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Free Trade Agreements (FTAs) with Asia

 

 

AFTA Asean Free Trade Area
BENEFITS FROM ASEAN FREE TRADE AREA (AFTA) TARIFF CUTS in 2010

Under AFTA, six members of the Association of Southeast Asian Nations (ASEAN) cut tariffs on nearly 8,000 items. The six countries include Malaysia, Indonesia, Singapore, the Philippines, Brunei and Thailand. Four of the less developed ASEAN nations including Cambodia, Laos, Burma and Vietnam will have a further period to phase in the tariff cuts.

FREE TRADE AGREEMENT AMONG ASEAN COUNTRIES

The recent Free Trade Agreement (FTA) between ASEAN Countries is a positive message coming from Asian governments that they still see considerable value and importance of free trade and capital flows despite the ongoing economic downturn.

Asia is, indeed, setting the pace for the rapidly changing world order in the region.  And in many ways, these countries have been the catalyst of this change. They are reaching out beyond their borders, trying to capitalize on each other’s strengths and to benefit from Asia’s continued economic prospects in the coming decades.






At the Association of Southeast Asian Nations (ASEAN) meeting in Bangkok in August 2009, Thailand achieved two benefits from the new FTA between ASEAN countries, which will be effective in January 1, 2010.

1. FTA will help Thai investment in China

2. Reduced Tariffs on Products with India




 
  The developing nations of ASEAN obviously need the capital, advanced technology, skill sets and financial expertise from Korea. In return, along with cheaper labor and other costs for Korean companies investing in the region, ASEAN can also offer South Korea its expanding marketplace which has the potential to offset decreasing consumer sales prospects in the West.





 
Benefits of Free Trade Agreements (FTAs)

Countries have many reasons to strike trade deals, as they lead to more open markets, even if liberalisation occurs only with respect to certain trading partners.  As such, countries have two strong reasons to liberalize: First, they may face less resistance from vested interests suffering from foreign competition; second, if the outcome of preferential liberalisation proves successful, support for opening multilateral markets may be strengthened.

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