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 highlighted the significance of the finalisation of CAFTA 3.0 amid global economic uncertainty and stated that it is both timely and critical.
According to BERNAMA News Agency, both ASEAN and China have been working on the upgrade for some time. Last year, they reached substantial outcomes, but the complete upgrade to version 3.0 could only be finalised this year, as Dr. Kao mentioned during a media interview. He is currently 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 noted that the update was essential to ensure the Free Trade Agreement (FTA) remains relevant and responsive to today’s trade realities, especially considering the scale of ASEAN-China trade. He pointed out that China has been ASEAN’s number one trading partner for 16 consecutive years, and similarly, ASEAN has been China’s top trading partner for the past five to six years. This upgraded agreement is anticipated to create more opportunities for businesses on both sides by enhancing trade facilitation, investment flows, and tourism connectivity.
Together, ASEAN and China represent a market of two billion people, making the upgrade highly significant, particularly in a period of global economic dynamics and uncertainty. Bilateral trade, driven by CAFTA since its launch in 2010, has shown strong growth, with last year’s trade reaching nearly US$1 trillion.
Looking ahead to the meetings in the coming days, Dr. Kao expressed hope that ASEAN leaders and partners would reaffirm their commitment to open trade and a rules-based international trading system. He emphasized ASEAN’s openness, transparency, and commitment to a multilateral system, with the World Trade Organisation (WTO) at its core.
Dr. Kao also reiterated ASEAN’s consistent position, as reflected in joint statements by ASEAN economic ministers and leaders supporting multilateralism. He emphasized that ASEAN works 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) to uphold 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 liberalisation and align the agreement more closely with current business trends and the digital economy.