ASEAN–China Free Trade Area: Advantages, Challenges, and Implications for the Newer ASEAN Member Countries

Abstract

Chinas accession to the World Trade Organization and the proposed ASEAN-China Free Trade Agreement will provide greater market access in resource- and agro-based products and some manufactured goods for the ASEAN-4 countries (Cambodia, Laos, Myanmar, and Vietnam). At the same time, there will be much greater competition from China in both ASEAN-4's home and third-country markets, especially in a wide range of labour- and technology-intensive manufactures. Special and differential (S&D) treatment and flexibility for the ASEAN-4 will be necessary to enable a more effective participation by the newer members in the proposed ASEAN-China FTA. In this connection, two proposals are made for enhancing domestic entrepreneurship and inter-firm networking, and for monitoring and benchmarking supply capabilities and competitiveness at the enterprise level within ASEAN and China.

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