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Free trade bears fruit

By Jiang Wei (China Daily)
Updated: 2008-01-07 14:28

The free trade pact is also good news for companies eager to reduce export costs or invest overseas with fewer hurdles.

"Enterprises from both sides have saved expenditures, lowered costs and sharpened their competitive edge because of the agreement," Zhang says.

As of last September, Chinese businesses had applied for some 170,000 certificates of origin for favorable tariffs and had exported goods worth $3.25 billion to ASEAN countries.

Chinese firms in the infrastructure and logistics industries, such as rail, airline and port companies, all see golden opportunities in ASEAN.

Discussion of free trade agreements has been heated worldwide. Many nations have turned to bilateral agreements after discovering that multinational negotiations, such as the Doha Round under the World Trade Organization, are overly time-consuming.

A number of countries are now involved in FTA talks that they believe will boost trade and investment.

So far, China has signed FTAs with 14 countries and regions. It is also engaged in negotiations with 12 other countries and regions, and feasibility studies are being conducted with three more.

The establishment of free trade zones is important to China, which relies heavily on trade, says Zhao Jinping, a researcher with the Development Research Center of the State Council.

"It is an efficient way to promote trade growth, one of the three engines driving China's economy. Free trade zones with participating countries offer open markets and few trade barriers," he says.

China-Pakistan FTA

China and Pakistan are expected to wrap up negotiations on a services FTA in the first quarter of this year, Salman Bashir, Pakistan's ambassador to China, told reporters late last month.

It is the latest move in the two countries' efforts to establish a complete free trade zone since they inked a trade in goods agreement in November 2006.

According to the agreement, tariffs on 90 percent of products from China and Pakistan have been or will be removed. It is expected to boost China's textile, chemical, electronic and machinery exports to Pakistan and the nation's imports of Pakistani minerals, aquatic and agricultural products are also set to rise.

The two countries also mapped out a five-year plan for economic cooperation that set a bilateral trade target of $15 billion by 2011.

Bashir called on businesses to take full advantage of the FTA to facilitate investment flows.

China-New Zealand FTA

China and New Zealand recently finished the 15th round of talks toward an FTA.

Breakthroughs have been made during this round after thorough discussion about trade in goods, trade in services and investment, says the commerce ministry's Zhang.

The FTA is expected to be signed by April.

China-Chile FTA

China and Chile signed an FTA on trade in goods in 2005, and the agreement took effect on October 1, 2006.

Chile, China's first FTA partner in Latin America, has experienced robust growth in trade with China since the agreement began. China has surpassed the United States to become Chile's largest trade partner.

China has wiped out tariffs on more than 4,700 goods exported from Chile and has removed duties from about 6,000 goods exported from China. The goods range from chemical products, textiles and clothing to machinery products and parts, and metal and mineral products.

By 2015, more than 97 percent of the two nations' exports will be tariff-free.

Talks on service trade and investment agreements kicked off in January 2007 and are expected to finish within 2008.


(For more biz stories, please visit Industry Updates)

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