WORLD TRADE  
ORGANIZATION  WT/COMTD/51/Add.2 
8 February 2006 
 (06-0539) 
Committee on Trade and Development Original:   English 
  
FRAMEWORK AGREEMENT ON COMPRE HENSIVE ECONOMIC COOPERATION 
BETWEEN THE ASSOCIATION OF SOUTH EAST ASIAN NATIONS  
AND THE PEOPLE'S REPUBLIC OF CHINA 
 
Communication from the Parties to the Agreement
 
 
Addendum  
  
 The following communication, dated 3 February 20 06, is being circulated at the request of the 
European Communities. 
 
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AGREEMENT ON TRADE IN GOODS OF THE FRAMEWORK AGREEMENT  
ON COMPREHENSIVE ECONOMIC COOPERATION BETWEEN  
THE ASSOCIATION OF SOUTH EAST ASIAN NATIONS (ASEAN)  
AND THE PEOPLE'S REPUBLIC OF CHINA 
 
 At the last meeting of the Committee on Trade and Development (CTD) held on 
28 November 2005, a discussion was held on the Ag reement on Trade in Goods of the Framework 
Agreement on Comprehensive Econom ic Cooperation between the Association of South East Asian 
Nations and the People's Republic of China on the basi s of the notification made by the Parties to the 
Agreement (WT/COMTD/N/20/Add.1 – WT/COMTD/51/ Add.1).  At that meeting, the European 
Communities (EC) indicated that it was still examini ng the notification and would wish to come back 
to it at a future meeting of the CTD.  In light of that examination, the EC has prepared the following 
questions on the Agreement.  The EC looks fo rward to receiving the responses of the ASEAN 
members and China at the next meeting of the CTD.  
  
W
RITTEN QUESTIONS BY THE EUROPEAN COMMUNITIES  
TO THE COMMITTEE ON TRADE AND DEVELOPMENT WITH  
RESPECT TO CHINA -ASEAN  FREE TRADE AGREEMENT  
 
 While the EC commends the ASEAN countries and China on their important steps to 
facilitate regional integration by recently conc luding a comprehensive Free Trade Agreement 
(ACFTA), the EC seeks further clarifications by th e parties of the content of the agreement and its 
potential effects on regional as well as global trade.  In this context, the EC wishes to recall the 
transparency requirements under paragraph 4(a) of the Enabling Clause.  Also, the EC reserves its 
right to come back at a later stage with possible requests for prompt consultations in accordance with 
paragraph 4(b) of the Enabling Clause. 
 Moreover, the EC notes that the FTA parties,  under Article 3 of the Framework Agreement, 
have agreed that the ACFTA should conform with the level of ambition required by GATT WT/COMTD/51/Add.2 
Page 2  
 
  Article XXIV and notably paragraph 8 of Article XXIV by stating:  "In addition to the Early Harvest 
Programme under Article 6 of this Agreement, and w ith a view to expediting the expansion of trade in 
goods, the Parties agree to enter into negotiations in  which duties and other restrictive regulations of 
commerce (except, where n ecessary, those permitted under Article XXIV(8)(b)  of the GATT) shall be 
eliminated on substantially all trade in goods betw een the parties".  Both the Framework Agreement 
and the ACFTA also include provisions beyond preferential duty treatment, by covering investments, 
services, non-tariff barriers and cooperation on vari ous regulatory and customs related matters.  
Therefore, the EC believes that  the recently concluded FTA in goods should have been notified under 
GATT Article XXIV and be referred to the WTO Committee on Regional Trade Agreements (CRTA).  The EC strongly encourages the parties of the FTA to take the nece ssary steps towards this 
end.  
 Finally, the EC has 12 specific questions on relevant aspects of the agreement.  In a few 
instances, the EC have rephrased earlier questions so  as to allow the parties the opportunity to respond 
in a more precise manner on aspects under the FTA. 
1. State-of-play and coverage on th e Early Harvest Programme (EHP) 
Question 1 :  According to the Chinese Ministry of Fi nance, China, Brunei, Malaysia, Indonesia, 
Myanmar, Singapore and Thailand gave tariff cuts to  each other on 7,455 "kinds of commodities" as 
of 20 July 2005.  The Agreement on Trade in G oods does not include actual information on tariff 
lines' reductions materialised  since the entry into force of the EHP (July 2003).  Therefore, could the 
parties facilitate updated figures on the progression of the phasing-out/reduction of tariff lines, in 
order to provide an annual state-of-play of the pla nned schedule, since the EHP entered into force?  
Question 2 :  As regards Vietnam, the Agreement on Tr ade in Goods does not include the definitive 
phasing-out schedule for its Sensitive List, since "it shall be determined not later than 
31 December 2004".  In light of this, the EC woul d like to know whether Viet nam has determined its 
Sensitive List?  If so, we would appreciate if Viet nam facilitated the content of the aforementioned 
List. 
Question 3 :  As regards the excluded products for Chap ters 01-08 covered in the EHP, could the 
parties facilitate updated figures on the current  situation since the excluded lists for Malaysia, the 
Philippines and Laos, and China were to  be provided as of 1 March 2003?  
2. Products covered under the FTA and trade figures (follow-up to earlier questions) 
Question 4 :  Figures for the products in the Sensitive List  and in the Highly Sensitive List  should also 
be provided, in the view to analyse their contribution to total trade.  What percentage of bilateral trade 
do these sensitive products represent?  What percenta ge of bilateral trade will be duty free on 2012 
and on 2015?  
Question 5 :  According to the China Council for the Pr omotion of International Trade, the ACFTA 
will report a population of 2 billion, a combined GDP of 2 trillion US dollars and a total trade volume 
of 1.2 trillion dollars – exceeding the NAFTA in te rms of trade volume upon its establishment.  By 
2020, it is said to account for 4 trillion US dollars of  GDP, thus reaching EU levels.  Moreover, trade 
between China and the ASEAN reach ed 105.9 billion US dollars in 2004, a rise of 35.3 per cent over 
2003 volume.  The ASEAN has been China's fifth largest trade partner for 12 consecutive years. 
According to statistics provided by China's General Administration of Customs, bilateral trade in the 
first six months of 2005 approximated 60 billion US dollars.  Given the outstanding economic 
significance of the FTA, the EC would be grateful if the parties could provide with trade figures, before (e.g. 2001-2004) and at the entry into for ce of the FTA, for the products covered both in the 
EHP and in the Agreement on Trade in Goods.  WT/COMTD/51/Add.2 
 Page 3 
 
 
  3. Modification of concessions 
Question 6 :  According to Article 6 of the Agreement, any party is entitled to modify and withdraw 
concessions made to any other part y under the Agreement.  This would seem to take place on a purely 
bilateral basis while the Agreement itself applies to all parties.  Could the parties clarify whether the 
modifications of concessions are made on a bilateral basis?  If so, how would the very same products 
from other Parties to the agreement be affected by the bilateral modification of concessions on 
products from one Party?  Finally, could the parti es elaborate on the procedures of this mechanism? 
4. Further concessions and the operation of the Agreement 
Question 7 :  Could the Parties inform whether there is any agreement within ASEAN that sectors and 
products if any which are liberalised nationally w ith China and not yet liberalised under the ASEAN 
FTA would also be offered to their ASEAN colleagues?  
Question 8 : Could the parties elaborate on how the FTA will operate in practice so as to ensure that 
Chinese goods entering one ASEAN country will ci rculate freely throughout ASEAN without 
incurring additional tariffs at internal borders?  
5. Inbuilt agenda under the Framework Agreement and the FTA 
Question 9 : According to Article 23, "The Parties undertake to complete their internal  procedures for 
the entry into force of this Agre ement prior to 1 January 2005".  But it follows that, in case of not 
compliance with that deadline, their obligations  and rights will commence on the date of the 
completion of such internal procedures, which should be  notified to all the other Parties in writing.  In 
light of this option, could the parties confirm th at all parties have all completed their internal 
procedures?  
Question 10 :  Article 7.3 of the Framework Agreement sets out measures to strengthen co-operation, 
including trade facilitation measures such as custom s co-operation.  However, there is no further 
mention in the Agreement on Trade in Goods of such measures.  What, if any, practical provisions for 
co-operation are foreseen in this field?   
Question 11 : According to Article 6.4 of the Framewor k Agreement, "In addition to the EHP for 
trade in goods [...], the Parties will explore the f easibility of an early harvest programme for trade in 
services in early 2003".  The Malaysian Permanent Delegation in Geneva informed the EC on the 
26 September 2005 that an Agreement for Trade in Services was "expected to be signed during the 
ASEAN-China Summit in December 2005" and that there were still ongoing negotiations for the 
Agreement on Investment.  Since there has been no further notification regarding the EHP for trade in 
services, could the Parties inform whether an EH P was finally agreed?  Did the aforementioned 
ASEAN-China Summit agree on the signature of the Agreement for Trade in Services?  If so, could 
the parties confirm the date of the entry into fo rce of the Agreement and inform when it will be 
notified in the Committee on Trade in Services fo r assessment of compliance with Article V of 
GATS?  
Question 12 :  Article 5 of the Framework Agreement poi nts out the parties' aim to "enter into 
negotiations in order to progressively liberalise the investment regime".  Could the parties brief on the 
state-of-play of the ongoing negotiations and whethe r they have concluded a ny investment agreement 
covering manufacturing?  If a date for the entry into  force is agreed, could the parties inform when the 
CRTA will be notified?  
 
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