In 2013, Ministry of Commerce of the People's Republic of China (hereinafter referred to as the "Ministry of Commerce"), under the leadership and arrangement of the CPC Central Committee and the State Council, continued to push forward the development of Free Trade Areas (FTAs) in accordance with the requirement of the 17th CPC National Congress to implement the FTA strategy and the requirement of the 18th CPC National Congress to accelerate the implementation of FTA strategy. Until now, China has established 18 FTAs under construction, for which 12 free trade agreements were signed, and six free trade agreements are under negotiations. In general, the FTAs established between China and relative countries and regions have promoted trade and economic cooperation, and have achieved mutually benefit and win-win results.

I. Important breakthroughs were made in establishment of FTA with Europe countries

(A) Negotiations on China-Iceland FTA were successfully completed, and agreements were signed.

Witnessed by Chinese Premier Li Keqiang and Icelandic Prime Minister Sigurdardottir, Mr. Gao Hucheng, Minister of Commerce of PRC, and Bragi Sveinsson, Iceland's Minister for Foreign Affairs and External Trade, on April 15, 2013, signed China-Iceland Free Trade Agreement on behalf of their own government in Beijing. It is the first Free Trade Agreement signed by and among China and Europe countries, covering such areas as trade in goods, trade in services and investment.

China-Iceland Free Trade Agreement is a high level agreement, according to which, nearly 96% products are subject to zero tariffs by tariff number, and nearly100% by trade volume. The establishment of China-Iceland Free Trade Agreement will not only provide institutional arrangements for economic and trade cooperation between two countries in order to promote the sustainable and healthy development of bilateral economic and trade relations, but also beef great exemplary significance for deepening China-EU economic and trade cooperation.

(B) Negotiations on China-Switzerland Free Trade Agreement were completed and agreements were signed. China and Switzerland announced to complete free trade agreement negotiations during the visit of Premier Li Keqiang to Switzerland in May 2013. Mr. Gao Hucheng, Minister of Commerce of PRC, and Johann Schneider Ammann, Head of Swiss Federal Department of Economic Affairs, signed China-Switzerland Free Trade Agreement on July 6, 2013 in Beijing. China-Switzerland Free Trade Agreement is the first free trade agreement signed by and between China and a country in continental Europe and a major western economy. China-Switzerland Free Trade Agreement is highly open, and has a wide coverage with many preferential policies. It’s an agreement of high standards and rich contents with mutually benefit and win-win results, and it is also one of the most comprehensive free trade agreement at the highest level that China has ever signed in recent years.

In terms of trade in goods, China and Switzerland agreed to grant to each other zero tariffs or low tariff treatment on most products. Switzerland would cut import tariffs on most imports from China as of the effective date of China-Switzerland Free Trade Agreement, involving about 99.99% of imports from China, of which zero tariff would be applied on 99.7% of imports immediately; China also made commitments on opening the marketsto a greater extent, and would greatly reduce tariffs on imports from Switzerland in certain transition period, involving 96.5% of imports from Switzerland, of which 84.2% would enjoy zero tariff ultimately. In trade in services, the two parties committed to speed up service trade liberalization and facilitation. China would expand opening up in such areas as aviation, environmental protection and securities, and Switzerland committed to facilitate business visa and work permit for Chinese business persons. In particular, such areas as environmental protection, intellectual property rights and government procurement, China had negotiated with Switzerland in accordance with the principle of seeking common ground and keep differences, and much consensus was reached, showing China’s positive and open attitude in making regional trade and economic rules, and laying a good foundation for negotiations on other high-level free trade areas.

II. New Progress Made in Free Trade Area Construction with Neighboring Countries

(I) Step up the Process of East Asia Economic Integration

East Asia, by virtue of rapid economic growth over recent years, has been a new economic drive of global economy growth and also one of the most dynamic places in terms of regional economic cooperation. China has pushed on China-ROK Free Trade Area (“Free Trade Area”, hereinafter referred to as “FTA”), China-Japan-ROK Free Trade Area and RCEP negotiations and strived to upgrade China-ASEAN Free Trade Area, whichhave played an important role in boosting the process of East Asia Economic Integration.

First, the mode negotiation of China-ROK FTA is done. Both sides made close contacts to step up relevant negotiations so as to implement the consensus “strengthen the efforts to push the negotiations into next phrase as soon as possible”reached by the countryleaders of both sides. China-ROK FTA has conducted eight rounds of negotiations in 2013. It has reached consensus on tariff reduction mode of trade in goods and come smoothly to the bids and offers phrase. Besides, both sides also exchanged the draft agreements in other areas, which paved a good way to finish negotiations as soon as possible.

Second, step up China-Japan-ROK FTA steadily. China, Japan and ROK did three rounds of negotiations in 2013, and 15 workgroups and expert groups were established to fully spread the work and hold in-depth talks on various areas. Three parties held discussions on the basic modes and framework and except some key differences, basically finished the negotiation on trade in goods at textual level.

Thirdly, start RCEP negotiations. Two rounds of negotiations on RCEP were done in 2013,and the responsibilities of negotiations were clarified and goods, services and investment workgroup and rules of origin, customs procedures and trade facilitation workgroup were set up. Besides, each side has carried on negotiations on issues regarding economic cooperation, intellectual property and competition policies. RCEP, consisting of 16 members often ASEAN countries, Australia, China, India, Japan, South Korea and New Zealand, covers half of the world’s population and one third of the total output value globally. Upon completion, it will be a FTA with the most population.

Fourthly, propose to launch upgraded China-ASEAN FTA negotiations. China-ASEAN FTA is the first and also the largest FTA that China has signed with other countries and it is also the first FTA that ASEAN, as a whole, signed with other countries. Premier Li Keqiang, when attended China-ASEAN Summit in Brunei on October 9, 2013, proposed to launch updated China-ASEAN FTA negotiations. At present, China has submitted the upgraded FTA draft to ASEAN and won positive feedbacks. The upgraded China-ASEAN FTA will further promote trade and investment liberalization and facilitation of both sides and realize common development.
　　
(II) Strengthen FTA construction with South Asian countries.

First, start the jointfeasibility study on China-Sri Lanka FTA. During his visit to China in May 2013, Mr. Mahinda Rajapaksa, Sri Lanka President reached a consensus on China-Sri Lanka FTA with China President Xi Jinping and Premier Li Keqiang. In August, two sides officially initiated the joint feasibility study on free trade agreement. In October, the first feasibility study workgroup conference was held and both sides exchanged views on working mechanism, reporting framework and main contents. Both sides agreed to finish the joint feasibility study by the end of 2013.
　
Second, the second meeting of tax reduction negotiations for China-Pakistan FTA Phrase II was held. China and Pakistan held in Beijing, the second meeting of tax reduction negotiations for China-Pakistan FTA Phrase II in November 2013, at which, two sides exchanged views on deepening China-Pakistan FTA.The second meeting had laid a good foundation for further improvement of bilateral economic and trade cooperation.
　　
In 2014, the Ministry of Commerce will constantly and actively step up FTA negotiations with relevant countries and regions, vigorously publicize the implemented free trade agreements by various means and positively carry on various workshops and trainings for the purpose ofhelping Chinese enterprises make full use of FTA preferential policies and promoting foreign trade and investment cooperation.

(All information published on this website is authentic in Chinese. English is provided for reference only.)