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The establishment of the ASEAN-China Free Trade Area (ACFTA), initiated in 2002, has strengthened the economic, trade, and investment relationships between ASEAN and China. This agreement has continuously evolved to support the growth of trade and investment between the two regions.
Currently, both China and ASEAN are in the process of negotiating ACFTA 3.0, with the aim of modernizing and enhancing the ASEAN-China Free Trade Area to address the changing economic landscape. This includes aligning with the current economic and trade context, focusing on the development of the digital economy, green and sustainable economic growth, supply chain management, and addressing emerging trade challenges such as cross-border e-commerce and trade in services.
The primary goals of ACFTA 3.0 are as follows:
1. Promoting the Digital Economy: Emphasizing the development of digital infrastructure, such as 5G technology, e-commerce, and digital connectivity between ASEAN and China, to support digital trade and related services.
2. Developing a Green Economy: ACFTA 3.0 aims to reduce environmental impact and promote the use of clean energy, supporting long-term sustainable economic growth.
3. Restructuring Supply Chains: Improving supply chains between ASEAN and China to enhance flexibility and adaptability to global economic changes, and reducing barriers to the movement of goods and services.
4. Addressing Non-Tariff Measures (NTMs): Reducing non-tariff trade barriers that hinder digital trade, such as data localization requirements and cross-border data control.
The development of the ASEAN-China Free Trade Area towards a framework focused on sustainable development is crucial, with several key points of emphasis:
1. Bilateral Rule-Setting on Digital Trade: Establishing clear and fair standards for both ASEAN and China in the fast-growing digital trade sector. This requires modern and flexible regulations that can accommodate technological changes and new innovations. ASEAN and China should set standards for data security, personal data protection, and legal issues related to online transactions.
2. Cross-Border E-commerce Development: The rapid growth of e-commerce is a key driver of digital economic expansion in ASEAN and China. As consumers can now conveniently buy and sell goods and services via digital platforms, both parties should focus on reducing trade barriers, such as simplifying complex customs tariffs, enhancing transparency in the operations of relevant import and export authorities, and creating systems that connect customs agencies across different countries for faster and more efficient cross-border goods transport. Furthermore, promoting the development of logistics infrastructure and secure online payment systems will enhance convenience and confidence in cross-border e-commerce transactions.
Additionally, both parties should work to reduce Non-Tariff Measures (NTMs), such as domestic data storage requirements, access to data, or controls on cross-border data flows, which act as significant barriers to the growth of digital trade between ASEAN and China.
ACFTA 3.0 in the digital era represents a crucial step in fostering trade and economic cooperation between ASEAN and China. Modern regulations for digital trade, promoting cross-border e-commerce, expanding cooperation in the services sector, and reducing non-tariff trade barriers will help strengthen economic resilience and increase global competitiveness for both regions. This collaboration will pave the way for shared prosperity in the rapidly growing digital economy.
Author:
Mr. Wimon Punkong
Deputy Executive Director (Academic)
International Institute for Trade and Development (Public Organization)
www.itd.or.th
Publication: Bangkok BIZ Newspaper
Section: First Section/World Beat
Volume: 37 Issue: 12726
Date: Wednesday, Sep. 11, 2024
Page: 8 (bottom)
Column: “Asean Insight”
