The Hindu : Business : Benefits for ASEAN

Online edition of India's National Newspaper
Thursday, Jul 07, 2005

Business

Business

Benefits for ASEAN

FTA with China will open up huge market

BEIHAI: GUANGXI: Members of the Association of Southeast Asian Nations (ASEAN) will benefit much more from the China-ASEAN Free Trade Area (CAFTA) arrangement than their partner, China, said a senior official with the U.S.-based commerce organisation at a business forum held here on Monday.

Compared with ASEAN members, China enjoys few advantages in terms of production costs, said Siva Yam, President of the United States of America-China Chamber of Commerce (USCCC), while addressing the China-ASEAN Business Forum on Monday.

Tariff reduction for more than 7,000 categories of goods provided by the Trade in Goods Agreement had little effect on Chinese enterprises in the short term, but would translate into a more open huge market for ASEAN members, he added. Still, the building of CAFTA benefits China in two major aspects: it will not make trouble for China, which enjoys close economic ties with ASEAN member countries; and the recognition of China's full market economy status by ASEAN will help the nation tackle the problem of anti-dumping investigations in the United States, according to Mr. Yam.

A free trade area means not only eliminating tariffs, but also realising the free flow of capital to ensure the sustainable development of the whole area, said Me. Yam. China's exports to ASEAN countries reached $42.9 billion in 2004, and its imports from those countries hit $62.98 billion.

Out of the ten members of ASEAN, Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand enjoy trade surpluses with China. Vietnam has taken the place of Australia to be the largest import source of coal for China. Founded in 1993, the USCCC has 200-plus members, of whom 90 per cent are American enterprises.

The council is dedicated to helping U.S. businesses to enter China and vice versa. — Xinhua

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