China and ASEAN, hit by U.S. tariffs, sign upgraded free trade agreement, Pg14

Key Highlights:

• China and the ASEAN bloc signed an upgraded free trade agreement (FTA) on Tuesday, focusing on the digital and green economy.
• ASEAN is China's largest trading partner, with bilateral trade reaching $771 billion in the past year.
• The upgraded FTA 3.0 aims to reduce trade barriers and strengthen supply chain connectivity.
• Negotiations for the upgraded ASEAN-China deal began in November 2022 and concluded in May of this year.

Detailed Insights:

• China aims to deepen engagement with ASEAN, which has a collective GDP of $3.8 trillion, in response to import tariffs imposed by the U.S.
• The upgraded agreement seeks to improve market access in sectors like agriculture, digital economy, and pharmaceuticals.
• Both China and ASEAN are part of the Regional Comprehensive Economic Partnership (RCEP), the world’s largest trading bloc.
• The RCEP is viewed as a potential buffer against U.S. tariffs, though its provisions are considered weaker than other trade deals.
• The first FTA between ASEAN and China came into force in 2010.

Key Concepts Involved:

• Free Trade Agreement (FTA): An agreement between two or more countries to reduce or eliminate trade barriers.
• ASEAN: A political and economic union of Southeast Asian nations.
• Regional Comprehensive Economic Partnership (RCEP): A multilateral trade agreement between ASEAN members and its free trade partners.