Bangkok : A free-trade agreement between China and Southeast Asia came into force on Friday, consolidating a sixfold surge in economic activity over the past decade between countries representing a quarter of the world's population.
The agreement expands a limited 2005 trade area between China and the 10-member Association of Southeast Asian Nations (Asean), scrapping tariffs on about 90 per cent of goods. By 2015, duties must be cut to no more than 50 per cent on "highly sensitive" items, including ambulances in Brunei, popcorn in Indonesia, snowboard boots in Thailand and toilet paper in China.
China's economic clout in Southeast Asian countries has risen over the past decade as policy makers slashed tariffs on electronics, automobile parts and computer chips. Japan, India, Europe and the US have followed China in courting Asean, home to investments from Intel, the world's largest maker of computer chips, and Toyota Motor, the biggest carmaker.
"This FTA is going to make a difference at the margin to some Asean countries but not others," said Razeen Sally, a director of the Brussels-based European Centre for International Political Economy, a trade-policy research group. "Basically it takes down the tariffs but does little on all the non-tariff barriers where you would have much bigger gains to trade."
China's trade with Asean has jumped sixfold since 2000 to $193 billion last year.
