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New Free Trade Area in Sight

The foundations of the world's largest free trade area may be laid next month as China and members of the Association of Southeast Asian Nations (ASEAN) plan to sign deals on trade and dispute resolution mechanisms, said a senior trade official.

China is scheduled to meet ASEAN leaders in Vientiane, capital of Laos, in November.

Agreement in principle on a free trade pact was reached when ministers met in Jakarta, Indonesia on September 4 and three working groups were set up to consider: rules of origin, trade of goods and trade of services.

An Min, Chinese vice minister of Commerce, said China and ASEAN members could establish the free trade area (FTA) as early as next year. By 2010, it could become the world's largest FTA with 1.7 billion consumers and a combined gross domestic product of US$2 trillion.

The recognition of China's market economy status by all ASEAN members in Jakarta cleared the way to reach a deal on the trade of goods, and An believes the FTA will offer great prospects as the early harvest program has proved.

This initiative was launched January 1 this year, offering preferential tariffs on more than 500 items, mostly agricultural products. Agricultural trade was boosted with China importing US$330 million worth of fruit and vegetables from ASEAN countries in the first half of the year, an increase of 38.7 percent from the previous year. During the same period, China's ASEAN exports jumped 33.9 percent to US$270 million.

During a summit in Bali last October, a decision was made to hold the first China-ASEAN Expo from November 3 to 6 in Nanning, capital of the Guangxi Zhuang Autonomous Region. By the end of August 4,261 enterprises had filed applications to fill the 1,763 booths available.

(China Daily October 22, 2004)

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