៊ុន សែន, ; born 5 August 1952) is a Cambodian politician and former military commander who has served as the prime minister of Cambodia since 1985. He is the longest-serving head of government of Cambodia, and ...

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Prime Minister of Cambodia The prime minister of Cambodia ( km, នាយករដ្ឋមន្ត្រីនៃកម្ពុជា, ) is the head of government of Cambodia. The prime minister is also the chairman of the Cabinet of Cambodia, Cabinet and leads the ex ...

Megawati Soekarnoputri Diah Permata Megawati Setiawati Sukarnoputri (; born 23 January 1947) is an Indonesian politician who served as the fifth president of Indonesia from 2001 to 2004. She previously served as the eighth vice president from 1999 to 2001. Megawati i ...

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President of Indonesia The President of the Republic of Indonesia ( id, Presiden Republik Indonesia) is both the head of state and the head of government of the Republic of Indonesia. The president leads the executive branch of the Indonesian government an ...

Bounnhang Vorachith Bounnhang Vorachit ( lo, ບຸນຍັງ ວໍລະຈິດ; born 15 August 1938) is a Laotian politician. He was previously General Secretary of the Lao People's Revolutionary Party and President of Laos from 2016 to 2021. Early life Boun ...

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Prime Minister of Laos The Prime Minister of the Lao People's Democratic Republic, formerly the chairman of the Council of Government of the Lao People's Democratic Republic, is the head of government of Laos. The highest position in the government, they direct t ...

), Mahathir bin Mohamad (

Prime Minister of Malaysia The prime minister of Malaysia ( ms, Perdana Menteri Malaysia; ms, ڤردان منتري مليسيا, label= Jawi, script=arab, italic=unset) is the head of government of Malaysia. The prime minister directs the executive branch of the f ...

Than Shwe Than Shwe ( my, သန်းရွှေ, ; born 2 February 1933 or 3 May 1935) is a Burmese strongman politician who was the head of state of Myanmar from 1992 to 2011 as Chairman of the State Peace and Development Council (SPDC). During thi ...

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Prime Minister of Burma The prime minister of Myanmar is the head of government of Myanmar. The post was re-established in 2021 by the State Administration Council, the country's ruling military junta, to lead its nominally-civilian provisional government. The p ...

Gloria Macapagal Arroyo Maria Gloria Macaraeg Macapagal Arroyo (, born April 5, 1947), often referred to by her initials GMA, is a Filipino academic and politician serving as one of the House Deputy Speakers since 2022, and previously from 2016 to 2017. She previously ...

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President of the Philippines The president of the Philippines ( fil, Pangulo ng Pilipinas, sometimes referred to as ''Presidente ng Pilipinas'') is the head of state, head of government and chief executive of the Philippines. The president leads the executive branch of ...

Goh Chok Tong Goh Chok Tong (; born 20 May 1941) is a Singaporean former politician who served as Prime Minister of Singapore between 1990 and 2004, and Secretary-General of the People's Action Party between 1992 and 2004. He was the Member of Parliament (M ...

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Prime Minister of Singapore The prime minister of Singapore is the head of government of the Republic of Singapore. The president appoints the prime minister, a Member of Parliament (MP) who in their opinion, is most likely to command the confidence of the majority o ...

), Thaksin Shinawatra (

Prime Minister of Thailand The prime minister of Thailand ( th, นายกรัฐมนตรี, , ; literally 'chief minister of state') is the head of government of Thailand. The prime minister is also the chair of the Cabinet of Thailand. The post has existed s ...

Phan Văn Khải Phan Văn Khải (; 25 December 1933 – 17 March 2018) was a Vietnamese politician who served as the fifth Prime Minister of Vietnam from 25 September 1997 to 27 June 2006. Life and career Phan Văn Khải was born on 25 December 1933 in Tan ...

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Prime Minister of Vietnam The prime minister of Vietnam ( vi, Thủ tướng Việt Nam), officially styled as the Prime Minister of the Government of the Socialist Republic ( vi, Thủ tướng Chính phủ nước Cộng hòa Xã hội chủ nghĩa), is the head of g ...

), Zhu Rongji (

Premier of the State Council of the People's Republic of China The premier of the State Council of the People's Republic of China, commonly called the premier of China and sometimes also referred to as the prime minister, is the head of government of China and leader of the State Council. The premier i ...

). The first stage implied the 6 first signatories who engaged in the elimination of their tariffs on 90% of their products by 2010. Between 2003 and 2008, trade with ASEAN grew from US$59.6 billion to US$192.5 billion. China's transformation into a major economic power in the 21st century has led to an increase of foreign investments in the

bamboo network The Bamboo network () or the Chinese Commonwealth () is a term used to conceptualize connections between businesses operated by the Overseas Chinese community in Southeast Asia. The Overseas Chinese business networks constitute the single most ...

, a network of

overseas Chinese Overseas Chinese () refers to people of Chinese birth or ethnicity who reside outside Mainland China, Hong Kong, Macau, and Taiwan. As of 2011, there were over 40.3 million overseas Chinese. Terminology () or ''Hoan-kheh'' () in Hokkien, ref ...

businesses operating in the markets of Southeast Asia that share common family and cultural ties. ASEAN members and the People's Republic of China had a combined nominal

gross domestic product Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjective nature this measure is of ...

of approximately US$6 trillion in 2008. Once the 6 first signatories accomplished their goal by 2010, the CLMV countries (Cambodia, Lao PDR, Myanmar, Vietnam) engaged in the same policy on tariffs, with the same goal to achieve by 2015. In 2010, the ASEAN–China Free Trade Area became the largest free trade area in terms of population and third largest in terms of nominal

GDP Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjective nature this measure is ofte ...

. It was also the third largest trade volume after the

European Economic Area The European Economic Area (EEA) was established via the ''Agreement on the European Economic Area'', an international agreement which enables the extension of the European Union's single market to member states of the European Free Trade As ...

and the

North American Free Trade Area The North American Free Trade Agreement (NAFTA ; es, Tratado de Libre Comercio de América del Norte, TLCAN; french: Accord de libre-échange nord-américain, ALÉNA) was an agreement signed by Canada, Mexico, and the United States that cre ...

. On 1 January 2010, the average tariff rate on Chinese goods sold in ASEAN countries decreased from 12.8 to 0.6 percent pending implementation of the free trade area by the remaining ASEAN members. Meanwhile, the average tariff rate on ASEAN goods sold in China decreased from 9.8 to 0.1 percent. By 2015, ASEAN's total merchandise trade with China reached $346.5 billion (15.2% of ASEAN's trade), and the ACFTA accelerated the growth of direct investments from China and commercial cooperation.

Description

Amendments for the framework of the free trade area mostly concerned Vietnam. These amendments were designed to assist Vietnam lower tariffs and put forth dates as guidelines. The free trade agreement reduced

tariff A tariff is a tax imposed by the government of a country or by a supranational union on imports or exports of goods. Besides being a source of revenue for the government, import duties can also be a form of regulation of foreign trade and p ...

s on 7,881 product categories, or 90 percent of imported goods, to zero. This reduction took effect in China and the six original members of ASEAN: Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand. The remaining four countries were supposed to follow suit in 2015.

Signatories

Members of the

ASEAN ASEAN ( , ), officially the Association of Southeast Asian Nations, is a political and economic union of 10 member states in Southeast Asia, which promotes intergovernmental cooperation and facilitates economic, political, security, milita ...

have a combined population of more than 650 million. Indonesia accounts for more than 40 percent of the region's population, and its people have voiced the greatest amount of opposition to the agreement.

References

External links

Documents on the ASEAN–China Free Trade Area

ASEAN-China Free Trade Area Business Portal

China's official CAFTA website

China Asean Free Trade website
{{DEFAULTSORT:Asean-China Free Trade Area Trade blocs Economy of Brunei Economy of Myanmar Economy of Cambodia Economy of Indonesia Economy of Laos Economy of Malaysia Economy of the Philippines Economy of Singapore Economy of Thailand Economy of Vietnam ASEAN 2010 introductions Free trade agreements of China 2010 in economics Free-trade areas Foreign trade of Singapore

History

Description

Signatories

See also

References

External links