The head of the International Department of the Ministry of Commerce interprets the China ASEAN Free Trade Area 3.0 Upgrade Protocol
On October 28th, witnessed by Prime Minister Li Qiang and Malaysian Prime Minister Anwar Ibrahim and other ASEAN leaders, Minister of Commerce Wang Wentao and Malaysian Minister of Investment, Trade and Industry Zavlu signed the China ASEAN Free Trade Area 3.0 Upgrade Protocol (hereinafter referred to as the Protocol) in Kuala Lumpur, Malaysia on behalf of China and ASEAN respectively. The head of the International Department of the Ministry of Commerce interpreted the relevant situation of the protocol.
1、 The Importance of Signing the Protocol
China and ASEAN are each other's largest trading partners and important investment partners. Against the backdrop of severe challenges facing the rule-based international economic and trade system, the signing of a protocol by both sides to upgrade the China ASEAN Free Trade Area to version 3.0 is of great significance.
One is to firmly support multilateralism and free trade through practical actions. Currently, some countries are adopting unilateral tariff measures to provoke trade wars, which have brought serious impacts to the international economic and trade system. The signing of the protocol fully reflects the joint commitment of China and ASEAN to firmly support multilateralism and free trade, injecting more confidence and momentum into regional and even global economic growth. It has important demonstration significance for countries to jointly resist protectionism and unilateralism, and work together to address international economic and trade challenges.
The second is to establish new milestones for promoting deep integration of regional economy. The signing of the protocol marks the expansion of China ASEAN free trade cooperation and regional economic integration from traditional trade and investment liberalization and facilitation to emerging fields such as digital, green, standards, and supply chains. On the one hand, both sides will jointly promote the development of emerging industries such as digital and green, unleashing greater potential. On the other hand, they will strengthen the integration of standards and regulations, promote the interconnection of infrastructure and supply chains, and push the regional economy towards deeper integration and long-term stable growth goals.
Thirdly, it effectively promotes the construction of a China ASEAN community with a shared future. The signing of the protocol will not only further strengthen economic and trade cooperation between China and ASEAN, promote regional economic integration and development, but also provide important support for both sides to jointly build an open, inclusive, rule-based regional integration market, and a mutually beneficial and resilient regional supply chain system, in order to jointly build a peaceful, peaceful, prosperous, beautiful, and friendly homeland.
2、 Background and Process of Protocol Negotiations
（1） Regarding the background. The China ASEAN Free Trade Area is the first free trade area established and negotiated by both sides. In 2002, the leaders of China and the ten ASEAN countries announced the start of the process of building a free trade zone. Both sides uphold the principle of mutual benefit and win-win, and through friendly consultations, have successively reached and implemented agreements on goods trade, services trade, and investment. In 2010, the 1.0 version of the China ASEAN Free Trade Area was fully established. In 2015, both parties signed the 2.0 version upgrade protocol, which came into full effect and implementation in 2019.
With the continuous deepening of the construction of the China ASEAN Free Trade Area, China has maintained its position as the largest trading partner of ASEAN for 16 consecutive years, and ASEAN has become China's largest trading partner for 5 consecutive years. The trade volume between the two sides will reach 982.3 billion US dollars in 2024, which is 17 times higher than the initial construction of the China ASEAN Free Trade Area in 2002. The China ASEAN Free Trade Area has played an important role in promoting bilateral trade growth.
（2） Negotiation process. In November 2022, both parties officially launched negotiations for upgrading to version 3.0. After nearly two years, 9 rounds of formal negotiations, and over 120 working group meetings, Premier Li Qiang and the leaders of the ten ASEAN countries jointly issued a joint statement at the 27th China ASEAN Leaders' Meeting in October 2024, announcing the substantial end of the China ASEAN Free Trade Area 3.0 negotiations.
Afterwards, both sides intensified the follow-up work such as technical consultations on individual remaining clauses and legal review of protocol texts in accordance with the instructions of the leaders. After four rounds of special joint committee and multiple rounds of working group consultations, both parties will fully complete the 3.0 version negotiations by May 2025. On October 28, 2025, during the 28th China ASEAN Leaders' Meeting held in Kuala Lumpur, Malaysia, the two sides officially signed the 3.0 version of the Upgrade Protocol.
3、 Prominent features of the protocol
The protocol aims to promote open, mutually beneficial, and inclusive cooperation, adapt to the new trend of international economic and trade development, actively absorb international high standard economic and trade rules on the basis of the China ASEAN Free Trade Area 1.0 and 2.0 versions and the Regional Comprehensive Economic Partnership Agreement (RCEP), explore and formulate rules in emerging fields that meet the characteristics and needs of regional economic and trade cooperation, help build a regional integrated large market and supply chain system, and promote high-quality development. There are three prominent characteristics:
One is to deeply expand into emerging fields. The 3.0 version adds five new areas: digital economy, green economy, supply chain interconnectivity, competition and consumer protection, and small and medium-sized enterprises, reflecting the joint willingness and actions of both sides to actively lead international rule making and promote cooperation in emerging fields. Especially in the fields of supply chain interconnection, green economy, and consumer protection, it has become a new breakthrough in the practice of China ASEAN free trade.
The second is to comprehensively enhance the level of openness. On the basis of achieving a high level of openness in the access to goods, services, and investment markets, the 3.0 version focuses on rules and cooperation areas, and has made the highest level of commitments for China and ASEAN's respective free trade practices. In particular, a systematic cooperation framework and institutionalized arrangements have been established for traditional fields such as trade facilitation at the border, as well as emerging fields such as digital, green, and supply chain after the border. Specific cooperation areas and key measures have been clarified, injecting new momentum into regional economic growth.
The third is to focus on promoting inclusive development. The 3.0 version actively builds a new engine for regional economic growth, while also incorporating areas such as competition and consumer protection, small and medium-sized enterprises, and economic and technological cooperation. By ensuring fair competition for enterprises, safeguarding the legitimate rights and interests of consumers, supporting the development of small and medium-sized enterprises, and enhancing the compliance capacity of the least developed countries, it promotes inclusive development of the regional economy, enabling enterprises and people from China and ASEAN countries to benefit from regional economic growth.
4、 Main content of the protocol
In addition to the legal and institutional chapters, the main upgraded content of the protocol covers nine major areas, including customs procedures and trade facilitation, standards and technical regulations and conformity assessment procedures, sanitary and phytosanitary measures, economic and technological cooperation and other previously existing areas, as well as emerging areas with great potential for cooperation between the two sides such as digital economy, green economy, supply chain interconnection, competition and consumer protection, and small and medium-sized enterprises. The main content is as follows:
（1） In the field of digital economy, both sides have established the highest level of rule system and cooperation arrangements in their respective contracting practices, creating a favorable policy environment for promoting regional digital economy development. Both parties agree to temporarily waive customs duties on electronic transmission, ensure cross-border data flow, strengthen personal information protection, explore and promote compatibility and mutual recognition of protection levels, promote recognition of electronic authentication and electronic signatures, and strengthen regulatory cooperation in network security, anti fraud, and non invitation commercial electronic information. Both parties will carry out interconnectivity cooperation in the fields of logistics, digital infrastructure and other "hard connectivity" areas, while strengthening cooperation in "soft connectivity" such as single window, electronic invoice, electronic payment, electronic bill of lading, etc., to improve system compatibility and reduce enterprise costs. In addition, both sides will deepen cooperation in emerging sub sectors of common concern such as digital identity, financial technology, artificial intelligence, and digital trade standards.
（2） In the field of green economy, both sides have established a comprehensive cooperation framework under the free trade zone, guided by the principles of global development initiatives. For the first time, both sides have made clear definitions of green economy, new energy, clean energy, sustainable finance, green skills, etc. They have committed to not using environmental standards as a disguised means of trade protectionism, striving to eliminate trade barriers related to environmental products and services, and committed to the mutual promotion and common development of environment and trade. Both sides have established eight priority areas of cooperation for coordinated development of green trade, green investment, circular economy, sustainable finance, green technology, green standards, sustainable energy, and digital greening. These areas cover the entire chain of research and development, financing, production, consumption, and recycling, and will provide important support for building a regional economic green engine and achieving high-quality development.
（3） In the field of supply chain interconnection, both parties have included a separate chapter on supply chain cooperation in the free trade agreement for the first time and jointly made high-level commitments. Both sides will jointly promote the free flow of key products and services, further enhance trade facilitation through digital technology, and strengthen the resilience and connectivity of regional supply chains. Strengthen infrastructure connectivity, encourage the use of multimodal transport, promote sustainable port development, enhance port productivity and efficiency, and help solve logistics and transportation bottlenecks, facilitating the circulation of products and services between both parties. Improve the efficiency of regional supply chain resource allocation and risk warning capabilities, collaborate to address supply chain interruptions and other issues, ensure stable operation of regional supply chains in emergency situations, and jointly build a safe, stable, smooth, and efficient regional supply chain system.
（4） In the field of standards, technical regulations, and conformity assessment procedures, both parties have for the first time explicitly stated that they may consider referring to each other's standards when developing their own standards, encourage recognition of each other's conformity assessment results, jointly develop conformity assessment procedures, and prioritize promoting standard cooperation in areas such as new energy vehicles and electronic appliances. Allow each other's enterprises to participate in the formulation of standards, technical regulations, and qualification assessment procedures in accordance with the law, and provide them with national treatment. Based on the China ASEAN Standardization Cooperation Forum initiated by the Chinese side, further strengthen the institutionalization of standard cooperation between the two sides. This will establish institutional guarantees to promote the alignment of standards between the two sides, provide convenience for both companies to better expand regional markets, and promote the construction of a large market for regional integration.
（5） In the field of sanitary and phytosanitary measures, both sides will further strengthen information exchange and technical cooperation, deepen understanding of each other's agricultural and food related laws and regulations, and publish inspection and quarantine related notices on their respective official websites through electronic means, putting forward higher requirements for the transparency of laws, regulations, and policies. This is beneficial for enterprises to timely understand the import inspection and quarantine related policies and measures, reduce the uncertainty and compliance costs of import and export goods clearance. Both sides will also establish a sub committee on sanitary and phytosanitary measures to further strengthen the construction of consultation mechanisms, timely communicate and solve specific problems in bilateral trade, reduce the impact of non-tariff measures, and improve the level of trade facilitation.
（6） In the fields of customs procedures and trade facilitation, both sides will use digital technology to further improve the level of trade facilitation. Both sides will jointly strengthen cooperation in "smart customs", enhance the intelligence and digitalization level of customs supervision, optimize regulations on cargo release, express delivery, pre shipment inspection, simplify customs clearance procedures, and reduce clearance time. The protocol also includes provisions related to the "single window" for international trade, allowing enterprises to declare and track customs clearance processes through a "one-stop" platform. This will further reduce enterprise costs, improve customs clearance efficiency, enhance the transparency of customs clearance processes, optimize the business environment for enterprises, and is conducive to strengthening cooperation between customs of both sides, facilitating effective supervision at ports.
（7） In the field of competition and consumer protection, both sides have established a systematic framework of free trade zone competition rules that comprehensively cover both enterprises and consumers in the free trade agreement for the first time. Establish a mechanism for anti-monopoly exchange, cooperation, and cross-border law enforcement collaboration between China and ASEAN countries, and further strengthen competition legislation and law enforcement cooperation. Special regulations have been made for online consumption, outbound tourism consumption, consumer fraud, etc., enriching consumer rights, improving operator responsibilities, and increasing consumer protection efforts. This is conducive to better safeguarding the legitimate rights and interests of enterprises, enhancing consumers' sense of gain, creating a fair and orderly regional market environment, and promoting healthy and high-quality development of economic and trade exchanges within the region.
（8） In the field of small and medium-sized enterprises, both sides have further enriched targeted measures to support the development of small and medium-sized enterprises, enhancing their ability and opportunities to participate in international trade. Both parties will further strengthen information sharing and exchange, providing publicly accessible trade and investment laws and regulations, as well as relevant business information for small and medium-sized enterprises. Promote the use of e-commerce by small and medium-sized enterprises, enhance their awareness, understanding, and effective utilization of intellectual property rights, help them improve their sustainable development capabilities, and better create and seize development opportunities in emerging fields. Support the digital transformation of small and medium-sized enterprises and innovative startups, provide financing information to promote their growth at different stages, strengthen their specialized and innovative capabilities, and enhance their competitiveness.
（9） In the field of economic and technological cooperation, both sides have established a comprehensive cooperation framework and institutional arrangements, committed to promoting inclusive regional development. Both sides will provide technical assistance to support capacity building in various fields, help the least developed countries enhance their compliance capabilities, ensure high-quality implementation of the agreement, and strengthen experience sharing to explore more potential for cooperation. Both parties will supervise the implementation of this field through the Economic and Technological Cooperation Working Group, report to the Joint Committee, and propose specific cooperation suggestions to provide institutionalized guarantees for the implementation of economic and technological cooperation.
5、 Implementation of the Protocol
After the signing of the protocol, both parties will follow their respective domestic approval procedures to promote the early entry into force and implementation of the protocol. We will be on the China Free Trade Zone Service Network（ http://fta.mofcom.gov.cn ）Publish the signed text of the protocol for public inquiry and reference.