On October 28, under the witness of Prime Minister Li Keqiang and Prime Minister Anwar of Malaysia and other ASEAN leaders, Wang Wen ta, Minister of Commerce, and Zafarul, Minister of Investment, Trade and Industry of Malaysia, signed the Agreement on the Upgrade of the China-ASEAN Free Trade Area 3.0 Edition (hereinafter referred to as the Agreement) on behalf of China and ASEAN in Kuala Lumpur, Malaysia. The person in charge of the International Department of the Ministry of Commerce interpreted the relevant situation of the Agreement.

1. The Great Significance of the Agreement

China and ASEAN are each other's top trading partners and important investment partners. The signing of the Agreement is a landmark achievement in implementing the important consensus reached by President Xi Jinping and ASEAN leaders at the 30th Anniversary Summit of China-ASEAN Dialogue Relations, and is also an important measure to implement the decisions and arrangements of the Fourth Plenary Session of the 20th CPC Central Committee on expanding high-level opening-up and creating a new situation of win-win cooperation. In the context of the current rules-based international economic and trade system facing severe challenges, it is of great significance for the two sides to upgrade the China-ASEAN Free Trade Area to Version 3.0 by signing the Agreement.

First, it is to firmly support multilateralism and free trade with practical actions. At present, some countries have provoked a trade war by taking unilateral tariff measures, which has brought serious shocks to the international economic and trade system. The signing of the Agreement fully reflects the common commitment of China and ASEAN to multilateralism and free trade, which will inject more confidence and power into the economic growth of the region and even the world, and has an important demonstration significance for all countries to jointly resist protectionism and unilateralism and to join hands in addressing international economic and trade challenges.

Second, the signing of the Agreement marks a new milestone in deepening the integration of regional economies. The Agreement will expand the China-ASEAN free trade cooperation and the process of regional economic integration from the traditional field of trade and investment liberalization and facilitation to emerging fields such as digital, green, standards, and industrial and supply chains. On the one hand, the two sides will jointly promote the development of emerging industries such as digital and green, release greater potential, and on the other hand, strengthen standard and regulatory convergence, promote the interconnectivity of infrastructure and supply chains, and push the regional economy towards deeper integration and long-term stable growth.

Third, it will greatly promote the construction of the China-ASEAN community with a shared future. The signing of the Agreement will not only further strengthen China-ASEAN economic and trade cooperation and promote the development of regional economic integration, but also provide an important support for the two sides to jointly build a peaceful, prosperous, beautiful, and friendly home through the joint construction of an open, inclusive, and rules-based regional integration large market and a mutually beneficial, win-win, and resilient regional industrial and supply chain system.

II. Background and Progress of the Negotiations on the Protocol

(1) Background. The China-ASEAN Free Trade Area (CAFTA) is the first free trade area that China has negotiated and established with foreign countries. In 2002, the leaders of China and the ten ASEAN countries announced the initiation of the CAFTA negotiation process. Guided by the principle of mutual benefit and win-win cooperation, the two sides conducted friendly consultations and successively reached and implemented the agreements on goods trade, services trade, and investment. In 2010, the first version of the China-ASEAN Free Trade Area was fully established. In 2015, the two sides signed the upgrading protocol for the second version, which came into full effect in 2019.

With the continuous deepening of the China-ASEAN Free Trade Area, China has maintained its position as ASEAN's largest trading partner for 16 consecutive years, while ASEAN has become China's largest trading partner for 5 consecutive years. In 2024, the trade volume between the two sides reached $982.3 billion, a 17-fold increase from the initial year of the China-ASEAN Free Trade Area in 2002. The China-ASEAN Free Trade Area has played an important role in promoting the growth of bilateral trade.

(II) Negotiation Process. In November 2021, at the 30th Anniversary Summit of China-ASEAN Dialogue Relations, President Xi Jinping proposed to start the construction of the China-ASEAN Free Trade Area 3.0 version as soon as possible, which was actively responded by ASEAN leaders. In November 2022, the two sides officially launched the upgraded negotiations for the 3.0 version. After nearly two years, 9 rounds of formal negotiations and more than 120 Working Group meetings, at the 27th China-ASEAN Leaders Meeting in October 2024, Premier Li Qiang and the leaders of the ten ASEAN countries jointly issued a joint statement, announcing the substantive completion of the negotiations for the China-ASEAN Free Trade Area 3.0 version.

Afterwards, the two sides intensified the follow-up work such as technical consultations on individual remaining clauses and legal review of the text of the protocols, in accordance with the instructions of the leaders. After four special meetings of the commission and multiple工作组 consultations, the two sides completed the negotiations of the 3.0 version in full. On October 28, 2025, the two sides officially signed the upgrade protocol of the 3.0 version during the 28th China-ASEAN Leaders Meeting held in Kuala Lumpur, Malaysia.

Three, the main features of the Protocol

The Agreement aims to promote open, mutually beneficial, and inclusive cooperation, adapt to the new trends in the development of international economic and trade, and build on the China-ASEAN Free Trade Area Version 1.0 and Version 2.0 and the Regional Comprehensive Economic Partnership Agreement (RCEP). It actively adopts international high-standard economic and trade rules, explores the formulation of rules in emerging fields that are in line with the characteristics and needs of regional economic and trade cooperation, and helps to create a large market and supply chain system in the region and promote high-quality development. It has three prominent features:

The first is to further expand emerging fields. The 3.0 version adds five fields: digital economy, green economy, supply chain connectivity, competition and consumer protection, and small, medium and micro enterprises, reflecting the common will and actions of the two sides to actively lead the formulation of international rules and promote cooperation in emerging fields. In particular, the inclusion of supply chain connectivity, green economy and consumer protection has become a new breakthrough in China-ASEAN free trade practice.

The second is to comprehensively improve the level of opening-up. On the basis that the 3.0 version has reached a high level of opening-up in goods, services, and investment market access, it focuses on the rules and cooperation fields, and makes the highest level of commitments for China and ASEAN's respective free trade practices. In particular, it establishes a systematic cooperation framework and mechanism for traditional fields such as trade facilitation and emerging fields such as digital, green, and supply chain, and clarifies specific cooperation fields and key measures, which will inject new impetus into regional economic growth.

The third is to promote inclusive development. The 3.0 Edition, while actively creating new growth engines for regional economic growth, also incorporates competition and consumer protection, small and medium-sized enterprises, and economic and technical cooperation, promoting inclusive economic growth in the region 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 performance capacity of the least developed countries, so that Chinese and ASEAN enterprises and people can benefit from regional economic growth.

IV. Main Content of the Agreement

The main upgraded content of the Agreement, besides legal and institutional chapters, covers 9 major areas, including customs procedures and trade facilitation, standards and technical regulations and conformity assessment procedures, sanitary and phytosanitary measures, economic and technical cooperation, etc., which have been previously covered areas, and also includes emerging areas with great cooperation potential between the two sides, such as the digital economy, green economy, supply chain connectivity, competition and consumer protection, small, medium and micro enterprises, etc. The main content is as follows:

(1) In the field of the digital economy, the two sides have established a rules system and cooperation arrangements at the highest level in their respective treaty practices, creating a good policy environment for promoting the development of the regional digital economy. The two sides agree to temporarily exempt customs duties on electronic transmission, ensure the cross-border flow of data, strengthen the protection of personal information and explore ways to promote the compatibility and mutual recognition of protection levels, promote the recognition of electronic certification and electronic signatures, and strengthen regulatory cooperation in network security, anti-phishing, unsolicited commercial electronic information and other areas. The two sides will carry out connectivity cooperation in the fields of logistics, digital infrastructure and other "hard connectivity" areas, while strengthening cooperation in the areas of single window, electronic invoices, electronic payments, electronic bills of lading and other "soft connectivity" areas, improving system compatibility and reducing business costs. In addition, the two sides will deepen cooperation in emerging sub-fields of common concern, such as digital identity, fintech, artificial intelligence and digital trade standards.

(II) In the field of green economy, the two sides have established a comprehensive cooperation framework under the Free Trade Zone, guided by the principles and goals of the Global Development Initiative. The two sides have made a clear definition of green economy, new energy, clean energy, sustainable finance, green skills, etc., and committed not to use environmental standards as a means of trade protectionism, to strive to eliminate trade barriers related to environmental products and services, and to commit to the mutual promotion and common development of environment and trade. The two sides have identified eight priority cooperation areas, including green trade, green investment, circular economy, sustainable finance, green technology, green standards, sustainable energy, and the coordinated development of green and digitalization, covering the whole chain of R&D, financing, production, consumption, and recycling, which will provide an important support for building a green engine of regional economy and achieving high-quality development.

(III) In the area of supply chain connectivity, the two sides have for the first time included a separate chapter on supply chain cooperation in the FTA, and have made high-level commitments together. The two sides will work together to promote the free flow of key products and services, further improve the level of trade facilitation using digital technology, and enhance the resilience and connectivity of regional supply chains. Strengthening infrastructure connectivity, encouraging the resolution of logistics and transportation bottlenecks through the development of multimodal transport, the promotion of sustainable port development, and the improvement of port productivity and efficiency, to facilitate the circulation of products and services of the two sides. Improve the efficiency of resource allocation and risk early warning capabilities in regional supply chains, and work together to address supply chain disruptions and other issues, to ensure the stable operation of regional supply chains in emergencies, and to jointly build a safe, stable, unimpeded and efficient regional supply chain system.

(iv) In the field of standards and technical regulations and related conformity assessment procedures, the two sides for the first time clearly stated that they could consider referring to each other's standards when formulating their own standards, encouraged mutual recognition of each other's conformity assessment results, jointly formulated conformity assessment procedures, and promoted standard cooperation in new energy vehicles, electronics and electrical appliances and other fields as a priority. It is allowed that enterprises of the two sides participate in the formulation of standards, technical regulations and conformity assessment procedures according to law, and are given national treatment. Relying on the China-ASEAN Standardization Cooperation Forum initiated by China, the two sides will further strengthen the institutional construction of the standard cooperation mechanism. This will provide a system guarantee for promoting the docking of standards between the two sides, facilitate the better expansion of the regional market for enterprises of the two sides, and promote the construction of a regional integrated large market.

(5) In the field of sanitary and phytosanitary measures, the two sides will further strengthen information exchange and technical cooperation, deepen the understanding of each other's agricultural and food-related laws and regulations, and will post relevant inspection and quarantine notices and other information on their respective official websites in electronic form, and put forward higher requirements for legal and policy transparency. This will facilitate enterprises to understand the inspection and quarantine-related policies and measures of the importing party in a timely manner, reduce uncertainties and compliance costs in the import and export of goods. The two sides will also set up a special committee on sanitary and phytosanitary measures, further strengthen the construction of the consultation mechanism, communicate and solve specific problems arising in bilateral trade in a timely manner, reduce the impact of non-tariff measures, and improve the level of trade facilitation.

(6) In the field of customs procedures and trade facilitation, the two sides will further improve the level of trade facilitation by using digital technology. The two sides will strengthen the cooperation in the "Smart Customs" and improve the level of intelligentization and digitization of customs supervision, optimize the regulations on cargo release, express delivery, pre-inspection, etc., simplify customs clearance procedures, and reduce customs clearance time. The Agreement also incorporates the relevant provisions of the "Single Window for International Trade", so that enterprises can declare and track the customs clearance process through a "one-stop" platform. This will further reduce the cost of enterprises, improve the efficiency of customs clearance, enhance the transparency of the customs clearance process, optimize the business environment for enterprises, and is conducive to strengthening the customs cooperation between the two sides and facilitating the effective supervision of ports.

(Seven) In the field of competition and consumer protection, the two sides have established a systematic framework for the comprehensive coverage of competition rules for enterprises and consumers in the free trade agreement for the first time. The establishment of a mechanism for anti-monopoly cooperation and cross-border law enforcement collaboration between China and ASEAN countries, further strengthening the cooperation in competition legislation and law enforcement. Special provisions are made for online consumption, overseas tourism consumption, consumer fraud, etc., enriching consumer rights, improving the responsibility of operators, and strengthening consumer protection. This is conducive to better protecting the legitimate rights and interests of enterprises, enhancing consumer sense of acquisition, creating a fair and orderly regional market environment, and promoting the healthy and high-quality development of economic and trade exchanges within the region.

(8) In the field of MSMEs, the two sides further enriched the targeted measures to support the development of MSMEs, and enhanced the ability and opportunities for MSMEs to participate in international trade. The two sides will further strengthen information sharing and exchanges, and provide MSMEs with trade and investment related laws and regulations information and related business information that can be publicly queried. Promote the use of e-commerce by MSMEs, enhance the awareness, understanding and effective use of intellectual property rights by MSMEs, help MSMEs improve their sustainable development capacity, and better create and seize the development opportunities in emerging fields. Support the digital transformation of MSMEs and innovative start-ups, provide financing information to MSMEs at different growth stages, strengthen the special, refined and new capabilities of MSMEs, and improve their competitiveness.

(9) In the field of economic and technical cooperation, the two sides have established a comprehensive cooperation framework and institutional arrangements to promote regional inclusive development. The two sides will provide technical assistance to support capacity building in various fields, help LDCs enhance performance, ensure high-quality implementation of the Agreement, and strengthen experience sharing and in-depth tapping of more cooperation potential. The two sides will establish a working group on economic and technical cooperation to supervise the implementation of this field, report to the Joint Committee, and put forward specific cooperation suggestions to provide institutional guarantee for the implementation of economic and technical cooperation.

5. Implementation of the Agreement into force

After the signing of the Agreement, both sides will perform their respective domestic ratification procedures to promote the Agreement to enter into force as soon as possible. The text of the Agreement upon signing will be published on the China Free Trade Agreement Service Network (https://fta.mofcom.gov.cn) for public access and reference.

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