China and the Southeast Asian bloc ASEAN have inked a revised trade pact that broadens their collaboration into digital and green sectors. The upgraded “version 3.0” of the Free Trade Agreement was officially signed during an ASEAN leaders’ summit in Kuala Lumpur, Malaysia.
The agreement comes at a time when nations are seeking to shield themselves from escalating global trade frictions, particularly with the US. This is the first major overhaul of the ASEAN–China FTA since its 2010 introduction.
Beijing had suggested that the deal would focus on improving agriculture and digital services
China has moved to expand cooperation with ASEAN, which has a collective GDP of $3.8 trillion, as Washington’s tariffs weigh on global trade. The revamped pact includes provisions for the digital and green economies, as well as other emerging industries. Beijing had earlier signaled that the deal would strengthen trade in areas such as agriculture, digital services, and pharmaceuticals with ASEAN.
China considers the renewed cooperation as a key step in navigating the current global economic climate. ASEAN, its 11-member regional partner, remains its top trading ally, with trade totaling $771 billion. Discussions on the upgraded ASEAN–China Free Trade Agreement began in late 2022 and concluded in May of this year, shortly after Trump’s new wave of tariffs took effect.
Both China and ASEAN continue to participate in the Regional Comprehensive Economic Partnership (RCEP), a trade pact that accounts for approximately 30% of global GDP and one-third of the world’s population. Malaysia hosted the first RCEP leaders’ summit in five years in Kuala Lumpur on Monday, preceding the signing of the new ASEAN–China Free Trade Agreement.
According to analysts, participation in frameworks such as RCEP might offer some protection against US tariffs, but the competing interests of its members limit its effectiveness.
Japan and the US signed an agreement on securing key minerals and rare earths
Meanwhile, on Monday, US President Donald Trump held talks with Japan’s recently appointed Prime Minister, Sanae Takaichi, the nation’s first woman leader, to agree on a framework ensuring access to key minerals and rare earths, considering China’s new restrictions on the exports. Trump heaped praise on Japan’s first female leader as the two signed a deal during Trump’s visit to Tokyo.
A White House statement released earlier stated that the two countries will work together to strengthen their rare earth and mineral supply chains by addressing unfair trade and non-market practices. The two sides were also working toward completing a trade deal. Japan’s former leader had reached an agreement with the US, setting most export tariffs at 15%, but the deal has yet to be signed.
The White House told reporters: “Within six months of the date of the framework, Japan and the US intend to take measures to support projects to generate end-products for delivery to buyers in the US, Japan, and like-minded nations.”
Still, Trump is seeking deeper market access for the United States in Japan, particularly in the automotive, agricultural, and technology sectors. He’s also pressuring Tokyo to buy more US rice and soybeans and ease restrictions on American cars.
Japan is also expected to offer a package of US investments under a $550 billion deal reached this year, including shipbuilding and a commitment to robust purchases of US soybeans, gas, and pickup trucks, sources familiar with the talks noted.
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Source: https://www.cryptopolitan.com/china-and-asean-sign-free-trade-pact/
