China, Asean on crucial stage in FTA talks

By Ding Qingfen (China Daily)
Updated: 2007-11-01 09:22

China and ASEAN have entered a stage when they have to consider how to fully implement the free trade agreement (FTA) and tackle the sensitive issues, said ASEAN Secretary-General Ong Keng Yong in Nanning.

His views echo those of Chinese Vice-Premier Zeng Peiyan, who emphasized that China and ASEAN should take a "more pragmatic approach" in developing the FTA, while delivering the keynote speech at the China-ASEAN Business and Investment Summit on Sunday.

"Easy things have been done, now is the time to look at specific rules and regulations and convince both sides to adjust them," said Ong.

The "easy things" refer to the commodity trade agreements and the first round of service trade deals China and ASEAN have signed in the last five years.

There will be discussions on investment and two more rounds of service trade agreements that will be wrapped up by 2010.

Although the commodity trade agreement came into effect in July 2005 and the one on service trade this July, many serious issues still need to be worked out. For example, Chinese auto parts can't enter Thailand because of the restrictions by the Auto Association of Thailand. Neither can readymade Chinese garments enter Indonesia as its Clothes Chamber won't allow it.

"They are afraid Chinese manufacturers will hurt local players," said Xu Ningning, deputy secretary-general of the China-ASEAN Business Council.

Companies from ASEAN nations have their own pet peeves as well. "Preparations for the Beijing 2008 Olympic Games are in full swing, opening up business opportunities in design, products and IT solutions, but they can't easily join in because that would require detailed FTA rules and regulations that have not been touched yet," said Ong.

"We have to sit down and take a look at the small but sensitive issues, finding out pragmatic solutions."

China and ASEAN have been working on investment agreements but they have not been able to reach consensus on several issues despite an agreement on opening up the market, said Xu.

"They always ask 'what is the usual practice in ASEAN?', 'what do you want from us?'," said Ong. "We are swimming at the deep end of the pool, helping each other."

ASEAN is now involved in several FTA negotiations with nations including Japan and India. The China-ASEAN FTA is "easier and is more positive and healthier because we started from the big picture and then proceeded to address the smaller details", said Ong.

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