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China Pushes For Asia-Pacific FTA

by Mary Swire,, Hong Kong

05 May 2014

During a special press conference in Beijing, Assistant Minister of Commerce Wang Shou Wen confirmed that China would urge Asia-Pacific Economic Cooperation (APEC) trade ministers to begin a study on the feasibility of the proposed Free Trade Area of the Asia Pacific (FTAAP), at their meeting later this month in Qingdao.

China's FTAAP proposal could considered as presenting a rival to the United States-led Trans-Pacific Partnership (TPP) trade treaty, progress on which appears to have stalled and whose completion is delayed. However, Wang emphasized that there was no conflict between the two, as it has been noted previously that there are a number of possible pathways that could eventually lead to the FTAAP, a vision for which had been first set out in 2004.

In 2010 in Japan, and then again in Bali in 2013, APEC Leaders had proposed the FTAAP as a comprehensive, high quality agreement, developed and built on the ongoing talks on regional trade agreements (RTAs) and bilateral free trade agreements (FTAs).

Those suggested pathways to the FTAAP have included current and proposed RTAs, such as the Association of Southeast Asian nations (ASEAN) Economic Community, the Pacific Alliance, the TPP, and the negotiations for a Regional Comprehensive Economic Partnership (RCEP) between ASEAN and its six FTA partners, in which China is particularly involved.

During the press conference, Wang insisted that the discussions in Qingdao would be on whether to establish a working group to study the feasibility of the FTAAP, its potential benefits and how to utilize RTAs to build a broader trade pact, but would not represent the beginning of actual negotiations.

However, he also pointed out that China's proposal is based upon a view that the many RTAs and FTAs in the Asia-Pacific region (over 200 of which, Wang said, have been notified to the WTO) are burdening businesses, for example, with a multitude of differing tariffs and rules of origin. He called it the "noodle bowl" effect, where businesses have to take account of a complex mixture of different trade rules and regulations.

As this year's APEC host, he therefore confirmed that China would make recommendations on how the FTAAP project could be carried forward, and disclosed that there had already been a "lot of positive response" from other APEC members.

TAGS: compliance | Asia Pacific | tax | business | free trade agreement (FTA) | tariffs | trade treaty | China | agreements | United States | regulation | trade | Asia-Pacific

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