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NAY PYI TAW, Nov. 13 -- The ASEAN-China Free Trade Area (ACFTA) is a free trade area between the 10 Association of Southeast Asian Nations member states and China.

The initial framework agreement, signed on Nov. 4, 2002 in Phnom Penh, Cambodia, was designed to establish a free trade area among the 11 nations by 2010. The free trade area came into effect on Jan. 1, 2010.

The ACFTA is the largest free trade area in the world in terms of population and third largest in terms of nominal GDP, trailing the European Economic Area and North American Free Trade Area.

Under the free trade agreement, tariffs will be reduced to zero on 7,881 product categories, or 90 percent of imported goods. This reduction already took effect in China and the six original members of ASEAN: Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand. The remaining four countries will follow suit in 2015.

The average tariff rate on Chinese goods sold in ASEAN countries decreased from 12.8 percent to 0.6 percent starting Jan. 1, 2010. Meanwhile, the average tariff rate on ASEAN goods sold in China decreased from 9.8 percent to 0.1 percent.

Last year, Chinese Premier Li Keqiang called for an "upgraded version" of the ACFTA, pledging economic and trade cooperation of "a greater scope and higher quality."

China and ASEAN could have discussions about further lowering tariffs, cutting non-tariff measures, holding talks on a new round of service trade commitments, and promoting openness in the area of investment.

China is also willing to join hands with ASEAN to advance talks of Regional Comprehensive Economic Partnership (RCEP).

The Chinese premier also called for further cooperation in areas of transportation, telecommunications and energy, as well as to enhance economic and financial cooperation between China and ASEAN.

China-ASEAN economic cooperation has never been more dynamic and fruitful, as China has become ASEAN's largest trading partner and ASEAN has emerged as China's third biggest trading partner with bilateral trade growing by more than 20 percent annually on average and surging by 37 times over the past two decades.

The two sides are targeting their bilateral trade at 500 billion U.S. dollars by 2015 and one trillion dollars by 2020.