Question

The member countries of ASEAN have committed to forming a true free trade area.

What are the goals for this AFTA?

How much progress has been made?

Why has progress not been faster?

Are there important issues that seem to thwart or limit the effort?

What will happen over the next five years or so?

Answer 1

A free-trade area is the region encompassing a trade bloc whose member countries have signed a free trade agreement (FTA). Such agreements involve cooperation between at least two countries to reduce trade barriers, import quotas and tariffs, and to increase trade of goods and services with each other. If natural persons are also free to move between the countries, in addition to a free-trade agreement, it would also be considered an open border. It can be considered the second stage of economic integration.

The ASEAN Free Trade Area (AFTA) is a trade bloc agreement by the Association of Southeast Asian Nations supporting local trade and manufacturing in all ASEAN countries, and facilitating economic integration with regional and international allies.

The AFTA agreement was signed on 28 January 1992 in Singapore. When the AFTA agreement was originally signed, ASEAN had six members, namely, Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand. Vietnam joined in 1995, Laos and Myanmar in 1997 and Cambodia in 1999. AFTA now comprises the ten countries of ASEAN. All the four latecomers were required to sign the AFTA agreement to join ASEAN, but were given longer time frames in which to meet AFTA's tariff reduction obligations.

The primary goals of AFTA seek to:

• Increase ASEAN's competitive edge as a production base in the world market through the elimination, within ASEAN, of tariffs and non-tariff barriers; and
• Attract more foreign direct investment to ASEAN

HOW MUCH PROGRESS HAVE BEEN MADE:

1. ASEAN Member Countries have made significant progress in the lowering of intra-regional tariffs through the Common Effective Preferential Tariff (CEPT) Scheme for AFTA. More than 99 percent of the products in the CEPT Inclusion List (IL) of ASEAN-6, comprising Brunei Darussalam, Indonesia, Malaysia, the Philippines, Singapore and Thailand, have been brought down to the 0-5 percent tariff range.

2.AFTA is emerging as a new FTA giant

why the progress has been not faster

1.there is less multilateral meeting of member countries of asean which is resulted in lower progress since its conception

2. the member countries of ASEAN are manyatimes not agree on a particular rule simultaneously, for ex- INDIA decided to not fully join AFTA

3.THE AFTA agreement are biased in nature, since it benefit a nation while other members bears cost

4.there are also political tension among the member countries

important issue that seem to thwarft or limit the effort

mainly the political tension among the nation is causing the limit to the effort put forward, for ex china"s ambitios RCEP programmed had lead to the remaining out of important countries like INDIA

WHAT WILL HAPPEN IN NEXT FIVE YEARS

seeing the present scenario it can be said that ASEAN may Marge among  the world largest FTA there is also the region Indo pacific which is gaining importance day by day an dlal the member countries are growing at relatively much faster speed hance in the next year sit is certainly going to expand its market.