What is the ASEAN-China Free Trade Agreement (ACFTA)?
The ASEAN-China Free Trade Agreement (ACFTA), officially known as the Agreement on the Establishment of the ASEAN-China Free Trade Area, is a comprehensive economic pact between the ten ASEAN member states and the People’s Republic of China. Often abbreviated as ACFTA, it is also sometimes referred to as the Framework Agreement on Comprehensive Economic Cooperation between ASEAN and China. This agreement involves Brunei, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam, alongside China, forming one of the world’s largest free trade areas.
Signing and Entry into Force:
The formation of ACFTA was implemented through a series of legal instruments:
Agreement/Instrument | Date of Signing | Date of Entry into Force |
| Framework Agreement on Comprehensive Economic Cooperation | 04/11/2002 | 01/01/2003 |
| Agreement on Trade in Goods | 29/11/2004 | 01/01/2006 |
| Agreement on Trade in Services | 14/01/2007 | 01/07/2007 |
| Agreement on Investment | 15/08/2009 | 01/02/2010 |
Trade in Goods Agreement (ACFTA): Entered into force on 01/01/2006.
Vietnam’s participation: Vietnam signed a Memorandum of Understanding with China on the implementation of Trade in Goods on 18/07/2005.
Negotiation Background and Reasons for Establishing the FTA
Background: Recognising the enormous potential for economic cooperation between ASEAN and China’s rapidly growing economy, both sides signed the Framework Agreement on Comprehensive Economic Cooperation in 2002, laying the foundation for the establishment of a Free Trade Area (FTA).
Reasons for establishment:
- Strengthening Economic Cooperation: To promote and expand economic, trade, and investment relations among the parties.
- Establishing a Large Market: To create a vast common market with more than 1.9 billion people (at the time of establishment), minimise trade barriers, and deepen economic linkages.
- Facilitating Liberalisation: To liberalise trade in goods and services and establish a clear and transparent investment mechanism.
- Narrowing the Development Gap: To provide technical assistance and integration support for ASEAN’s new member states (CLMV).
What are the key components of the ACFTA agreement?
The ACFTA agreement is structured around a foundational Framework Agreement, complemented by distinct Agreements and Protocols covering Trade in Goods, Trade in Services, and Investment. Unlike more recent free trade agreements that often feature a unified chapter structure, ACFTA adopts a “pillar-based” approach, meaning its core provisions are distributed across these separate, yet interconnected, legal instruments.
| Key Instrument | Pillar Content |
|---|---|
| Framework Agreement | Provides the legal foundation and general principles for Comprehensive Economic Cooperation. |
| Agreement on Trade in Goods | Tariff Commitments: Tariff reduction schedules (Normal Track; Sensitive Track). Rules of Origin (ROO): Product criteria (40% RVC or CTH). Customs procedures; TBT; SPS. |
| Agreement on Trade in Services | Commitments on market access for services according to the four modes of supply. |
| Agreement on Investment | Provisions to encourage; protect; and facilitate investment activities. |
| Protocol on Dispute Settlement Mechanism | Establishes mechanisms to resolve disputes arising from the implementation of the Agreement. |
| Protocol on Upgrading ACFTA (ACFTA 3.0 – under negotiation) | Expands coverage to new areas such as Digital Economy; Green Economy; Supply Chain Connectivity; etc. |
Where can I find official ACFTA documents and resources?
To access official ACFTA documents and related resources, you can typically find the full text of the Framework Agreement, Agreements on Goods, Services, Investment, and associated Protocols published on various government portals and relevant institutional websites. For instance, the WTO and Integration Center – VCCI serves as a valuable reference source, offering Vietnamese translations of official documents and amended Protocols, often categorized under the ASEAN – China (ACFTA) section on their website: https://aecvcci.vn/.
Implementation Guides (Handbooks, Websites):
- Vietnam FTA Portal (Ministry of Industry and Trade): Provides summaries of Vietnam’s commitments, tariff reduction schedules, and Rules of Origin. Website: https://vntr.moit.gov.vn/
- Circulars on Rules of Origin (Form E C/O): The Ministry of Industry and Trade issues specific Circulars guiding Rules of Origin under ACFTA (e.g., Circular No. 12/2019/TT-BCT).
- Electronic Certificate of Origin Management System (eCoSys): Provides services for the issuance and verification of electronic C/Os, including Form E (ACFTA).
Website: https://ecosys.gov.vn/ - ASEAN Secretariat: Publishes original English texts and information on ACFTA upgrading negotiations. Website: https://asean.org/
See other FTAs:
