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China and the Association of Southeast Asia Nations (ASEAN) signed an agreement on trade in services in Cebu yesterday a major step toward establishing a free trade area (FTA) in the region by 2010.

 

The deal, which was inked in the presence of Premier Wen Jiabao and 10 ASEAN leaders, will help firms from the Southeast Asian economic bloc gain improved market access to multi-billion dollar service sectors including banking, information technology and tourism.

 

The agreement "marks a key step forward in building the China-ASEAN Free Trade Area and lays the foundation for its full and scheduled completion," Wen said in a keynote speech yesterday at the 10th ASEAN-China Summit.

 

Trade between China and the ASEAN states has been booming in the past 15 years it grew more than 20 percent a year, reaching US$160 billion last year. The two sides are each other's fourth-largest trading partners.

 

Trade volume will continue to grow by about 20 percent this year although the possible outbreak of bird flu, natural disasters, regional security and global financial risks could slow the increase, Lu Jianren, a researcher at the Chinese Academy of Social Sciences, predicted.

 

An agreement on merchandise trade took effect in July, 2005, following an early harvest scheme of initial tariff cuts on meat, fish, dairy products, vegetables, fruits and nuts. The services agreement was one of the remaining key items to be finalized in addition to an investment agreement.

 

Speaking at the summit, Wen called for the acceleration of talks on the investment agreement so as to complete setting up of the FTA by 2010 as planned.

 

When completed, the China-ASEAN FTA will be the world's largest, encompassing around 1.7 billion consumers and with total trade estimated at US$1.2 trillion.

 

To promote the building of the FTA, China is ready to speed up discussions and sign a memorandum of understanding on establishing the China-ASEAN Trade, Investment and Tourism Promotion Center, Wen said.

 

China also proposes ASEAN transport collaboration be strengthened in the next 10 to 15 years to facilitate development of regional transportation and communication.

 

Wen noted China would enhance cooperation in combating transnational crime, maritime security, disaster reduction and relief, prevention and control of communicable diseases and environmental protection.

 

Wen was in Cebu to attend a series of East Asian summits that include the 10th ASEAN-China Summit, the 10th ASEAN Plus China, Japan and South Korea Summit ("10+3" Summit) and the 2nd East Asia Summit. He also chaired the 7th Chinese, Japanese and South Korean Leaders' Meeting yesterday.

 

(China Daily January 15, 2007)