China Pushes Its Pan-Asian Trade Deals With TPP In Doubt

China Pushes Its Pan-Asian Trade Deals With TPP In Doubt

Given the increased probability that the Trans-Pacific Partnership (TPP) will not be ratified by the United States, China is pushing its own longer term objective of a Free Trade Area of the Asia Pacific (FTAAP) and the more-immediate Regional Comprehensive Economic Partnership (RCEP).

Chinese President Xi Jinping is to attend the Asia-Pacific Economic Cooperation economic leaders’ meeting in Lima on November 19-20. Deputy Foreign Minister Li Baodong said that Xi’s presence is intended to signify China’s priority of boosting regional economic cooperation.

China is particularly interested in the completion on schedule of the study on the feasibility and potential benefits of FTAAP, which it has proposed to be a comprehensive, high-quality agreement that would encompass all of the current free trade agreements (FTAs) in the Asia-Pacific.

Xi has previously said that “there are worries about the potential for fragmentation. We therefore need to speed up the construction of the FTAAP and promote regional economic integration going forward.”

As what China sees as a first step towards FTAAP, RCEP aims to bring together the existing FTAs of China, Japan, South Korea, India, Australia, and New Zealand with the Association of Southeast Asian Nations (ASEAN) into a single enhanced comprehensive agreement. ASEAN comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.

It has been pointed out that a China-led RCEP has the potential to fill the gap left by TPP, if the latter is not passed by the US Congress. While it is unlikely that RCEP will have the same level of market access benefits as TPP, seven TPP countries (Australia, Brunei, Japan, Malaysia, New Zealand, Singapore, and Vietnam) are already involved in the ongoing RCEP talks, which China is looking to conclude as soon as possible.

In that regard, during an interview on November 9 after the US presidential election result, Australian Minister for Foreign Affairs Julie Bishop confirmed that, while “we see TPP as an important economic manifestation of the United States’ presence in our region, should [it] not go ahead, then the vacuum that would be created is most likely to be filled by RCEP.”

December 31, 2019 / No Comments /  
EU, ASEAN Decide To Resume FTA Talks

EU, ASEAN Decide To Resume FTA Talks

Representatives from the Association of South East Asian Nations and the European Union have confirmed their “commitment to intensify work towards the timely resumption of region-to-region free trade agreement negotiations.”

They met in Bangkok on October 13-14. The EU and ASEAN (comprising Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam) started talks on an FTA in 2007, but when those negotiations were suspended in 2009, the EU decided to instead pursue negotiations towards FTAs with the individual countries within ASEAN.

The EU initialed an FTA with Singapore in October 2014, launched FTA talks with the Philippines at the end of last year, and concluded negotiations with Vietnam in February this year. However, the EU’s goal has always been said to be to use such agreements as strategic “building blocks” for an eventual broader region-to-region deal with ASEAN as a whole.

December 31, 2019 / No Comments /  
ASEAN_20171107131235_asean

Ministers Discuss Taking Forward Hong Kong-ASEAN FTA

Hong Kong’s Secretary for Commerce and Economic Development, Gregory So, met with the Singaporean and Philippine trade ministers on October 4 and 5, respectively, to discuss the progress of the Hong Kong-Association of Southeast Asian Nations (ASEAN) free trade agreement (FTA) negotiations.

At the meetings, So exchanged views with his counterparts on the negotiations and emphasized the importance of the FTA in strengthening economic ties between Hong Kong and ASEAN by facilitating the flow of goods, services, and investments.

In August this year, the economic ministers from the ten ASEAN member countries (Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam) said that the FTA is on track to be concluded in 2016.

It has been noted previously by So that, when completed, the FTA will, together with the Mainland China-ASEAN FTA and the Mainland-Hong Kong Closer Economic Partnership Arrangement (CEPA), “provide a solid platform to facilitate trade and investment among Hong Kong and ASEAN countries.” It will eliminate or reduce tariffs and non-tariff barriers, and will also include preferential rules of origin; liberalized rules for trade in services; and the liberalization, promotion, and protection of investment.

After the conclusion of the FTA negotiations with ASEAN, Hong Kong is expected to seek to join the Regional Comprehensive Economic Partnership, currently being negotiated between ASEAN and its six FTA partners – Mainland China, Japan, South Korea, Australia, New Zealand, and India.

December 30, 2019 / No Comments /  
RCEP

ASEAN Reinforces Commitment To RCEP

The leaders of the 10-member Association of Southeast Asian Nations (ASEAN) looked forward to the early conclusion of negotiations on the Regional Comprehensive Economic Partnership (RCEP) trade treaty in a statement following their meeting in Kuala Lumpur, Malaysia, on November 21.

It was originally intended that negotiations on the proposed RCEP would be concluded by the end of this year. The RCEP aims to bring together ASEAN’s existing free trade agreements with China, Japan, South Korea, India, Australia, and New Zealand into a single comprehensive agreement. It would link a third of the world’s gross domestic product and a market of 45 percent of its population.

However, until August this year, it had been difficult for the countries to reach a consensus over further cuts to import tariffs, particularly in relation to sensitive products. It is believed that this issue has now been largely overcome, with duties set to be eliminated on 65 percent of tariff lines immediately, rising to 80 percent of tariff lines in 10 years.

The leaders’ statement confirmed that, “following this breakthrough, substantive negotiations in the core areas have intensified.” They have asked negotiators to further reinforce their efforts to reach an agreement.

In addition, they welcomed the confirmation that the ASEAN Economic Community (AEC) will be established on December 31, 2015. With a market of 600 million people, the AEC will be the seventh-largest economy in the world.

Within the AEC project, ASEAN-6 countries – comprising Brunei, Indonesia, Malaysia, the Philippines, Singapore, and Thailand – eliminated tariffs on 99.65 percent of tariff lines in 2010. ASEAN’s newer members – Cambodia, Laos, Myanmar (Burma), and Vietnam – reduced tariffs on 98.86 percent of their tariff lines within a zero-to-five percent tariff range by the same year. The latter will eliminate tariffs on these goods by end-2015, with flexibility for a few import duty lines until 2018.

December 27, 2019 / No Comments /  
ASEAN Nations Sign Free Trade Deal

Hong Kong, ASEAN Nations Sign Free Trade Deal

Hong Kong has signed a new free trade agreement (FTA) with the Association of Southeast Asian Nations (ASEAN), which is expected to become effective from January 2019.

Following 10 rounds of talks over three years starting in July 2014, negotiations were concluded in September 2017 and the final agreements were signed in Manila on November 12 during the 31st annual ASEAN Summit.

The FTA consists of 14 chapters. It includes provisions to eliminate or reduce tariffs (tax barriers to trade), liberalize market access, and promote confidence in trade.

Provisions include:

  • A commitment from Singapore to bind all its customs duties on goods imported from Hong Kong at zero percent;
  • A commitment from Brunei, Malaysia, the Philippines, and Thailand to eliminate customs duties of around 85 percent of their tariff lines within 10 years and reduce customs duties of about another 10 percent of their tariff lines within 14 years;
  • A commitment from Indonesia and Vietnam to eliminate customs duties of about 75 percent of their tariff lines within 10 years and reduce customs duties of about another 10 percent of their tariff lines within 14 years; and
  • A commitment from Cambodia, Laos and Myanmar will eliminate customs duties of about 65 percent of their tariff lines within 15 years and reduce customs duties of about another 20 percent of their tariff lines within 20 years.

Trade between Hong Kong and ASEAN was valued at USD93.3bn in 2016, according to ASEAN data, a 1.3 percent increase from USD92.1bn in 2015. Total foreign direct investment flows from Hong Kong to ASEAN amounted to USD9.9bn in 2016, a 141 percent increase from the previous year. As of 2016, ASEAN was Hong Kong’s second-largest partner in merchandise trade.

The FTA is the sixth agreement between ASEAN and external partners, after deals with China, Korea, Japan, India, and Australia-New Zealand.

December 26, 2019 / No Comments /