The free trade agreement reduced tariffs to 7,881 product categories, or 90% of imported products at zero. [15] This reduction came into effect in China and in the original six ASEAN members: Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand. The other four countries are expected to follow in 2015. [16] The framework agreement was signed on 4 November 2002 in Phnom Penh, Cambodia, by eleven heads of government. [4]: Hassanal Bolkiah (Sultan of Brunei Darussalam), Hun Sen (Prime Minister of Cambodia), Megawati Soekarnoputri (President of Indonesia), Bounnhang Vorachith (Prime Minister of Laos), Mahathir bin Mohamad (Prime Minister Minister of Malaysia), Than Sh (Prime Minister of Burma), Gloria Macapagal-Arroyo (President of the Philippines), Goh Chok Tong (Prime Minister of Singapore), Thaksin Shinawatra (Prime Minister of Thailand), Phan Ven Khi (Prime Minister of Vietnam) , Zhu Rongji (Prime Minister of the State Council of the People`s Republic of China). [4] [5] ASEAN members together have a population of more than 650 million. Indonesia accounts for more than 40% of the region`s population and its population has been the most opposed to the agreement. [17] [13] In accordance with the current regional and global economic landscape, the protocol amending the framework agreement for comprehensive economic cooperation between ASEAN and China was signed on 22 November 2015 at the 27th ASEAN Summit. The modernization of ACFTA aims to further streamline and improve economic cooperation, including changes to the agreement on trade in goods, services, investment and economic and technical cooperation (ECOTECH). Changes to the free trade area framework mainly concerned Vietnam.

These amendments were intended to help Vietnam reduce tariffs and were cited as guidelines. [14] Note: ACFTA Form E is a preferential certificate of origin that is recognised as proof of origin by recipient countries (AcFTA member states) for preferential treatment. 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] The first step involved the first six signatories who, until 2010, committed to abolishing their tariffs on 90% of their products. [6] Between 2003 and 2008, trade with ASEAN increased from $59.6 billion to $192.5 billion. [7] China`s transformation into a major economic power in the 21st century has led to an increase in foreign investment in the bamboo network, with a network of Overseas Chinese companies operating in Southeast Asian markets and sharing family and cultural ties. [8] [9] In 2008, ASEAN members and the People`s Republic of China had a nominal gross domestic product of about $6 trillion. [10] [11] After the first six signatories reached their target by 2010, the CLMV countries (Cambodia, PDR, Myanmar, Vietnam) pursued the same customs policy, with the same goal to be achieved by 2015. [6] In 2010, the ASEAN-China Free Trade Area became the largest free trade area in terms of population and the third largest in nominal GDP.

It was also the third volume of trade after the European Economic Area and the North American Free Trade Area. [12] [7] The framework agreement includes, among other things, the provisions relating to the creation of ACFTA within ten years: merchandise trade, early Harvest programmes, trade in services, investment, dispute resolution mechanism and economic cooperation. ACFTA, launched on January 1, 2010, provided the necessary platform for deepening economic engagement.