ASEAN–China Free Trade Area: background, implications and future development

ASEAN–China economic linkages are moving into a new direction. In November 2001, ASEAN and China agreed to establish an ASEAN–China free trade agreement in 10 years. More than a strategic move to signal China’s interest in Southeast Asia, there are implications of such an agreement. For both sides, there should be net trade gains: trade creation would offset trade diversion with ASEAN getting a slight trade diversion while the same trade...