ASEAN has concluded a number of free trade agreements with other Asian countries that are radically changing the global public procurement and production landscape. It has, for example, a contract with China that has effectively reduced tariff reduction to nearly 8,000 product categories, or 90% of imported goods, to zero. These favourable conditions came into force in China and in ASEAN members, including Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand. Negotiations are also under way with Myanmar (Burma) for an investment protection agreement. Recognizing this development and recognizing the economic potential for closer ties, both sides recognized opportunities to deepen trade and investment relations and agreed to negotiate a framework agreement to pave the way for the creation of an ASEAN-India Free Trade Area (FTA).  The manufacturing trend is therefore to continue to develop products for this huge consumer market, but to place the production capacity needed for this purpose on a cheaper site. The ASEAN Free Trade Agreement with China allows regional companies and MNN in Asia to do so. This is a trend that is already underway – as we are seeing with Foxconn, the manufacturer of many components that end up in Apple products, who want to relocate their 1.3 million workers from China and Indonesia, where wages are lower and where there is a large and available workforce. This is a solid strategy that is increasingly being adopted by many manufacturers. On 3 May, at the third session of the Preparatory Committee of the Conference of the Parties to review the Treaty on the Non-Proliferation of Nuclear Weapons in 2005, ASEAN Member States presented a discussion paper on the status of the nuclear-weapon-free zone in Southeast Asia.
The document discusses the establishment of THE SEANWFZ as a means of “contributing to general and complete nuclear disarmament” and the establishment of the SEANWFZ Commission and its Executive Committee to respect the treaty. It stresses that, in order to be effective and operational, nuclear-weapon States must adhere to the Protocol to the Treaty and urges them to do so as soon as possible. In addition, it notes that ASEAN is consulting with the five nuclear-weapon States on this issue, but that, so far, only China has reached an agreement with ASEAN on the protocol. An Introduction to Tax Treaties Across Asia In this issue of Asia Briefing Magazine, we examine the different types of trade and tax agreements that exist between Asian nations. These include bilateral investment agreements, bilateral double taxation agreements and free trade agreements that cover all companies directly active in Asia. Ministers also addressed the issue of cross-border crime and welcomed the agreement between ASEAN and China on non-traditional security issues and stressed the need for cooperation in the fight against terrorism, particularly within the framework of the ASEAN-U.S. Counter-Terrorism Work Plan and other related agreements.