Agriculture Reference
In-Depth Information
The free trade agreement between ASEAN and China (ACFTA)
The ACFTA was proposed initially by then Chinese Premier, Zhu Rongji, at
the ASEAN-China summit in November 2000. The framework agreement on
comprehensve economc cooperaton between Chna and ASEAN natons
was signed on 4 November 2002, and represented a milestone in cooperation
between the two partes. Accordng to the tme frame provded by the
agreement, the ACFTA covering trade in goods will be established by 2010
for Brunei, China, Indonesia, Malaysia, the Philippines, Singapore and
Thailand, and by 2015 for the new ASEAN member states, Vietnam, Laos,
Cambodia and Myanmar.
Wth a vew to acceleratng the mplementaton of the framework
agreement, the parties agreed to implement the EHP for a package of
agricultural and industrial products. Starting in 2004, the EHP committed
the countres to the elmnaton of tarffs on these products by 2006. As
shown in Table 13.2, the EHP comprises agricultural products under HS
Chapters 1-8. The original ASEAN members and China reduced the import
tarffs on these commodtes to zero before 1 January 2006. The newer
ASEAN members enjoy a longer perod before they are to elmnate tarffs
on these commodtes.
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According to the trade-in-goods agreement, participating countries
wll elmnate tarffs and non-tarff barrers substantally for all products
traded over time. For ASEAN+6 and China, the schedule for the bulk of the
goods subject to tariff elimination ranges from 2005-10. The newer ASEAN
members have untl 2015 to remove all mport tarffs. Countres have the
flexibility to protect a limited number of products that are considered
sensitive for their economies; however, the tariffs on most of these products
will be reduced to 0-5 per cent by 2018.
Methodology and policy scenarios
The man analytcal tool used n ths study s a global trade model based on
the Global Trade Analysis Project (GTAP). Following a brief introduction of
the model, efforts to enhance GTAP's database and parameters for China
are discussed. Finally, the baseline and two policy scenarios are defined
for the purposes of evaluating the effects of the EHP during 2004-06 and
the full implementation of the ACFTA during 2006-10.
