China and ASEAN Agreed on Framework for FTA

ASEAN and China agreed on main points regarding the establishment of a Free Trade Area (FTA), Japan’s Kyodo news agency reported on Sept. 9.

According to the news agency, in meetings held in Bandar Seri Begawan, capital of Brunei, Sept. 7-8, ASEASN 10 members accepted China’s demands that ahead of the establishment of the FTA, they accelerate the process of reducing tariffs.

The meetings this time are the fifth working-level talks since ASEAN and China agreed to form the FTA last November.

The Kyodo reported that under the framework for economic cooperation the two sides agreed on, they would speed up the process of reducing tariffs in sectors such as animals, meat, fish, dairy products, trees, vegetables, fruits and nuts.

ASEAN is reported to have insisted on lowering tariffs on manufactured good at the initial stage. However, China is said to have opposed it, making a point that rules for country of origin should be drawn up first. The two sides failed to narrow their differences over the time of initial tariff reductions. ASEAN wants to implement tariff reduction July of 2003, while China insisted on January of 2004.

However, ASEAN and China came to an agreement that all the consultations for the FTA should start early 2003 and be completed by Jun 2004. They saw eye to eye over that if the FTA is created around 2010, it had better be applied to rich nations and poor nations with the interval of three years.

The two sides are reported to plan to have the 6th round of working-level talks next month in Singapore, in which they will set the framework, which they will present to the annual ASEAN summit scheduled for November in Cambodia.

yshwang@donga.com