The ASEAN Free Trade Area or AFTA is a free trade agreement between ASEAN countries. Do you know the history, purpose and impact of AFTA? The history of the establishment of AFTA Free trade embraced by many countries in the world cannot be avoided by countries in Southeast Asia. The concept of a free trade area was born to facilitate and increase trade between countries in Southeast Asia. The AFTA agreement was signed on January 28, 1992. At that time, the 4th ASEAN Summit was held in Singapore. When AFTA was signed, there were only six ASEAN members, namely Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Brunei Darussalam. The other four ASEAN members only ratified AFTA after joining ASEAN.
AFTA Goals
AFTA aims to make the ASEAN region a competitive place of production. So that ASEAN products have strong competitiveness in the global market. The production base is realized by removing tariff and non-tariff barriers that have been occurring between countries. The objectives of AFTA in a short description are:
- Making ASEAN the world’s production center
- Attract foreign investment
- Creating a regional market for people in Southeast Asia
Impact of AFTA
With AFTA, ASEAN countries can still impose tariffs on imported goods. However, specifically for imported goods from ASEAN countries, the tariff is reduced to 0 to 5 percent.
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