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Contribution to Book
The China–ASEAN Tariff Acceleration Clause
China, India and the International Economic Order (2009)
  • Chin Leng Lim, University of Hong Kong
India–China trade in the near future is likely to take place against the backdrop of an emerging, uncertain network of Asian Free Trade Agree- ments (FTAs). This chapter takes a look at the contemporary history of regional trade negotiations. It traces the influence of a third party; namely, ASEAN’s efforts to build links to the rest of Asia through a complex network of FTAs. That influence suggests a disturbing possibility – the exportation of a tariff acceleration device developed during the ASEAN–China negotiations to the rest of Asia. The ASEAN– China FTA contains a tariff acceleration clause and similar devices which would allow separate bilateral deals between China and the individual ASEAN nations to be cut beneath the larger umbrella of the China– ASEAN FTA. These devices are significant because ASEAN has become something of a common medium for India and the ‘Plus 3’ nations to join in the build-up of a regional network of Asia-wide FTAs. In the near to medium term, the Plus 3 are unlikely to have bilateral agreements between themselves. There is no evidence that China, Japan and South Korea will be aiming for FTAs between themselves anytime soon. Instead, they appear content to trade with each other on preferential terms through their individual FTAs with ASEAN and the ASEAN nations instead. If these become as heavily bilateralized as the China– ASEAN FTA, the result could be an ‘MFN black hole’ in intra-Asian trade liberalization. This chapter therefore focuses not on the issue of China–India trade itself, but on the structure of China–ASEAN trade liberalization and the potential entry of India into an emerging network of ASEAN plus 3 FTAs (i.e. ASEAN’s FTA negotiations with China, Japan andSouth Korea). For the sake of completeness, Section II of this chapter will first describe ASEAN’s attempt to build an ASEAN Economic Community (AEC) within itself. That treatment is merely prefatory to Section III which deals with ASEAN’s current attempt to locate itself at the centre of a network of FTAs with India to the West, and China, Japan and Korea to the East. Section IV explains how, and why this could lead to the problem mentioned at the outset – MFN erosion in the emergence of a complex network of FTAs governing Asian trade liberalization. A central assumption which this chapter calls into question is the idea that broader regional FTAs are necessarily more beneficial than a ‘spaghetti’, or ‘Asian noodle bowl’, of overlapping, bilateral FTAs. The principal argument in this chapter is that trade regionalism in Asia could still amount to no more than ‘bilateralism multiplied’.
  • ASEAN,
  • China,
  • regional trade negotiation,
  • trade liberalization,
  • FTAs,
  • tariff acceleration clause
Publication Date
M. Sornarajah & J. Wang
Cambridge University Press
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Link to the Cambridge website for this book:
Citation Information
Chin Leng Lim. "The China–ASEAN Tariff Acceleration Clause" China, India and the International Economic Order (2009)
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