China and Southeast Asian nations ink trade agreement

China and Southeast Asian nations ink trade agreement

China and ten Southeast Asian nations signed a deal in Laos yesterday in order to form the world's largest free trade area by 2010. The deal will lift tariffs on certain goods. China and Southeast Asian nations produce $2 trillion in combined goods and services per annum. On the other hand, NAFTA, which combines the US, Canada and Mexico in a free trade area, had GDP of $11.4 trillion in 2001 and the second largest trade bloc the European Union had GDP of $7.9 trillion in 2001. According to the deal, in the first stage China and the six Southeast Asian countries-Indonesia, Malaysia, Philippines, Singapore, Thailand and Brunei- will reduce tariffs on 7'000 categories of goods to 0%-5% on July 15, 2005. However, the duties on “sensitive goods” such as sugar, iron, steel and cars will not be included. The other four countries- Cambodia, Laos, Vietnam and Burma will not be included in the trade pact till 2015. In the meeting held in Laos, the participants agreed to hold East Asia Summit, under which the 10 members of Southeast Asia Association as well as China, Japan and South Korea will hold summits every two years. The first East Asia Summit will be held in Malaysia in 2005.