Gene Zhang under a CC LicenceThursday, 01 April 2010
Written by Walden Bello
Source: The New Internationalist
On 1 January 2010, the China-ASEAN (Association of Southeast Asian Nations) Free Trade Area went into effect. Touted as the world’s biggest Free Trade Area, CAFTA is billed as having 1.7 billion consumers, with a combined gross domestic product of $5.93 trillion and total trade of $1.3 trillion.
Under the agreement, trade between China and six ASEAN countries (Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand) has become duty-free for more than 7,000 products. By 2015, the newer ASEAN countries (Vietnam, Laos, Cambodia and Burma) will join the zero-tariff arrangement.
The propaganda mills, especially in Beijing, have been trumpeting this new free trade deal as ‘bringing mutual benefits’ to China and ASEAN. A positive spin on CAFTA has also come from President of Philippines, Gloria Arroyo, who hailed the emergence of a ‘formidable regional grouping’ that would rival the US and the European Union.
The reality, however, is that most of the advantages will probably flow to China. At first glance, it seems like the bilateral relationship has been positive. After all, demand from a Chinese economy growing at a breakneck pace was a key factor in Southeast Asian growth beginning around 2003, after a period of low growth following the 1997/1998 Asian financial crisis.
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