China aims to es­tab­lish net­work of high-level FTAs

China Daily (Hong Kong) - - BUSINESSDIGEST - By LI JI­ABAO li­ji­abao@chi­nadaily.com.cn

China plans to build a high-level net­work of free trade agree­ments while pledg­ing to act as a firm sup­porter of the mul­ti­lat­eral trade sys­tem un­der the World Trade Or­ga­ni­za­tion, trade of­fi­cials said on Wed­nes­day.

“China has ba­si­cally es­tab­lished a plat­form of free trade agree­ments cov­er­ing neigh­bor­ing re­gions and FTA net­works ra­di­at­ing the con­ti­nents,” Yao Jian, spokesman of the Min­istry of Com­merce, told re­porters in Bei­jing.

In the com­pre­hen­sive re­form plan re­leased in Novem­ber, China vowed to speed up its FTA strat­egy based on trade pacts with neigh­bor­ing economies and to de­velop a global and high-stan­dard FTA net­work.

“High-stan­dard means more fa­cil­i­ta­tion of goods trade, trade in ser­vices as well as in­vest­ment,” said Li Guanghui, vice-pres­i­dent of the Chi­nese Academy of In­ter­na­tional Trade and Eco­nomic Co­op­er­a­tion, a think tank of the min­istry.

Sun Yuan­jiang, deputy di­rec­tor gen­eral of the min­istry’s Depart­ment of In­ter­na­tional Trade and Eco­nomic Af­fairs, said that the China ( Shang­hai) Pi­lot Free Trade Zone will “break new ground and al­low us to gain ex­pe­ri­ence” to build fu­ture FTAs.

“The pi­lot pro­grams in the Shang­hai zone, such as loos­en­ing re­stric­tions on the ser­vices sec­tor, sim­pli­fy­ing busi­ness reg­is­tra­tion pro­ce­dures and im­prov­ing in­vest­ment fa­cil­i­ta­tion, are also new is­sues in fu­ture FTA ne­go­ti­a­tions. The pi­lot zone will cre­ate fa­vor­able con­di­tions for our fu­ture FTAs,” he said.

Sun de­clined to dis­close fur­ther plans for the free trade zone, as over­all guide­lines are be­ing han­dled by the State Coun­cil, China’s cab­i­net.

China has signed FTAs with 12 coun­tries and or­ga­ni­za­tions, in­clud­ing the As­so­ci­a­tion of South­east Asian Na­tions, Ice­land and Switzer­land, and is un­der ne­go­ti­a­tions with six economies, in­clud­ing South Korea, the Gulf Co­op­er­a­tion Coun­cil and Aus­tralia, ac­cord­ing to the min­istry.

As East Asia be­comes the new en­gine of global eco­nomic growth, China has boosted ef­forts for the China-South Korea FTA, the China-South Korea-Ja­pan FTA and the Re­gional Com­pre­hen­sive Eco­nomic Part­ner­ship as well as to up­grade the FTA with the ASEAN, said Sun.

How­ever, at the end of Novem­ber, South Korea ex­pressed in­ter­est in join­ing the United States-led Trans-Pa­cific Part­ner­ship, a high-level free trade pact for the Asia-Pa­cific re­gion. Ja­pan joined the 11-na­tion talks last sum­mer.

“At present, we don’t no­tice any im­pact of South Korea’s move on the China-South Korea FTA or on the China-Ja­pan-South Korea FTA. Fu­ture im­pact will de­pend on South Korea’s spe­cific move to join the TPP and the progress of the two FTAs,” said Sun.

He added that China has an “open at­ti­tude” to­ward the TPP and wel­comes any re­gional trade pacts as long as they can boost re­gional eco­nomic in­te­gra­tion.

“We’ve been study­ing the TPP from the very be­gin­ning. But join­ing the TPP is a big deal as it has unique rules, dif­fer­ent from our cur­rent ones. We are fol­low­ing its progress, study­ing its stan­dards and an­a­lyz­ing its ad­van­tages and dis­ad­van­tages,” he said.

As the World Trade Or­ga­ni­za­tion made lit­tle progress on re­new­ing the global free trade agree­ment in the past decade, re­gional FTAs are boom­ing. A to­tal of 221 FTAs were re­ported to the WTO by the end of Oc­to­ber, and 80 per­cent of them were launched in the past 10 years amid the global fi­nan­cial cri­sis and the fol­low­ing re­ces­sion, ac­cord­ing to Sun.

“How­ever, in the long run, no re­gional free trade pact can re­place the mul­ti­lat­eral trade mech­a­nism. Only the WTO can unify the dif­fer­ent stan­dards in the dif­fer­ent FTAs and ex­pand the scope of trade lib­er­al­iza­tion,” said Sun. “We firmly be­lieve that the mul­ti­lat­eral trade mech­a­nism is the main­stream and re­gional FTAs are sup­ple­ments.”

On Wed­nes­day, Com­merce Min­is­ter Gao Hucheng said dur­ing the Ninth WTO Min­is­te­rial Con­fer­ence, which is be­ing held in Bali, In­done­sia, from Dec 3 to Dec 6, that par­tic­i­pants should break the decade­long dilemma and reach a new global trade agree­ment.

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