Trade and security dominated talks between China and the 10-Asean member nations and sideline talks with China, Japan and South Korea on the first day of the 8th Asean Summit on Monday.
China and Asean signed a framework agreement on the establishment of a China-Asean Free Trade Area which envisions an open market between the grouping of divergent nations by 2015.
A joint declaration on Asean-China cooperation on “Non-Traditional Security Issues” and a declaration to refrain from conflict over territorial claims in the South China Sea was also agreed upon at the high-level talks.
According to a copy of the agreement on the establishment of a China-Asean Free Trade Area, all parties aim to minimize trade barriers in goods, services and investment and work toward building a transparent and liberal investment regime.
“Under the agreement, Asean and China will progressively eliminate tariffs and non-tariff barriers on “substantially all” trade in goods while taking similar steps to free trade in services,” according to the agreement’s wording.
China and Asean also agreed to establish an “open and competitive” investment regime and to simplify customs and procedures.
Asean exports to China totaled $8.8 billion in 1999, an increase of more than 100 percent since 1993. During the same period, Chinese exports to Asean increased 180 percent from $4.3 billion to $12 billion. The agreement will open a market of some 1.7 billion consumers.
Negotiations to eliminate tariffs will start early next year and conclude by 2004, a time frame for liberalization in services and investment will conclude as quickly as negotiations allow, according to the agreement.
The free trade area will be in place by 2010, but will not extend to newer members of Asean—Cambodia, Burma, Vietnam and Laos—until 2015.
China also agreed to grant a Most Favored Nation status to Cambodia, Laos and Vietnam, the three Asean members which have not yet joined the World Trade Organization.
“It is necessary for all of us to adapt to the trend of globalization,” said Chinese Deputy Foreign Minister Wang Yi, adding that East Asia had lagged behind Europe and the US in the establishment trading blocs.
In their meeting with Chinese leader Zhu Rongji, Asean leaders lauded the potential benefits of the free trade agreement, while the Chinese leader congratulated them on adherence to the One China Policy.
“The establishment of the Asean Free Trade Area will strengthen both Asean and China and will demonstrate to the rest of the world that our partnership can draw on its own strengths,” Thai Prime Minister Thaksin Shinawatra said in the meeting, which was broadcast at the Asean media center.
“At the same time, Asean and China must remain open to the global community and [play] an active role in shaping the global economic system,” Thaksin said.
Stamping its own regional mark on the so-called “war on terrorism,” China and Asean also agreed a joint declaration on “non-traditional” security measures to tackle terrorism, drugs, arms and human smuggling and regional money laundering and cyber crime.
China and Asean said in the declaration that they recognize: “the complexity and deep-rooted background of non-traditional security issues and the need to address them with an integrated approach that combines political, economic, diplomatic, legal, scientific, technological and other means.”
The agreement signaled “a clean break from Cold War models” of security in the region, Wang Yi said.
The security declaration was accompanied by the signing of a China-Asean non-conflict policy in the South China Sea.
The Declaration on the Conduct of Parties in the South China Sea binds parties to resolve territorial and jurisdictional disputes by peaceful means.
However, the declaration does not broach the contentious issue of solving conflicting territorial claims to the Spratly Islands which are claimed by China, Taiwan and four Asean countries—Malaysia, Brunei, Vietnam and the Philippines.
Wang Yi defended the declaration’s shortcoming in not solving the Spratly sovereignty issue, stating such issues would be gradually resolved on a bilateral basis.
Malaysian Prime Minister Mahathir Mohamad said during the meeting with Zhu Rongji that the South China Sea declaration was a political, not a legal document. He said Asean countries would be “much more comfortable with this declaration rather than a binding legal document.”
Earlier on Monday China held trilateral talks with Japan and South Korea during which tension on the Korean peninsula and a future Free Trade Area were discussed.
The three parties agreed to undertake further joint research on the economic impact of a Free Trade Area, a Japanese government officials said at a press briefing after the talks.
China also told Japan and South Korea that it supported a nuclear free Korean peninsula and was surprised by North Korea’s recent revelations that it’s nuclear weapons program was still operational.
“China was not aware that nuclear programs were progressing in North Korea,” the diplomat said.
