TEMPO.CO, Jakarta - The Association of South East Asian Nations (ASEAN) and China have renewed a free trade deal under the ASEAN-China Free Trade Area (ACFTA) scheme. The deal was reached at the 13th Consultation between ASEAN Trade Ministers and their Chinese counterpart in Myanmar on Tuesday, August 26, 2014.
The renegotiation of the free trade agreement is needed to ensure the ACFTA retains its dynamism and economic relevance, according to the joint statement released yesterday.
The renewal is aimed at deepening the existing economic ties between ASEAN and China. During the consultations, trade ministers from ASEAN and China created a workable framework in an elements paper that outlined the focus areas that would be worked on, and appointed senior economic officials to lead the negotiations.
"The ministers have promised to expedite the finalization of Customs Procedures and Trade Facilitation agreement, and evaluate the current Rules of Origin [which apply to certain goods and products traded within the Free Trade Area]", said Myanmar's Minister for National Planning and Economic Development, Kan Zaw.
Ministers from both trading blocs also welcomed the establishment of the sub-committee for Standards, Technical Regulations and Conformity Assessment Procedures (STRACAP), and Sanitary and Phytosanitary (SPS) Measures, which had first convened in March 2014.
The main task of the sub-committee is to develop a framework for the implementation of the Protocol on Technical Barriers to Trade, which was signed in November 2012.
According to recent trade data, the economic cooperation between ASEAN and China is increasing as China retains its position as ASEAN's main trading partner—making up 14 percent of all ASEAN trades. At the end of 2013, trade between the two blocs is valued at US$ 350,5 billion—up by 9,7 percent from the previous year.
In 2013, ASEAN received US$ 8,6 billion worth of foreign direct investment (FDI) from China, up 60,8 percent from the previous year or equivalent to 7,1 percent of all FDI inflow into the region. Officials are seeking to increase the value of trade between the two blocs to US$ 500 billion by the end of 2015.
The director for ASEAN cooperation at Indonesia's Trade Ministry, Donna Gultom, said the negotiations covered a number of aspects that could help increase economic and trade cooperation, which will benefit both blocs. "ASEAN and China are rejuvenating a number of key aspects of the agreement, which will benefit everyone involved," said Gultom.