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ASEAN Developing Its FTAs With China, S Korea, Japan

by Mary Swire, Tax-News.com, Hong Kong

28 August 2014


On August 26, the Economic Ministers from the ten Association of Southeast Asian Nations (ASEAN) Member States met with their counterparts from China, South Korea and Japan to discuss and review the ongoing negotiations to upgrade their respective ASEAN+1 trade treaties.

With all of the discussions being held in Myanmar during the 46th ASEAN Economic Ministers Meeting(AEM), the meeting with Gao Hucheng, China's Minister of Commerce, confirmed that China had maintained its position as ASEAN's largest trading partner. According to the joint statement, ASEAN's overall trade with China reached USD350.5bn in 2013, accounting for 14 percent of ASEAN's total trade and representing an annual increase of 9.7 percent.

The Ministers reaffirmed ASEAN's and China's commitment to reaching a trade target of USD500bn by the end of 2015, and, to that end, they noted the progress made in implementing the ASEAN-China free trade agreement (FTA), which went into effect in 2010, and were pleased to note that both sides had agreed to its updating, "to ensure that the FTA remained dynamic and commercially relevant."

The Ministers endorsed the various key areas on which the FTA upgrade would be focused, and tasked senior officials to commence the upgrade negotiations. They also urged the officials to expedite the conclusion of their talks on customs procedures and trade facilitation, as well as the rules of origin review, and to report their progress to the next AEM-China consultations.

During a similar meeting with Yoon Sang-jick, the South Korean Minister of Trade, Industry and Energy, the Ministers reported that total trade between ASEAN and South Korea grew to USD135bn in 2013, and welcomed the progress currently being made in further liberalizing the ASEAN-South Korea Trade in Goods FTA, which originally went into force in 2007.

The additional liberalization will include incorporation of line-by-line tariff reduction schedules into the agreement, and improvements to customs procedures and trade facilitation. The Ministers also noted the progress made on further liberalizing sensitive goods under the FTA.

Finally, in a meeting with Toshimitsu Motegi, the Japanese Minister for Economy, Trade and Industry, it was disclosed that two-way trade between ASEAN and Japan reached USD240.9bn in 2013, accounting for 9.6 percent of total ASEAN trade. Japan was ASEAN's third largest trading partner after China and the European Union.

The Ministers reaffirmed the commitment to enhance the ASEAN-Japan Comprehensive Partnership Agreement, which was first completed in 2008, "through broadening and deepening areas of mutual interest," including trade in goods, trade in services and investment. The Ministers also tasked officials with expediting the finalization of the mechanism for monitoring the utilization of tariff preferential rates under the agreement.

In addition, the Ministers noted that significant progress has been made towards concluding the trade in services and investment negotiations, and targeted their inclusion into the trade agreement by the end of this year.

TAGS: tax | investment | free trade agreement (FTA) | Brunei | Burma | foreign direct investment (FDI) | tariffs | trade treaty | China | Laos | Philippines | Singapore | Thailand | agreements | Cambodia | Indonesia | Korea, South | Malaysia | trade | Association of East Asian Nations (ASEAN) | Japan | Vietnam | services

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