China’FTA PolicyRuan Zongze

September 27-28, 2006Tokyo, Japan

Basic Points

China’s FTA policy

Perspectives to Further Liberalization

Introduction

• The past few years has witnessed China’s readiness to establish FTAs with various trade partners

• By Far, China has been talking with about 27 countries and regions on the establishment of nine FTAs, covering one fourth of China’s total trade (including ASEAN, India, Pakistan, Australia, New Zealand…)

In 2005

• China signed an FTAs cargo trade agreement with Chile

• An agreement on an “early harvest” program with Pakistan for the future FTA establishment

• Started an all-round tariff reduction process with ASEAN

In 2005

• Launched FTA negotiations with South Africa, Latin America and South Asia.

• Conferring with Gulf countries, New Zealand and Australia about FTA construction.

• Implemented a Closer Economic Partners Arrangement (CEPA) with HK and Macao

10+3

• ASEAN agreed to pursue FTAs with China, Japan and South Korea respectively

• Growing demand for China, South Korea and Japan to work together for the future perspective of FTA arrangement, but there is little evidence that China, Japan and South Korea will kick off FTAs talks in the near future

Drivers

• China has been supportive to further liberalization of trade as it expanded substantially economic and trade ties with the outside world since joining the WTO

• Regional integration has been intensified

• Coping with the wave of FTAs particularly in the Asia Pacific region

Asia’s FTA Wave

• Major Asia Pacific nations are engaging FTA negotiations

• Japan, South Korea, ASEAN, South Asia, Australia and New Zealand etc

• ROK-U.S. FTA talk

Doha Round Debacles

• Little progress made with the WTO talks• The suspension of Doha round came after major

trading powers failed in a last-ditch bid to overcome differences in reforming world farm trade in July 2006

• The round, launched in the Qatari capital in 2001, stumbled from the start over how far rich nations would go to dismantle their huge farm subsides and open up their markets

APEC

• Trade liberalization has been one of the APEC’s priority agenda ever since its established

• There is a growing disappointment for its lacking of evident progress in recent years

• APEC needs to revitalize itself to re-focus on its main agenda

Summery

• China adopts a forward-looking approach to FTA

• Asia Pacific region is the priority

• APEC should move forward its trade liberalization agenda