Free Trade Agreements (FTAs)

between ASEAN and Other

Countries
ASEAN-China Free Trade Area (ACFTA)

 The Framework Agreement on Comprehensive Economic

Cooperation between ASEAN and China was signed on 5th
November 2002.
 It marks ASEAN’s first FTA with a dialogue partner.
 It comprises three agreements to date; Trade In Goods,
Trade In Services and Investment which were concluded
in November 2004, January 2007 and August 2009
respectively.
 Trade between ASEAN and China grew at an exponential
rate between 2004 and 2008; almost surpassing the US$200
billion target two years ahead of schedule.
 ASEAN-Japan Free Trade Area (AJFTA)

 The Framework for Comprehensive Economic Partnership

between ASEAN and Japan was signed at the ASEAN-Japan
Summit on 8 October 2003 in Bali, Indonesia.
 Japan has supported the growth of ASEAN member states,
particularly in infrastructure and human resource
development.
 In 2011, the total volume of trade between ASEAN and
Japan reached US$248 billion.
 ASEAN is now Japan's second largest trading partner.
 Japanese FDI into the region increased to approx. US$18.8
billion in 2011, making ASEAN the second most common
3 destination for Japanese enterprises behind the EU.
 ASEAN-India Free Trade Area (AIFTA)

 The Framework Agreement on Comprehensive Economic

Cooperation between ASEAN and India was signed at the 2nd
ASEAN-India Summit in 2003.
 The Framework Agreement envisages the establishment of an
ASEAN-India Regional Trade and Investment Area (RTIA)
as a long term objective.
 The ASEAN-India Trade in Goods Agreement (TIG) was
signed in Thailand on 13 August 2009.
 ASEAN and India are still in negotiations over Agreement on
Services and Investment which will complete all fields of the
ASEAN-India Free Trade Area.
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 ASEAN-Korea Free Trade Area (AKFTA)

 The Framework Agreement on Comprehensive Economic

Cooperation between ASEAN and the Republic of Korea
was signed at the 9th ASEAN-Republic of Korea Summit
on 13 December 2005.
 It comprises three agreements to date:
Trade In Goods for progressive reduction and
elimination of tariffs by each country on almost all products.
Trade In Services to reaffirm the commitments to
liberalise trade in services with substantial coverage, and
enhance cooperation in services.
Investment for progressive liberalized and transparent
investment regime, and protection of ASEAN investors in
5 Korea, vice versa.
 ASEAN-Australia-New Zealand
Free Trade Area (AANZFTA)

 The ASEAN - Australia - New Zealand Free Trade Agreement

(AANZFTA) was signed on 27th February 2009 in Cha am,
Thailand.
 It is ASEAN's first FTA with two developed countries
simultaneously, and the first ASEAN FTA done in a single
undertaking.
 AANZFTA represents ASEAN´s most ambitious FTA to date,
covering 18 chapters including new areas that ASEAN had
previously never negotiated on, such as competition policy and
intellectual property.
 The AANZFTA also includes an Economic Cooperation Work
Programme, which will involve projects and areas of cooperation
6 and capacity building between ASEAN, Australia and New Zealand.
 ASEAN and the European Union (EU)

 The final negotiations for a Free Trade Agreement between

Singapore and the EU were completed in December 2012
while negotiations on investment protection are continuing.
 The EU is negotiating Free Trade Agreements with Malaysia,
Vietnam and Thailand.
 The EU is ASEAN’s 2nd largest trading partner after China,
accounting for around 11% (more than €206 billion)
of ASEAN trade in goods and services in 2011.
 The EU is by far the largest investor in ASEAN countries. EU
companies have invested around €9.1 billion annually on
average (2000-2009).
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 ASEAN and the Unites States (US)

 The US has a robust and fast-growing trade and investment

relationship with ASEAN.
 In 2012, ASEAN was the fourth largest export market and
fifth largest overall trading partner of the US.
 US FDI in the ASEAN countries exceeded $159 billion in
2011, led by investments in manufacturing, finance and
insurance, and nonbank holding companies.
 In Nov 2012, the ASEAN-United States trade and investment
relationship was elevated with the launch of the U.S.-ASEAN
Expanded Economic Engagement (E3) initiative, a new
framework for economic cooperation designed to expand trade
8 and investment ties between the US and ASEAN.
ASEAN Economic Community

The ASEAN Economic Community (AEC) Blue

print was adopted in 2007. The AEC Blueprint
serves as a coherent master plan guiding the
establishment of AEC.
The ASEAN Economic
Community envisages the following
characteristics
  A single market and a production base.
 A highly competitive economic region
 A region of equitable economic development
 A region fully integrated into the global
economy

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 ASEAN as Single Market &
Productuion Base

Comprises five core elements:

 Free flow of goods
 Free flow of services
 Free flow of investment
 Free flow of capital
 Free flow of skilled labor

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 Production base comprise the 12 priority
integration sectors:

• Agro based products and logistics

• Air travel
• Automotive
• E- ASEAN
• Electronics
• Fisheries
• Healthcare
• Rubber based products
• Textiles and apparel
• Tourism wood based products
• Logistics
• Food, Agriculture and Forestry sector

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 Significance of Single Market &
Production Base

 Facilitate the development of production

networks in the region
 Enhance capacity to serve as a global
production centre and as a part of the global
supply chain
 reduction in transportation costs
 Free movement of professionals

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 Competitive Economic Region

Six core elements under the competitive

economic region:
 Competition policy
 Consumer protection
 Intellectual property rights
 Infrastructure development
 Taxation
 E-commerce
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 Competive Economic Region

Asean member states have commmitted

themselves to introduce nation wide
competition policies and laws to ensure a level
playing field and incubate a culture of fair
buisness competition for enhanced regional
economic performance in the long run.

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 Equitable Economic Development

Under equitable economic development

there are two elements:
1. Small and Medium Enterprise( SME)
2. Initiatives for ASEAN integration

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 Integration with global economy

Two approaches taken by ASEAN in

integrating with the global economy are:
 A coherent approach towards external
economic relations through Free Trade
Agreements (FTA)
& Closer Economic Partnerships(CEP).
 Enhanced participation in global supply
networks.
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 From CEPT to AEC

 A common Effective Preferential Tariff (CEPT)

scheme to promote the free flow of goods with
ASEAN lead to the ASEAN Free Trade Area (
AFTA).
 The AFTA is an agreement by the member nations
of ASEAN concerning local manufacturing in all
ASEAN countries
 The AFTA was signed on 28th January 1992 in
Singapore.

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 Single Aviation Market

The ASEAN-SAM is expected to fully liberalize

air travel member states in the ASEAN region,
allowing ASEAN countries and airlines
operating in the region to directly benefit from
the growth in air travel around the world and
also freeing up tourism, trade, investment &
services flows between member states.

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 Other economic integration
activities

 Roadmap for Financial and Monetary Integration of

ASEAN in four areas, namely, capital market
development, capital account liberalisation,
liberalisation of financial services and currency
cooperation.
 •Trans-ASEAN transportation network consisting of
major inter-state highway and railway networks,
including the Singapore to Kunming Rail-Link,
principal ports, and sea lanes for maritime traffic,
inland waterway transport, and major civil aviation
links
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  Roadmap for Integration of Air Travel Sector

 Interoperability and interconnectivity of national

telecommunications equipment and services,
including the ASEAN Telecommunications
Regulators Council Sectoral Mutual Recognition
Arrangement (ATRC-MRA) on Conformity
Assessment for Telecommunications Equipment.
 Trans-ASEAN energy networks, which consist of
the ASEAN Power Grid and the Trans-ASEAN Gas
Pipeline Projects
 Agreement on the ASEAN Food Security Reserve
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  Initiative for ASEAN Integration (IAI) focusing on infrastructure, human
resource development, information and communications technology,
and regional economic integration primarily in the CLMV countries
 Visit ASEAN Campaign and the private sector-led ASEAN Hip-Hop
Pass to promote intra-ASEAN tourism

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