Business / Economy

Upgrade of ASEAN-China FTA will provide greater trade, investment liberalization: Cambodian minister

(Xinhua) Updated: 2016-09-03 14:57

PHNOM PENH - As Association of Southeast Asian Nations (ASEAN)-China leaders are scheduled to meet next week in Laos, Cambodia's Commerce Minister Pan Sorasak said Friday that the upgrade of the ASEAN-China Free Trade Area (ACFTA) will provide greater trade and investment liberalization between the two sides.

ASEAN and China signed a framework agreement to establish the mega-free trade area during a summit in Phnom Penh, the capital of Cambodia, in 2002, and the pact came into effect in 2010.

China in 2013 called for an "upgraded version" of the ACFTA, pledging economic and trade cooperation of "a greater scope and higher quality."

In August 2014, ASEAN and China decided to upgrade the ACFTA.

"The upgrade of the ACFTA will further liberalize their trade in goods and services and investment, and strengthen economic cooperation between ASEAN and China," Sorasak said in a written interview with Xinhua.

He said the key motivations of ASEAN in the ACFTA are to access the growing Chinese market on trade in goods and services as well as better investment conditions and to create one of the world's largest trading areas.

"The Chinese market, the fastest growing domestic market in the world, is expected to provide significant export potential for the ASEAN countries," he said.

He said it is undoubtedly a win-win situation, which benefits all kinds of businesses, from manufacturing to the service sector.

China is still the largest trade partner of ASEAN, he said, adding that Chinese statistics showed that trade between China and ASEAN increased 18.5 percent on average in the past 25 years. Trade volume between China and ASEAN amounted to $472.16 billion in 2015.

Sorasak added that ACFTA provides a lot of advantages to Cambodia. However, Cambodia needs to work harder to improve its competitiveness, quality of products, logistics infrastructure, and upgrade its trade system and institutions.

He said over these years, Cambodia has imported a lot of raw materials for its garment manufacturing industry.

"With the upgrade of ACFTA, Cambodia's export market and capacity will be strengthened, as there will be more opportunities for small and medium enterprises in Cambodia to join regional supply chains, particularly in the fields of agriculture and the agro-industry," he said.

Asked about the progress of negotiations towards the upgrade of the ACFTA, he said that during their meeting in Laos in August, ASEAN economic ministers looked forward to all parties to implement the ACFTA upgrading protocol, which aims to enhance trade and economic relations between ASEAN and China.

He said the ministers also tasked the officials with continuing deliberations on mapping out the detailed work plan for the further liberalization of trade in goods, improvement of product specific rules, and approaches to investment liberalization and protection.

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