China and ASEAN Member States Create a Zero-Tariff Trade Agreement
Regional trade agreements are on the rise and ASEAN and China are getting ready to completely do away with tariffs. Whether quotas and other measures to track and keep a lid on imports of competing sectors will also be done away with is yet to be seen. Although many economists argue about the danger of regional trade agreements when dealing with countries of different economic and financial strength, ASEAN countries as well as China has a track record of properly staggering economic reform to allow weaker economies the time to become stronger.
"Notwithstanding the impact of the Global Financial Crisis of 2008-10, further strong growth will result from the planned implementation of a zero tariff regime between China and six old ASEAN member countries − Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand − (for most goods) by 2010, and between China and the other four new ASEAN members − Cambodia Laos, Myanmar and Vietnam − by 2015.
"By 2010, the China-ASEAN free trade area will embrace a population of 1.8 billion and a combined GDP of US$2 trillion, making it the third largest market in the world after the European Union and the North American free trade area and investment relations and this in turn seem to be increasingly dominated by relations with China."
Due to the generally well established skill for China and certain ASEAN countries this new regional trade agreement could bring strong economic growth for the countries involved. But the general global trend has been to harm the less developed economies in favor of the financial benefits achieved by the most advanced economies within the agreement.
Watch this region for potentially surprising results for regional trade agreements.
Sources:LKYSPP Asian Trends Monitoring Bulletin, October 2010, part 4:
Regional Trade Agreements on the Rise signal: