Thailand China Free Trade Agreement

Negotiators from the 16-nation Comprehensive Regional Economic Partnership (RCEP) are in the Thai capital this week to try to finalize the world`s largest free trade area with one-third of the world`s gross domestic product. The heads of state and government of China and the ASEAN member (AMS) signed the framework agreement on comprehensive economic cooperation between China and ASEAN at the sixth China-ASEAN summit in November 2002. In November 2004, Chinese Prime Minister Wen Jiabao and AMS leaders witnessed the signing of the China-ASEAN Free Trade Agreement, which came into force in July 2005. In January 2007, both sides signed the Trade in Services Agreement, which came into force in July of the same year. In August 2009, both parties signed the investment agreement. The creation of the China-ASEAN Free Trade Area strengthens close economic and trade ties between the two sides and also contributes to the economic development of Asia and the world as a whole. RCEP members worked on two parallel negotiations on market access for goods and services and a draft contract text, the official said. In the first nine months of the year, trade between Thailand and China reached $45.71 billion, or 11.6% over the same period last year. Overall, the Free Trade Agreement between China and Thailand did not please small farmers on both sides of the border. It was only favorable to businessmen who control trade and are able to expand its agriculture under contract, such as Thailand (ethnic Chinese) Group De Charoen Pokphand. On 1 January 2010, the average tariff rate on Chinese products sold in ASEAN countries increased from 12.8% to 0.6% until the remaining ASEAN members implemented the free trade area. Meanwhile, the average tariff rate on ASEAN products sold in China increased from 9.8% to 0.1%.

[13] Up to 2015, ASEAN`s total merchandise trade with China reached $346.5 billion (15.2% of ASEAN trade), and ACFTA accelerated growth in Chinese direct investment and trade cooperation. [6] But Thailand has said that the trade agreement is on the right track, as it chairs this year`s Association of Southeast Asian Nations (ASEAN), and ideally before a RCEP summit on November 4. “China is the world`s largest trading partner and one of the top ten foreign investors in Thailand,” Sontirat said. “With at least 1.4 billion people and strong economic growth, China is unquestionably one of the giants of the global economy and plays a crucial role in stimulating not only Asia, but also the global economy.” The Free Trade Agreement between China and Thailand was signed in June 2003 and came into force four months later in October 2003.