And ASEAN, hit by U.S. tariffs, sign upgraded free trade pact
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China-ASEAN Free Trade Agreement Upgrades Take Effect Amidst Trade Tensions
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Upgrades to the China-ASEAN Free Trade Agreement (FTA) came into force in May 2024, shortly after the implementation of new tariffs by the United States. Negotiations for these upgrades began in November 2022. The initial FTA between China and the Association of Southeast Asian Nations (ASEAN) was established in 2010.
Expanding Trade Ties
China has stated that the upgraded agreement aims to improve market access for both sides in key sectors, including agriculture, the digital economy, and pharmaceuticals. These upgrades are expected to streamline customs procedures and reduce trade barriers,fostering deeper economic integration between China and ASEAN member states.
Regional Economic Partnership
Both China and ASEAN are founding members of the Regional Thorough Economic Partnership (RCEP), the world’s largest trading bloc. RCEP encompasses nearly a third of the global population and approximately 30% of global gross domestic product. A RCEP summit was hosted by Malaysia in Kuala Lumpur on Monday, marking the first such summit in five years. Reuters reported on the summit’s focus on navigating global trade uncertainties.
| RCEP Key Statistics (2023) | Data |
|---|---|
| Population Covered | Approximately 2.28 billion |
| GDP Share of world | Around 30% |
| Member Countries | 15 (including china and all ASEAN members) |
A Buffer Against Tariffs?
Some analysts view RCEP, and by extension the upgraded China-ASEAN FTA, as a potential shield against tariffs imposed by the united States. Though, the provisions within RCEP are generally considered less comprehensive than those found in other regional trade agreements, largely due to the diverse economic interests of its member nations. the council on Foreign Relations provides ongoing tracking of U.S.-China trade disputes.