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The free trade area agreement is one of the most dynamic instruments for bilateral and regional economic cooperation, and is also an important step toward regional economic integration with profound political and economic influence. Since 2000, the achievements of China’s free trade area agreement negotiations have been plentiful. In the wake of the comprehensive establishment of China - Association of Southeast Asian Nations free trade area (CAFTA) on January 1, China’s “free trade area process” has attracted more attention.

The establishment of China’s first free trade area “CAFTA” has already been bearing fruit and provided China with successful experience for the country’s future free trade area negotiations.

On January 1, 2010, CAFTA was established as the largest free trade area composed by developing nations. The establishment of CAFTA has strengthened the pre-existing economic and trade cooperation relations between China and ASEAN, and it upgraded their economic integration to an unprecedented level.

Since China joined the World Trade Organization (WTO), the free trade cooperation model has become the new form and starting point of China’s opening up policy, as well as China’s new platform of achieving mutual benefit with other nations. The establishment of CAFTA is a milestone of China’s opening up and regional economic integration strategy.

Looking back into the entire negotiation process, Zhang Kening, counselor for the Department of International Economics and Trade Relations from the Ministry of Commerce, had a lot of emotion. He said as the specific participating organ, the Ministry of Commerce has gone through a lot of unknown difficulties. The official negotiations of CAFTA began in 2002. At that time, some of the 10 ASEAN nations, such as Singapore, Malaysia and so on also discussed the free trade areas separately with foreign countries, but it was the first time that ASEAN discussed the free trade area as a whole with one country. On the other hand, as China’s first free trade area, CAFTA is also a new attempt.

Adding opportunity to “zero tariff”

Zhang Kening believes that CAFTA is a solid and successful step for China’s “going global” strategy. Generally speaking, the future of CAFTA is optimistic and can be embodied in three aspects such as the trade scale effect, investment effect and the supplementary effect, and the ASEAN nations also agree with this tendency and result. Moreover, because of the speeding up of economic integration tendency, CAFTA has encouraged lots of “10+1″ establishments, which has demonstrated that China plays a vital role in the communal development of the local region.

The initiating of CAFTA attracted lots of attention from the international community Eric Maskin, who was a Nobel economic prize winner, as well as the director of American Princeton Higher Research Institute, said in Guangxi that the establishment of CAFTA is good for all member countries’ development, and its trade volume will possibly surpass the North American free trade area after 10 years.

It may link China, Japan and Korea

If you take a look at other free trade area projects which have already completed negotiations or are still in the process, the atmosphere is quite friendly, mainly because all of the nations have a strong will to cooperate. This is not like WTO negotiations where all parties must sit down, no matter the will is there or not.

Japanese scholars pay attention to sensitive issues

Itoh Motoshige a Professor of economics from the graduate school at the University of Tokyo said: One of the bright parts of Hatoyama’s policies is the establishment of the East Asian Community, but its content is not clear. A prerequisite for establishing East Asia’s free trade area is signing the free trade agreement between Japan, China and South Korea. Economic theory and real diagnosis research all indicate that a free trade agreement will give contracting parties a lot of common economic interests.
 
South Korean officials are very active

Li Huimin, the negotiation representative on free trade agreement from the Ministry of Foreign Affairs and Trade of ROK said: The economic development of South Korea follows the typical exportation guidance mode and its economy depends highly on other foreign countries. In recent years, South Korea has been continuously devoted to signing free trade agreements with other nations and regards this as the most important way for its economy to open up. South Korea has already successively signed free trade agreements with the U.S., EU, India and other countries and regions, and it also takes a positive attitude towards establishing a free trade area between China, Japan and South Korea.