Kuala Lumpur: The upgraded ASEAN-China Free Trade Area (CAFTA) 3.0 agreement, set to be signed later this year, marks a key milestone in strengthening trade, investment, and connectivity between the two economic powers, ASEAN Secretary-General Dr. Kao Kim Hourn said. He emphasized the timeliness and critical nature of finalizing CAFTA 3.0 amidst global economic uncertainty.
According to BERNAMA News Agency, both ASEAN and China have been working on the upgrade for some time. Last year, the two sides reached substantial outcomes, but only this year have they been able to finalize the full upgrade to version 3.0. Dr. Kao shared this information during a media interview while leading the ASEAN Secretariat delegation to the 46th ASEAN Summit, the 2nd ASEAN-Gulf Cooperation Council (GCC) Summit, and the inaugural ASEAN-GCC-China Summit.
Dr. Kao highlighted the necessity of the update to ensure the FTA remains relevant and responsive to today’s trade realities, particularly considering the scale of ASEAN-China trade. China has been ASEAN’s number one trading partner for 16 consecutive years, and similarly, ASEAN has become China’s top trading partner over the past five to six years. This reflects the strength of their economic ties, with the upgraded agreement expected to open up greater opportunities for businesses on both sides by enhancing trade facilitation, investment flows, and tourism connectivity.
He further noted that together, ASEAN and China represent a market of two billion people, making this upgrade highly significant during this period of global economic dynamics and uncertainty. Since its launch in 2010, CAFTA has driven strong growth in bilateral trade, with China remaining ASEAN’s top trading partner for 16 straight years, while ASEAN has led as China’s largest trading partner for the past five years. Last year, bilateral trade rose to nearly US$1 trillion.
Looking ahead to the upcoming meetings, Dr. Kao expressed hope that ASEAN leaders and partners would reaffirm their commitment to open trade and a rules-based international trading system. He reiterated ASEAN’s openness, transparency, and commitment to a multilateral system, with the World Trade Organisation (WTO) at its core. ASEAN’s position has been consistent, as reflected in joint statements by ASEAN economic ministers and leaders supporting multilateralism.
Dr. Kao emphasized the importance of ASEAN working closely with its seven bilateral FTA partners-China, Japan, Korea, Australia, New Zealand, India, and Hong Kong-alongside the 15-nation Regional Comprehensive Economic Partnership (RCEP). He underscored the need to continue upholding open, rules-based trade. The ASEAN-China FTA, signed in 2004 and implemented in 2010, is among ASEAN’s most comprehensive trade frameworks. The upcoming 3.0 upgrade aims to deepen liberalization and align the agreement more closely with current business trends and the digital economy.