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ASEAN pushes ahead FTA talks with China

(Agencies/China Daily)
Updated: 2007-11-21 08:58

ASEAN is stepping up talks on free trade agreements (FTAs) with China after a similar accord with India was put on hold because of disagreements on tariff cuts.

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The 10-nation bloc, which is forging an economic community modeled on the European Union, is expected to move closer to an agreement with Asia's second-largest economy as Premier Wen Jiabao meets ASEAN leaders this week in Singapore.

China signed a commodity trade agreement with ASEAN in July 2005. It will gradually eliminate levies on about 7,000 commodities from ASEAN by 2010, covering 93 percent of China's imports from the region.

Further discussions on investment and two more rounds of service trade agreements are expected to be wrapped up by 2010.

China's trade with ASEAN is about seven times that of India, underscoring its importance to the export-dependent grouping. Southeast Asia's developing economies are almost twice as reliant on exports as the rest of the world, with more than 60 percent of overseas sales ultimately destined for the US, Europe and Japan.

"ASEAN's trade with China is growing much faster than with India, and there is a sense of urgency for them to move it along quickly or risk being left behind," said Song Seng Wun, an economist at CIMB-GK Research in Singapore.

"Both China and India are important markets and we're equally keen on free trade agreements with the two countries," said Sunny Verghese, chief executive officer of Singapore-based Olam International Ltd, a supplier of ingredients to companies including Nestle SA.

"Any liberalization and deregulation in these markets will give a tailwind" to ASEAN businesses, he added.

The group is also pursuing agreements with Japan, Australia and New Zealand to bring down barriers to trade as it moves to develop what it calls an ASEAN Economic Community.

ASEAN members are Indonesia, Thailand, Malaysia, Singapore, Brunei, the Philippines, Cambodia, Laos, Myanmar and Vietnam. Formed in 1967, it has a combined gross domestic product of more than $1.03 trillion and a population of about 570 million.

ASEAN leaders signed an agreement on Monday mapping out plans to create a free trade area by 2010. The agreement will call for an European Union-style economic integration, without a common currency, by 2015.

The "ASEAN Economic Community Blueprint" sets out commitments, targets and timelines for a single market and production base with an unrestricted flow of goods, services, investments and skilled jobs.


(For more biz stories, please visit Industry Updates)



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