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as pdf printable version in other projects wikimedia commons wikidata item appearance move to sidebar hide from wikipedia the free encyclopedia free trade area of the association of south east asian nations this article needs more citations please help improve this article by adding citations to reliable sources unsourced material may be challenged and removed find sources asean free trade area news newspapers books scholar jstor january 2009 learn how and when to remove this message asean free trade area agreement on the common effective preferential tariff cept scheme for the asean free trade area afta asean leaders at the signing of the afta cept agreement in singapore 28 january 1992 type free trade area and economic integration agreement context asean economic integration signed january 28 1992 1992 01 28 location singapore effective january 1 1993 1993 01 01 condition implementation of tariff reduction schedules under the cept scheme began on 1 january 1993 amendment protocol to amend the agreement on the cept scheme for afta 15 december 1995 protocol to amend the agreement on the cept scheme for afta for the elimination of import duties 31 january 2003 protocol to provide special consideration for rice and sugar 23 august 2007 replaces asean preferential trading arrangements pta replaced by asean trade in goods agreement atiga parties brunei cambodia indonesia laos malaysia myanmar philippines singapore thailand timor leste vietnam depositary asean secretariat language english part of a series on the history of asean timeline asian relations conference 1947 rangoon meetings 1947 south east asian league 1947 baguio conference 1950 seafet 1959 association of southeast asia 1961 maphilindo 1963 bangkok declaration 1967 treaty of amity and cooperation 1976 asean free trade area 1992 asean charter 2008 asean community 2015 member states indonesia 1967 malaysia 1967 philippines 1967 singapore 1967 thailand 1967 brunei 1984 vietnam 1995 laos 1997 myanmar 1997 cambodia 1999 timor leste 2025 observer state papua new guinea 1976 potential enlargement bangladesh 2024 sri lanka 1981 fiji 2011 key instruments bangkok declaration 1967 zopfan declaration 1971 treaty of amity and cooperation 1976 bali concord i 1976 asean free trade area 1992 bangkok treaty 1995 bali concord ii 2003 asean charter 2008 asean human rights declaration 2012 regional comprehensive economic partnership 2020 summits and forums asean summit asean plus three asean regional forum east asia summit asean inter parliamentary assembly regional comprehensive economic partnership secretaries general hartono dharsono 1976 umarjadi njotowijono 1978 ali abdullah 1978 narciso g reyes 1980 chan kai yau 1982 phan wannamethee 1984 roderick yong 1986 rusli noor 1989 ajit singh 1993 rodolfo severino jr 1998 ong keng yong 2003 surin pitsuwan 2008 lê lương minh 2013 lim jock hoi 2018 kao kim hourn 2023 topics history of southeast asia asean way asean centrality asean community pan asianism asian values asian century south china sea dispute 2021 myanmar coup d état list of founders v t e the asean free trade area afta 1 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 2 3 4 it stands as one of the largest and most important free trade areas fta in the world and together with its network of dialogue partners drove some of the world s largest multilateral forums and blocs including asia pacific economic cooperation east asia summit and regional comprehensive economic partnership 5 6 7 8 9 10 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 the primary mechanism for achieving such goals is the common effective preferential tariff scheme which established a phased schedule in 1992 with the goal to increase the region s competitive advantage as a production base geared for the world market history edit asean free trade area logo 1967 main article asean the association of southeast asian nations asean was established on 8 august 1967 when the foreign ministers of indonesia malaysia the philippines singapore and thailand signed the asean declaration the asean declaration announced the establishment of an association for regional cooperation among the countries of southeast asia aiming to promote cooperation in the economic social cultural technical education and other fields it also aims to promote regional peace and stability through abiding respect for justice and the rule of law and adherence to the principles of the united nations charter 11 1976 the first asean summit also known as bali summit was held on 23 24 feb 1976 in bali indonesia 12 economic cooperation among asean members was emphasised as the justification for the summit the establishment of afta was strongly resisted by president suharto from indonesia 13 1977 the second asean summit was held in kuala lumpur malaysia 12 the major concern was to improve asean s economic conditions at home by expanding the regionalisation with other industrialised nations 14 there were post summit conferences with japan australia new zealand and the united states which overshadowed the asean summit 14 asean emerged as a promising regional organisation deserving support 14 1987 the third asean summit was held on 14 15 december 1987 in manila the philippines 12 in between the second and the third summit economic cooperation was existent among asean members whereas economic integration was less favoured due to the risk of raising distributional issues and the reduced national political autonomy 15 economic growth became the central domestic political requirement and economic cooperation turned into the central focus 15 the concept of free trade area was advocated and emphasised in the summit where further development of the regional counter trade mechanisms were suggested by several country sources 15 the ambitious asean trade area was proposed by the asean economic research unit of the institute of southeast asian studies in singapore 16 the concept of asean trade area refers to a harmonising custom union with internal free trade and external tariffs bound to asean goods among member countries indonesia malaysia thailand the philippines singapore brunei 15 1991 asean started to liberalise trade by employing the cept concept yet avoiding the word free trade 17 prime minister anand from thailand and prime minister goh chok tong from singapore came up with the idea of afta in july 1991 17 the afta concept paper was subsequently developed by prime minister anand and a team led by suthee singhasaneh from thailand 17 1992 the fourth asean summit was held in singapore the afta agreement was signed on 28 january 1992 in singapore the 6 members who signed the agreement were brunei indonesia malaysia the philippines singapore and thailand the agreement was designated to eliminate tariff barriers among the signatories and create a regional market of 500 million people 18 the cept scheme was introduced in the agreement to alleviate the tariff on a wide range of products traded within the region 18 1993 afta was officially implemented in 1993 where the time frame of application was shortened from 15 to 10 years 17 the integration of cept and afta was presented by akrasanee where the cept rates of 0 5 were defined as free trade rates member countries were granted the timing to reduce their tariff rates to 0 5 within 15 years late joiners would be granted a shorter timespan to reduce their tariff rates accordingly 17 1995 vietnam officially joined asean on 28 july 1995 and has agreed to join afta as well 19 under vietnam s agreement with asean on afta vietnam will meet the requirements on tariff and non tariff reductions over a ten year period beginning on 1 january 1996 20 1997 laos and myanmar joined the afta agreement on 23 july 1997 21 both myanmar and laos has been given time to reduce tariffs on the local goods to below 5 until 2008 22 1999 cambodia joined the afta agreement on 30 april 1999 23 cambodia agreed to begin tariff reduction on 1 january 2000 and the deadline to achieve afta was 2010 23 the common effective preferential tariff cept scheme edit unlike the eu afta does not apply a common external tariff on imported goods each asean member may impose tariffs on goods entering from outside asean based on its national schedules however for goods originating within asean asean members are to apply a tariff rate of 0 5 the more recent members of cambodia laos myanmar and vietnam also known as cmlv countries were given additional time to implement the reduced tariff rates this is known as the common effective preferential tariff cept scheme asean members have the option of excluding products from the cept in three cases 1 temporary exclusions 2 sensitive agricultural products 3 general exceptions temporary exclusions refer to products for which tariffs will ultimately be lowered to 0 5 but which are being protected temporarily by a delay in tariff reductions for sensitive agricultural products include commodities such as rice asean members have until 2010 to reduce the tariff levels to 0 5 general exceptions refer to products which an asean member deems necessary for the protection of national security public morals the protection of human animal or plant life and health and protection of articles of artistic historic or archaeological value asean members have agreed to enact zero tariff rates on virtually all imports by 2010 for the original signatories and 2015 for the cmlv countries rule of origin edit the cept only applies to goods originating within asean the general rule is that local asean content must be at least 40 of the fob value of the good the local asean content can be cumulative that is the value of inputs from various asean members can be combined to meet the 40 requirement the following formula is applied raw material cost direct labour cost direct overhead cost profit inland transport cost x 100 fob value however for certain products special rules apply change in chapter rule for wheat flour change of tariff sub heading for wood based products change in tariff classification for certain aluminum and articles thereof the exporter must obtain a form d certification from its national government attesting that the good has met the 40 requirement the form d must be presented to the customs authority of the importing government to qualify for the cept rate difficulties have sometimes arisen regarding the evidentiary proof to support the claim as well as how asean national customs authorities can verify form d submissions these difficulties arise because each asean national customs authority interprets and implements the form d requirements without much co ordination administration edit administration of afta is handled by the national customs and trade authorities in each asean member the asean secretariat has authority to monitor and ensure compliance with afta measures but has no legal authority to enforce compliance this has led to inconsistent rulings by asean national authorities the asean charter is intended to bolster the asean secretariat s ability to ensure consistent application of afta measures asean national authorities have also been traditionally reluctant to share or cede sovereignty to authorities from other asean members although asean trade ministries routinely make cross border visits to conduct on site inspections in anti dumping investigations unlike the eu or nafta joint teams to ensure compliance and investigate non compliance have not been widely used instead asean national authorities must rely on the review and analysis of other asean national authorities to determine if afta measures such as rule of origin are being followed disagreements may result between the national authorities again the asean secretariat may help mediate a dispute but has no legal authority to resolve it asean has attempted to improve customs co ordination through the implementation of the asean single window project the asean single window would allow importers to submit all information related to the transaction to be entered electronically once this information would then be shared with all other asean national customs authorities dispute resolution edit although these asean national customs and trade authorities co ordinate among themselves disputes can arise the asean secretariat has no legal authority to resolve such disputes so disputes are resolved bilaterally through informal means or through dispute resolution an asean protocol on enhanced dispute settlement mechanism governs formal dispute resolution in afta and other aspects of asean asean members may seek mediation and good offices consultations if these efforts are ineffective they may ask seom senior economic officials meetings to establish panel of independent arbitrators to review the dispute panel decisions can be appealed to an appellate body formed by the asean economic community council the protocol has almost never been invoked because of the role of seom in the dispute resolution process seom decisions require consensus among all asean members and since both the aggrieved party and the alleged transgressor are both participating in seom such consensus cannot be achieved this discourages asean members from invoking the protocol and often they seek dispute resolution in other fora such as the wto or even the international court of justice this can also be frustrating for companies affected by an afta dispute as they have no rights to invoke dispute resolution yet their home asean government may not be willing to invoke the protocol the asean secretary general has listed dispute resolution as requiring necessary reform for proper administration of afta and the aec further trade facilitation efforts edit efforts to close the development gap and expand trade among members of asean are key points of policy discussion according to a 2008 research brief published by the world bank as part of its trade costs and facilitation project 24 asean members have the potential to reap significant benefits from investments in further trade facilitation reform due to the comprehensive tariff reform already realised through the asean free trade agreement thi...
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