Asean, China sign upgraded free trade deal
KUALA LUMPUR—The Association of Southeast Asian Nations (Asean) and China on Tuesday signed an upgrade to their free trade agreement, a development expected to open up new economic opportunities for the Philippines.
President Marcos and fellow Asean leaders witnessed the signing of the Asean-China Free Trade Area (ACFTA) 3.0 Upgrade at the Kuala Lumpur Convention Center here.
The protocol was signed by Malaysian investment, trade, and industry minister Tengku Zafrul Aziz and China’s commerce minister Wang Wentao, witnessed by Malaysian Prime Minister Anwar Ibrahim, as Asean’s chair, and Chinese Premier Li Qiang.
The ACFTA 3.0 seeks to expand Asean-China cooperation into new and emerging areas, including the digital and green economies, supply chain resilience, competition and consumer protection, as well as support for micro, small, and medium enterprises. The free trade area covers a combined market of more than 2 billion people and lowers tariffs on goods to boost flows of services and investment.
Marcos caveat
In a statement issued earlier through Palace press officer Claire Castro, Department of Foreign Affairs (DFA) Secretary Ma. Theresa Lazaro said the deal would help enhance the region’s economic ties with China.
“The Asean-China Free Trade Area has long been one of Asean’s most important economic partnerships. Now, with the 3.0 Upgrade, both sides are working to make this partnership more modern, more comprehensive, and better aligned with today’s global realities,” Lazaro said.
However, while welcoming the expanded trade pact, President Marcos expressed a caveat.
“This cooperation cannot exist alongside coercion,” he said, citing China’s hostile moves against the Philippines and other Asean nations in the South China Sea.
Mr. Marcos noted that the pact could help modernize trade practices and enable both sides to better respond to emerging economic challenges, but urged China to “commit to cooperation and meaningful engagement, especially in the South China Sea.”
Still, Mr. Marcos added that Manila would continue to engage constructively with China to manage differences.
Mr. Marcos has vowed to accelerate the conclusion of a Code of Conduct to govern behavior in the disputed waters when the Philippines assumes the Asean chairmanship next year.
Mutually beneficial
Southeast Asian political analyst Bridget Welsh said the upgraded pact would benefit both sides, especially in the areas of supply chains and sustainability.
“It also speaks to a global reality that non-US countries are coming together to strengthen trade relationships for their prosperity as a recoupling with the US is ongoing,” she said.
Beijing is pitching the expanded economic ties as an alternative to the protectionist policies of US President Donald Trump.
Li told an Asean-China summit meeting after the signing that closer cooperation could help overcome global economic uncertainties. He said “pursuing confrontation instead of solidarity brings no benefit” in the face of economic coercion and bullying, in a swipe at the United States.
Largest trade partner
In turn, Trump, who attended the opening of the Asean summit on Monday, signed reciprocal trade agreements with his Thai, Malaysian, Cambodian, and Vietnamese counterparts that would see the countries work to address tariff and nontariff barriers.
The 11-member Asean is China’s largest trading partner, with bilateral trade totaling a record $771 billion last year.
Meanwhile, US goods and services trade with Asean totaled an estimated $571.7 billion in 2024, up 13.4 percent ($67.6 billion) from 2023. —WITH A REPORT FROM AP
