Association of Southeast Asian Nations Signs Free Trade Agreement Upgrade with China
The Association of Southeast Asian Nations (ASEAN) signed an “enhanced” free trade agreement with China on Tuesday.
The move was presented by Beijing as recognition of China’s growing power and influence in Southeast Asia.
Chinese Premier Li Qiang, who was present at the summit in Kuala Lumpur, the Malaysian capital, where the agreement was signed, said the 11 ASEAN countries would benefit from “enhanced bilateral economic and trade cooperation” with China at a time when “many countries face greater development challenges after being unfairly subjected to high tariffs” – an unsubtle criticism of President Donald Trump’s trade policies.
“The interference of external forces in our region is increasing, and many countries are subject to unreasonably high tariffs. In the face of strong political and economic pressure, disunity and confrontation will not only bring no benefit, but will lead to division and domination by external forces.” said Li.
“As the rules-based international trading system faces serious challenges, the signing of the protocol to upgrade the China-Asia Free Trade Area to version 3.0 is of great significance,” China’s Ministry of Commerce said on Tuesday.
The ministry predicted that the upgraded agreement would “inject more confidence and momentum into regional and global economic growth, serving as an important example for countries to jointly resist protectionism and unilateralism and jointly address global trade challenges.”
The original ASEAN-China Free Trade Agreement (ACFTA) was sign in 2002 and fully implemented in 2010. China and ASEAN countries together have a population of more than two billion. The volume of trade between China and ASEAN countries grew up from $235.5 billion to more than $1 trillion in the 15 years since the agreement came into force.
Since then, the agreement has been “improved” three times. Version 3.0 includes more provisions for green energy, which was seen as a big win for China as it manufactures solar panels, electric vehicles (EVs) and batteries on a large scale.
A provision of the upgraded deal calls for China and ASEAN countries to collaborate on designing regulatory standards for electric vehicles, which would surely be drafted to favor China’s electric vehicle industry.
President Donald Trump was in Kuala Lumpur for the ASEAN Summit Monday. He has signed several agreements with ASEAN countries and expressed confidence that he would be able to reach a trade deal with China when he met Chinese dictator Xi Jinping in South Korea on Thursday.
The ACFTA 3.0 deal was obviously an effort by China to fend off Trump’s visit and regain its influence with ASEAN countries, most of which would prefer to maintain good economic and diplomatic relations with Beijing and Washington.
Malaysian Prime Minister Anwar Ibrahim was delighted to see the United States and China reach agreements in Kuala Lumpur.
“The day before we were with US President Donald Trump, and today we are back with China. And this reflects the centrality of ASEAN,” Ibrahim said. said after the meeting with China on Tuesday.
“This is what we see as a constant commitment that fosters trust and allows us to tackle challenges together,” he said.
A less cheerful note was sounded by ASEAN member Ferdinand Marcos, Jr., President of the Philippines. Marcos welcomed the improved free trade agreement, but said China must also “commit to meaningful cooperation and engagement, particularly in the South China Sea.”
Marcos said it was “regrettable” that China continued to forcibly seize territory in the South China Sea, using “dangerous actions and harassment.”
China attack a Philippine fishing vessel equipped with a water cannon in the Spratly Islands two weeks ago, and both sides blamed each other for the subsequent collision between their vessels. Marcos also denounced China for saying it would build a “nature reserve” on land claimed by the Philippines in the Scarborough Reef, in defiance of international arbitration rulings.
“Actions like these cannot hide under the guise of protecting the marine environment because they have no legal basis or effect, openly disregard international law and undermine the sovereignty of the Philippines,” Marcos said.
