ASEAN countries brace for Chinese assault post FTA
04 Jan '10
2 min read
The comprehensive China - ASEAN Free Trade Agreement, which came into effect from January 1 2010, will attract zero-duty tariffs on about 90 percent of products traded between only six countries of ASEAN and China.
These six countries which include Brunei, Philippines, Indonesia, Malaysia, Thailand and Singapore) will implement just 0.6 percent tariff on the rest of the other 10 percent Chinese products, while China will reciprocate with just 0.1 percent duty.
Four other new members of ASEAN; Vietnam, Laos, Cambodia and Myanmar, will postpone tariff reduction to 2015, by which time, 90 percent of the products will attract zero tariffs.
As a precursor to the FTA implemented from January 1, 88.48 percent of goods from ASEAN countries attracted under less than 5 percent tariff and average tariff rates reduced from 2.58 percent in 2007 to 1.95 percent in 2008.
Currently China's trade deficit with the ASEAN has narrowed. In the first half of 2009 China - ASEAN trade volume fell 23.8 percent over the same period of the previous year, displaying subtle signs.
There is a fear and worry among ASEAN countries this FTA will only further the interests of China and help it in increasing its trade surplus to an even greater extent, which has led to defensive moves from Indonesia and Vietnam.