Free Trade Agreement (Fta) With Asean

ASEAN has attempted to improve customs coordination through the implementation of ASEAN`s “Single Windows” project. The ASEAN single window would allow importers to transmit all transaction information electronically. This information would then be shared with all other ASEAN national customs authorities. Although these ASEAN national customs and trade authorities coordinate with each other, disputes can arise. The ASEAN secretariat does not have the legal authority to resolve these disputes, so disputes are resolved bilaterally through informal means or dispute resolution. The most important mechanism for achieving these objectives is the common system of effective preferential tariffs, which established a gradual timetable in 1992 to increase the region`s competitive advantage as a global market-oriented production base. The CEPT only applies to products originating in ASEAN. The general rule is that the local content of ASEAN must be at least 40% of the FOB value of the treat. The local content of ASEAN can be cumulative, i.e. the value of contributions from different ASEAN members can be combined to meet the 40% requirement. The following formula is used: products that are not excluded from the CEPT-AFTA system are products in the list of highly sensitive data (i.e. rice) and the general list of exceptions. The Coordination Committee for the Implementation of the CEPTScheme for AFTA (CCCA) is currently reviewing all lists of general exceptions to ensure that only lists that comply with Article 9, point b) 1 of the CEPT agreement are listed.

If Vietnam comes into play in just under a year`s time with the ASEAN Treaty, this change in production capacity that serves the Chinese market, in particular, will intensify. Vietnam has also deliberately positioned itself to use the contract with China by lowering its corporate tax rate to 22%, 3% less than in China. In order to encourage increased use of the CEPTAFTA system, a major transformation has also been adopted as an alternative rule for determining the origin of CEPT products. The CEPT Rules of Origin Task Force is currently working on key processing rules for certain product sectors, including wheat flour, iron and steel, and the eleven priority integration sectors covered by Bali Concord II. ASEAN exports increased their upward trend in the two years following the 1997-98 financial crisis and peaked in 2000, when total exports were valued at $408 billion. Following the fall in ASEAN exports to $366.8 billion in 2001 as a result of the economic slowdown in the United States and Europe and the recession in Japan, ASEAN exports recovered in 2002 to $380.2 billion. The upward trend in ASEAN-6 continued until the first two quarters of 2003. In the first two quarters of 2003, intra-ASEAN trade increased by 4.2% and 1.6% respectively in exports and imports. [Figures 2, 3 and 4] The manufacturing trend is therefore to continue to develop products for this huge consumer market, but to place the production capacity needed for this purpose on a cheaper site. The ASEAN Free Trade Agreement with China allows regional companies and MNN in Asia to do so. This is a trend that is already underway – as we are seeing with Foxconn, the manufacturer of many components that end up in Apple products, who want to relocate their 1.3 million workers from China and Indonesia, where wages are lower and where there is a large and available workforce. This is a solid strategy that is increasingly being adopted by many manufacturers.

These two agreements have a collective impact by making ASEAN the strategic hub of global sourcing and manufacturing. With a base of 150 million middle-class consumers aSEAN, this market, which was later coupled with the 250 million from China and India, represents a middle-class consumer market, with a total free trade of about 650 mi

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