ASEAN-China Free Trade Area’s 3.0 version echoes the development needs of both sides: envoy

Source:Global Times

ASEAN-China Free Trade Area (ACFTA) is one of the largest FTAs in the world, covering one-fourth of the world population, and the building of the 3.0 version of ACFTA actively echoes the development needs of both sides and is line with the trend of global economic development, Shi Zhongjun, secretary-general of the ASEAN-China Centre (ACC), told the Global Times in an exclusive written interview.

The launch of negotiations on the 3.0 version of ACFTA was announced during the recent East Asia Cooperation Leaders' Meetings held in Cambodiasetting a new tone for the future focus of regional development.

In speaking about what the 3.0 version of ACFTA will bring to the development of regional cooperation and the joint response to the current international situation, experts said that the proposal of version 3.0 of the Free Trade Zone was mainly based on the current needs and development direction of China-ASEAN cooperation, highlighting the digital economy led by innovation and the green economy led by sustainable development.

"The 3.0 version of ACFTA will focus on trade and investment liberalization and facilitation, digital economy, green economy and industrial cooperation, where digital economy and green economy represent new areas of cooperation that deserve special attention," Shi said.

"The building of the 3.0 version of ACFTA actively echoes the development needs of both sides and the trend of global economic development," the secretary-general said.

Version 1.0 of the China-ASEAN Free Trade Area was established in 2010, and zero-tariffs covers more than 90 percent of the tax items of both parties. In 2019, the upgraded version 2.0 was launched, and the two sides further opened up market access. 

At the ASEAN-China Special Summit to Commemorate the 30th Anniversary of ASEAN-China Dialogue Relations in November 2021, Chinese leaders proposed the construction of version 3.0 of  the China-ASEAN Free Trade Area.

ACFTA contributes to the achievements of trade and economic development between ASEAN Member States (AMS) and China. In the 1.0 and 2.0 versions of ACFTA, AMS and China opened up trade in goods, services and investment, and the economic and trade cooperation has become closer, Shi said.

"In the process of implementation, the two sides also look forward to institutional arrangements such as a more open market, a shorter negative list and freer and easier market access," Shi said.

"I believe the initiation of the negotiation is an inevitable result of the close economic and trade cooperation in the region and the detailed division of labor...the 3.0 version of the ACFTA is the common aspiration of AMS and China for future development, and it will make the economic and trade ties between the two sides closer than ever," Shi said.

ACFTA is one of the largest FTAs in the world. Ever since 2010, steady progress has been made in the building of ACFTA, and at the same time, the cooperation between ASEAN and China has been further deepened.

China has been ASEAN's largest trading partner for 13 years in a row, and ASEAN has become China's largest trading partner since 2020. 

Currently, more than 7,000 kinds of goods enjoy zero tariff treatment while the establishment and development of the ACFTA has provided an effective boost to trade and investment liberalization and facilitation between ASEAN and China, and a strong impetus to integrated regional economic development, according to the ACC.

"ASEAN and China have entered the era of comprehensive strategic partnership. Standing at a new historical starting point, conditions are mature and the foundation is solid for the FTA to be upgraded again," Shi said.

"It is believed that after the completion of the upgrade to 3.0 version, international cooperation in the free trade area will be more pragmatic and efficient, international factors of production will flow more frequently across borders, and the dividends of the free trade area will further increase," Shi said.