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Free Trade
Agreements (FTAs) with Asia
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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.
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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.
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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
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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.
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| 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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