What Is Asean Agreement

The ASEAN Free Trade Area (AFTA)[1] is a trade bloc agreement of the Association of Southeast Asian Nations that supports local trade and production in all ASEAN countries and facilitates economic integration with regional and international allies. [2] [3] [4] It is considered one of the largest and most important free trade areas (FTAs) in the world and, together with its network of dialogue partners, has promoted some of the world`s largest multilateral forums and blocs, including the Asia-Pacific Economic Cooperation, the East Asia Summit and the Regional Comprehensive Economic Partnership. [5] [6] [7] [8] [9] [10] ASEAN has concluded a series of free trade agreements with other Asian countries that are radically changing the global supply and manufacturing landscape. It has, for example, a treaty with China that effectively eliminated reduced tariffs on nearly 8,000 product categories, or 90 percent of goods imported at zero. These favourable conditions have entered into force in China and in the original ASEAN members such as Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand. In addition to the China-India Free Trade Agreement, ASEAN also has a combined free trade agreement with Australia and New Zealand known as AANZFTA. The agreement, which will also be phased in, has eliminated tariffs on 67% of all products traded between regions and will be extended to 96% of all products by 2020. This is the first time asean has begun negotiations on a free trade agreement covering all sectors, including goods, services, investment and intellectual property rights, making it the most comprehensive trade agreement ever negotiated by ASEAN. Details of this agreement can be found here. The production trend is therefore to continue to develop products for this huge consumer market, but to place the necessary production capacities in a cheaper place. ASEAN`s free trade agreement with China allows regional companies and multinationals operating in Asia to do just that.

This is a trend that is already underway – as we note at Foxconn, the manufacturer of many components that end up in Apple`s products, which wants to relocate its 1.3 million employees from China and Indonesia, where wages are lower and there is a large and available workforce. This is a solid strategy that is increasingly being adopted by many manufacturers. .

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