Though time has not come for the launching of free trade area (FTA) between China and ASEAN nations, businesses there have begun to enjoy benefits from tariff reduction.

Statistics with the China's Ministry of Commerce show that in 2004, ASEAN nations gained 600 million yuan (72.55 million US dollars) from zero tariff policies on fruits and vegetables between China and ASEAN.

"I didn't expect the FTA to develop so fast that Thai farmers have gained great benefits from its process by selling fruits and vegetables to China," said Thanet Amornphatchara, assistant vice president of Thailand-China Business Center.

In a bid to press forward the process of FTA, China and ASEAN have realized zero tariff over fruits and vegetables in bilateral trade since October 1, 2003, several years ahead of the establishment of the FTA.

Statistics with the Ministry of Commerce (MOC) show that China's imports of fruits and vegetables from Thailand increased 94 percent last year over 2003 and its exports of fruits and vegetables to Thailand rose 75 percent. Bilateral trade in fruits and vegetables rose 91 percent to 530 million US dollars last year.

"Zero tariff policy has opened the door to the Chinese market for Thai farmers with their fruits and increased their income," said Amornphatchara, who is responsible for organizing Thai farmers to exhibit and sell their fruits and vegetables to Kunming.

On January 1 last year, China and ASEAN carried out the early harvest plan which allows tariff reduction of 570 categories of products.

With the improvement of trade conditions following tariff reduction, the trade volume between China and ASEAN covered by the Early Harvest Plan rose 39.8 percent to 1.97 billion US dollars last year, with China's imports to and exports from ASEAN rising 46.6 percent and 31.2 percent respectively.

"The early harvest plan is aimed to allow Chinese and ASEAN companies to enjoy the benefits of FTA before its launching, and now the goal has been realized," said Pan Jin'e, researcher with the China Academy of Social Sciences.

According to the time schedule, China will launch the FTA with old and newly joined ASEAN nations respectively in 2010 and 2015, which will be China's first free trade zone with other nations.

Last year, the ASEAN nations exported products covered in the Early Harvest Plan worth 1.15 billion US dollars to China, up 46.6 percent over the previous year, said sources with the MOC.

Statistics with the Vietnamese fruit association show that 80 percent of Vietnamese fresh fruits are exported to China, accounting for 50 percent of fruit export income in Vietnam.

Experts estimated that with the implementation of Early Harvest Plan, Vietnam would see a double rise of sea products exports to China with the trade volume to reach 400 million US dollars every year.

Starting from June 1, trade between China and ASEAN would enter a full process of tariff reduction. Following the agreement on comprehensive economic cooperation between China and ASEAN, 7,000 kinds of goods would enjoy tariff cut-offs from then on. Within five years, most of their tariffs would be reduced to zero.

The news made Amornphatchara more optimistic with his business: " We expect a bigger rise in our business and more gains for Thai farmers from the favorable policies."

Source: Xinhua