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The Impacts of China-ASEAN FTA on Business and Its implication for Trade Facilitation

The Impacts of China-ASEAN FTA on Business and Its implication for Trade Facilitation. Wang Yuzhu Institute of Asia-Pacific Studies, CASS June 25, 1010, Beijing. Outline. About the survey What we found Some implications for trade facilitation . I. About the Survey. Background

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The Impacts of China-ASEAN FTA on Business and Its implication for Trade Facilitation

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  1. The Impacts of China-ASEAN FTA on Business and Its implication for Trade Facilitation Wang Yuzhu Institute of Asia-Pacific Studies, CASS June 25, 1010, Beijing

  2. Outline • About the survey • What we found • Some implications for trade facilitation

  3. I. About the Survey • Background • The enterprises covered • The questionnaires

  4. FTA strategy of China

  5. ASEAN-China FTA for Trade in goods (Enter into force from 2005)

  6. Enterprises coveredthe enterprises were chosen from six provinces (shown as follow). The 436 firms are mainly located in 6 sectors, namely electronic products and components(23%), textiles and garments(24%), auto and auto parts(14%), machinery and other sectors(24.5%) and agricultural products(14%), while the left 40% belongs to other sectors.

  7. Rules of the enterprises selection • The selection of the companies are based on three factors: • (1) size—including small, medium and large size; • (2) ownership—both private owned, joint venture, wholly foreign owned and state owned; • (3) export—main products produced for exports to the FTA partners. • But because our survey depends on local governments, we are not sure whether they had seriously abided by the above rules.

  8. The questionnaires The questions were asked to filled cover 5 major items: " general background", "use of FTA preference", "perception of impact of FTA’s", "overlapping rules of origin in FTA", "FTA policy issues and institutional support" and 17 sub-items.

  9. II. What we found • First, the public recognition of the FTA agreement is not as high as expected; • Second, our questionnaires shown that the utilization rate of CAFTA is low, even though it’s the highest one of all the FTAs China have signed till now. • Many factors helped to explain this low rate of utilization, and some of them remind us the necessary of trade facilitations.

  10. Public recognition of FTA agreement According to the questionnaires, among the 436 firms, 35.3% answered that they know the tariff reduction arrangement; 56% have basic knowledge of the “Rule of Origin”; 56% know how to apply the preferences certification (Form-E), and only 39% know the custom procedure for preference trade under CAFTA

  11. FTA utilization

  12. Reasons for non-use FTAs(multiple answers are allowed)

  13. III. The implication for trade facilitations • First, sometime FTA agreement is not easy to reach, while trade facilitation can help promote international trade no matter we have free trade arrangements. For East Asia, especially China, Japan and Korea, while trying to make bilateral FTAs or trilateral FTA, efforts should also be made on facilitation aspect

  14. Second, the low utilizing rate of FTA preferences indicates that only tariff reduction is not enough, regional countries should still working together to eliminate the NTBs. • Unify the ROOs of different FTAs should be taken as a kind of trade facilitation effort, as the noodle bowl effect emerging and worsening with more and more FTA agreements signed recently

  15. Thank You!

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