ASEAN leaders last month signed adeal on trade and services with China,bringing them a step closer to establishingthe world’s biggest free trade area, Xinhua Agency reported.

The agreement, which covers telecommunications,transport, tourismand other services, will take effect fromJuly, according to the agreement releasedin Cebu (central Philippines).

The spokesperson said under the agreement, China and ASEAN countries would further open the services sector in order to provide improved market access for each other. China and ASEAN aim to have the foundation of a full free-trade area laid by 2010, with China, Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand hoping to drop tariffs on most products by then.

China and other ASEAN members such as Cambodia, Laos, Myanmar and Vietnam have set their target for that goal five years later and are slated to complete the building of the free trade area in 2015.

This pact is also expected to boost economic growth and foreign investment in the ASEAN countries particularly in construction, engineering, energy, travel, transport, education, telecommunications, culture and sports.

Bilateral trade in 2006 reached US$160.8 billion, an increase of 23.4 percent over the previous year.