Enhanced by positive influences from major agreements, a revamped version of the ASEAN-China free trade deal holds the potential to strengthen trade and investment connections between Vietnam and China.
The Ministry of Industry and Trade (MoIT) is collaborating with relevant ministries and agencies to prepare documentation for the ongoing negotiations of the third iteration of the ASEAN-China Free Trade Area (ACFTA) scheduled for early 2024, with the location yet to be determined. Recent negotiation rounds occurred last year in Thailand, China, and Indonesia.
An expert from the MoIT’s Department of Science and Technology revealed ongoing studies on novel provisions related to AI, IT, and the Internet of Things to be incorporated into the new version.
“Given the complex nature of these issues amid rapid changes in the global high technology landscape, it will require time,” stated the expert. “The proposed provisions by Vietnam will be deliberated among other ASEAN nations and China.” The MoIT will also actively seek feedback on the ACFTA 3.0 upgrade negotiations.
Serving as the cornerstone of ASEAN-China relations, the ACFTA holds significance as ASEAN’s inaugural free trade agreement (FTA) with an external dialogue partner and China’s first FTA.
The ACFTA abolishes tariffs for 95 percent of tariff lines on exports to China originating from Vietnam, providing market access and ensuring a more predictable operational environment for service providers. The agreement also establishes a transparent, facilitative, and secure environment for investors, offering protection to investments.
Previous ACFTA upgrade negotiations concluded in 2015, taking effect in 2018. The ongoing 3.0 negotiations, initiated in November 2022, aim for conclusion by the end of 2024.
Within the latest upgrade negotiations, ASEAN member states and China will address trends such as supply chain connectivity, digitalization, and sustainability. Rules of origin, product-specific rules, and services are excluded from the upgrade’s scope, as these sectors were reviewed in previous negotiations.
Speaking at the 20th China-ASEAN Expo and China-ASEAN Business and Investment Summit in September 2023 in Guangxi province, Prime Minister Pham Minh Chinh emphasized the substantial progress in China-ASEAN relations over the past 20 years. Bilateral trade surged from $78.2 billion in 2003 to $975.6 billion in 2022, solidifying China and ASEAN as each other’s largest trading and leading investment partners.
Vietnam aspires to enhance its trade and investment ties with China not only through the ACFTA but also leveraging the benefits of the RCEP and China’s forthcoming membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
