Identifier
Created
Classification
Origin
07BEIJING609
2007-01-26 08:43:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Beijing
Cable title:
CHINA'S FIRST FTA SERVICES AGREEMENT
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UNCLAS SECTION 01 OF 02 BEIJING 000609
SIPDIS
SENSITIVE
SIPDIS
USDOC FOR DAS KASOFF
USDOC FOR ITA/MAC/AP/MCQUEEN
STATE PASS USTR STRATFORD, WINTER, ALTBACH
GENEVA PASS USTR
E.O. 12958: N/A
TAGS: ETRD WTRO ECON EINV CH XC AS NZ
SUBJECT: CHINA'S FIRST FTA SERVICES AGREEMENT
REF: A) 06 BEIJING 09501 B) BEIJING 0571 C) Manila 0179
BEIJING 00000609 001.2 OF 002
UNCLAS SECTION 01 OF 02 BEIJING 000609
SIPDIS
SENSITIVE
SIPDIS
USDOC FOR DAS KASOFF
USDOC FOR ITA/MAC/AP/MCQUEEN
STATE PASS USTR STRATFORD, WINTER, ALTBACH
GENEVA PASS USTR
E.O. 12958: N/A
TAGS: ETRD WTRO ECON EINV CH XC AS NZ
SUBJECT: CHINA'S FIRST FTA SERVICES AGREEMENT
REF: A) 06 BEIJING 09501 B) BEIJING 0571 C) Manila 0179
BEIJING 00000609 001.2 OF 002
1. (SBU) Summary: China signed its first Free Trade
Agreement (FTA) in Services with the ten countries of ASEAN
in January, 2007 during the 12th Annual ASEAN Summit in
Cebu, the Philippines. While initially opening a limited
set of services, the agreement brings China and ASEAN
closer to realizing their goal of a comprehensive FTA by
2010. Follow-on packages to expand services sectors are
expected over the next several years. According to a
Chinese Ministry of Commerce (MOFCOM) trade official, China
will submit the FTA in Services to the WTO Notification
Committee after consultation with ASEAN countries. End
Summary.
China Signs Its First Trade in Services Agreement
-------------- --------------
2. (SBU) In January 2007, at the 12th ASEAN Summit held in
Cebu, the Philippines, China and the 10 ASEAN countries
signed China's first Free Trade Agreement in Services. The
FTA in Services will enter into force in July 2007. Under
the terms of this first package, China will open up 5
service sectors (which include construction, environmental
protection, transportation, sports and commerce) and 26
sub-sectors. ASEAN agreed to open a total of 60 sub-
sectors covering finance, telecommunications, education,
tourism, construction and medical treatment. Negotiations
on a second package expanding the service sectors covered
are ongoing, and more packages are expected over the next
several years, according to the MOFCOM FTA negotiator.
3. (U) The Free Trade Agreement in Services marks the
second phase of China-ASEAN trade negotiations. In 2004 a
Trade in Goods Agreement was completed covering 7,000
products. The Agreement was implemented in 2005 and aims to
eliminate tariffs on over 90 percent of products. In Cebu,
the parties agreed to expedite consultations on the third
phase of the FTA which would involve an agreement on
investment, a Chinese Foreign Ministry official
coordinating the ASEAN meeting said. Further discussions,
including expanding the investment agreement to include the
ROK and Japan, is expected at the November ASEAN summit in
Singapore, according to this Foreign Ministry official
(reftel B). Full FTA integration is expected by 2010.
China and ASEAN Flexible
--------------
4. (SBU) During the negotiations, China offered five
services sectors and 26 sub-sectors to all ten ASEAN
countries on an equal access basis. Each ASEAN country
tailored its own offerings of services market opening. For
example, Thailand agreed to only four sectors while
Singapore agreed to seven. (See para seven for website
information on the complete agreement.) The MOFCOM FTA
negotiator ruefully compared ASEAN's flexibility with the
more challenging "comprehensive package deal" approach
BEIJING 00000609 002.2 OF 002
insisted upon by the Australians and New Zealanders in
their respective FTA negotiations with China.
China-ASEAN Trade Continues Double-Digit Growth
-------------- --
5. (U) China-ASEAN trade from January to November, 2006
totaled USD 145 billion, up 24 percent year-on-year,
according to China Customs statistics. China's exports
rose 29 percent to USD 64 billion. Chinese imports grew 20
percent to USD 81 billion. ASEAN was China's fifth largest
export market and the fourth largest source of imports from
January to November, 2006.
6. (U) Chinese enterprises invested USD 210 million in
ASEAN countries from January to September, 2006, according
to China Ministry of Commerce statistics. ASEAN countries
had actualized investments of USD 2 billion in China
totaling 1,610 projects over the same time period.
Filing Expected Pursuant to WTO Obligations
--------------
7. (SBU) China and ASEAN have yet to agree on how to
proceed with the filing of the Free Trade Agreement in
Services with the WTO Notification Committee. The MOFCOM
FTA negotiator said that in the past the China-ASEAN FTA on
Goods was filed and passed review by the WTO. Her office
fielded several questions on the Trade in Goods Agreement
from the United States and European Union, she noted. In
the spirit of transparency and increasing efficiency,
MOFCOM is making available the text of the Free Trade
Agreements on their English language website, she added.
(Note: the complete text of the China-ASEAN Services FTA
and related country-by-country annexes can be found at:
http://gjs.mofcom.gov.cn/aarticle/af/ah/20070 1/
20070104261073.html
Sedney
SIPDIS
SENSITIVE
SIPDIS
USDOC FOR DAS KASOFF
USDOC FOR ITA/MAC/AP/MCQUEEN
STATE PASS USTR STRATFORD, WINTER, ALTBACH
GENEVA PASS USTR
E.O. 12958: N/A
TAGS: ETRD WTRO ECON EINV CH XC AS NZ
SUBJECT: CHINA'S FIRST FTA SERVICES AGREEMENT
REF: A) 06 BEIJING 09501 B) BEIJING 0571 C) Manila 0179
BEIJING 00000609 001.2 OF 002
1. (SBU) Summary: China signed its first Free Trade
Agreement (FTA) in Services with the ten countries of ASEAN
in January, 2007 during the 12th Annual ASEAN Summit in
Cebu, the Philippines. While initially opening a limited
set of services, the agreement brings China and ASEAN
closer to realizing their goal of a comprehensive FTA by
2010. Follow-on packages to expand services sectors are
expected over the next several years. According to a
Chinese Ministry of Commerce (MOFCOM) trade official, China
will submit the FTA in Services to the WTO Notification
Committee after consultation with ASEAN countries. End
Summary.
China Signs Its First Trade in Services Agreement
-------------- --------------
2. (SBU) In January 2007, at the 12th ASEAN Summit held in
Cebu, the Philippines, China and the 10 ASEAN countries
signed China's first Free Trade Agreement in Services. The
FTA in Services will enter into force in July 2007. Under
the terms of this first package, China will open up 5
service sectors (which include construction, environmental
protection, transportation, sports and commerce) and 26
sub-sectors. ASEAN agreed to open a total of 60 sub-
sectors covering finance, telecommunications, education,
tourism, construction and medical treatment. Negotiations
on a second package expanding the service sectors covered
are ongoing, and more packages are expected over the next
several years, according to the MOFCOM FTA negotiator.
3. (U) The Free Trade Agreement in Services marks the
second phase of China-ASEAN trade negotiations. In 2004 a
Trade in Goods Agreement was completed covering 7,000
products. The Agreement was implemented in 2005 and aims to
eliminate tariffs on over 90 percent of products. In Cebu,
the parties agreed to expedite consultations on the third
phase of the FTA which would involve an agreement on
investment, a Chinese Foreign Ministry official
coordinating the ASEAN meeting said. Further discussions,
including expanding the investment agreement to include the
ROK and Japan, is expected at the November ASEAN summit in
Singapore, according to this Foreign Ministry official
(reftel B). Full FTA integration is expected by 2010.
China and ASEAN Flexible
--------------
4. (SBU) During the negotiations, China offered five
services sectors and 26 sub-sectors to all ten ASEAN
countries on an equal access basis. Each ASEAN country
tailored its own offerings of services market opening. For
example, Thailand agreed to only four sectors while
Singapore agreed to seven. (See para seven for website
information on the complete agreement.) The MOFCOM FTA
negotiator ruefully compared ASEAN's flexibility with the
more challenging "comprehensive package deal" approach
BEIJING 00000609 002.2 OF 002
insisted upon by the Australians and New Zealanders in
their respective FTA negotiations with China.
China-ASEAN Trade Continues Double-Digit Growth
-------------- --
5. (U) China-ASEAN trade from January to November, 2006
totaled USD 145 billion, up 24 percent year-on-year,
according to China Customs statistics. China's exports
rose 29 percent to USD 64 billion. Chinese imports grew 20
percent to USD 81 billion. ASEAN was China's fifth largest
export market and the fourth largest source of imports from
January to November, 2006.
6. (U) Chinese enterprises invested USD 210 million in
ASEAN countries from January to September, 2006, according
to China Ministry of Commerce statistics. ASEAN countries
had actualized investments of USD 2 billion in China
totaling 1,610 projects over the same time period.
Filing Expected Pursuant to WTO Obligations
--------------
7. (SBU) China and ASEAN have yet to agree on how to
proceed with the filing of the Free Trade Agreement in
Services with the WTO Notification Committee. The MOFCOM
FTA negotiator said that in the past the China-ASEAN FTA on
Goods was filed and passed review by the WTO. Her office
fielded several questions on the Trade in Goods Agreement
from the United States and European Union, she noted. In
the spirit of transparency and increasing efficiency,
MOFCOM is making available the text of the Free Trade
Agreements on their English language website, she added.
(Note: the complete text of the China-ASEAN Services FTA
and related country-by-country annexes can be found at:
http://gjs.mofcom.gov.cn/aarticle/af/ah/20070 1/
20070104261073.html
Sedney