Announcement on ACFTA 3.0 could come at summit in Laos next month, bloc chief says
A “substantial upgrade” of the ASEAN-China Free Trade Area (ACFTA) may be announced during an upcoming summit in Laos, said ASEAN’s secretary-general on Sept 25.
Noting that China and the members of the Association of Southeast Asian Nations have been working actively to accelerate the negotiations for the ACFTA 3.0 — or version 3.0 of the agreement — Kao Kim Hourn said the announcement is likely to be made in October during the ASEAN-China Summit.
“This is going to be a very substantial upgrade of the FTA because we want to see that this FTA will become more relevant for the business,” Kao told a group of reporters on the sidelines of the 21st China-ASEAN Expo (CAEXPO) in Nanning, Southwest China’s Guangxi Zhuang autonomous region.
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The CAEXPO, which is being held in Nanning until Sept 28, has as its theme, Sincerity, Mutual Benefit and Inclusiveness, Creating a Diamond Crown New Future — Promoting the Construction of China-ASEAN Free Trade Area Version 3.0 and Regional High-Quality Growth.
The ACFTA formally came into force in 2010, with zero-tariffs covering more than 90 percent of the tax items of both parties. In 2019, the upgraded version 2.0 was launched to further open up market access for both sides. Negotiations for the ACFTA 3.0 began in November 2022 to promote advancements in various areas, including reducing non-tariff barriers, increasing connectivity, and promoting digital and green economy.
China has been ASEAN's largest trading partner for 15 consecutive years, and ASEAN became China's top trading partner in 2020. In the first seven months of this year, their trade reached $552 billion, up 7.7 percent year-on-year.
Together with the Regional Comprehensive Economic Partnership (RCEP) agreement, Kao said he believes that the two free trade agreements will bring new dynamics into the trade relations between ASEAN and China.
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The RCEP, which entered into force in 2022, is composed of the 10 ASEAN member states and their five major trading partners including China. It is the world’s largest free trade area and accounts for about one-third of the global GDP and population.
Kao said he hopes to see wider and deeper cooperation between China and ASEAN, not only in trade but also in people-to-people exchange.
“In 2024, for the very first time, the number of flights connecting ASEAN and China, on average, was about 2,300 flights per week, and the number is set to increase,” he added.
Kao said the increased two-way travel is not only about tourists because the interactions between businesspeople, students and others are also significant in terms of having a more dynamic people-to-people exchange.
China and ASEAN have designated 2024 as the China-ASEAN Year of People-to-People Exchanges. Kao said he expects it to be extended by another year to further encourage the exchanges and communication between people from both sides.
Noting that this is the second time he has attended the CAEXPO, Kao said he is excited to see that the expo is moving forward by covering more fields and engaging a wider range of stakeholders, expanding from the traditional areas to new areas such as digital trade.
Kao said he also appreciates innovative programs such as the China-ASEAN young leaders' growth program to reach out to the younger generation.
Kao added that he hopes CAEXPO will contribute more to the cooperation between ASEAN and China, since the sides have the shared interest in bringing greater prosperity for their people.
