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ASEAN leaders agree to create an ASEAN Free Trade Area 28th Jan 1992

The ASEAN Free Trade Area (AFTA) is a trade bloc agreement among the six original members of the Association of Southeast Asian Nations (ASEAN) – Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand. With the objective to liberalise intra-ASEAN trade, the AFTA was first proposed by then Thai Prime Minister Anand Panyarachun at the 24th ASEAN ministerial meeting held in Bangkok in July 1991.[1] The AFTA was endorsed by the six heads of government at the fourth ASEAN Summit held in Singapore on 28 January 1992.[2] In accordance with the AFTA Framework Agreement, ASEAN members had to commit to establish a free trade area by 2008 by means of a Common Effective Preferential Tariff (CEPT) scheme. Taking effect from January 1993, this scheme would gradually reduce tariffs on capital goods, manufactured products and processed agricultural goods.[3]

Singapore was a strong advocate of the AFTA as then Prime Minister Goh Chok Tong saw the proposed trade bloc as a timely ASEAN response to a changing international economic landscape that was marked by the emergence of new markets in Eastern Europe and regional economic blocs such as the Single European Market and the North America Free Trade Area.[4] In addition, Goh felt that the intra-regional competition brought about by the reduction of trade barriers would, in the long run, improve the efficiency and productivity of ASEAN economies. This would in turn increase ASEAN’s attractiveness to foreign investments.[5] Singapore was one of the first ASEAN countries to fulfil its AFTA commitment by lifting import tariffs on the goods listed under the CEPT scheme.[6]

In December 1995, the heads of government of the six original ASEAN members agreed to accelerate the CEPT scheme of the AFTA from 2008 to 2003.[7] Thetarget year was brought forward once again to the beginning of 2002 in light of the 1997–1998 Asian financial crisis.[8] Over the years, the scope of the AFTA expanded to include Vietnam, Laos, Myanmar and Cambodia. These newer ASEAN members were required to adhere to the AFTA agreement but were given longer time frames to meet their trade liberalisation commitments.[9]


References
1. Henson, B. (1992, January 29). A milestone leap. The Straits Times, p. 1; Kalimullah Hassan. (1991, July 21). Asean meet ends on an upbeat note. The Straits Times, p. 1; Kalimullah Hassan. (1991, August 19). Asean officials pin ‘free trade area’ hopes on summit in S'pore. The Straits Times, p. 11. Retrieved from NewspaperSG.
2. The Straits Times, 29 Jan 1992, p. 1; The Singapore Declaration. (1992, January 29). The Straits Times, p. 24. Retrieved from NewspaperSG.
3. Asean leaders back Afta fully as the answer to trade blocs. (1992, January 28). The Straits Times, p. 22. Retrieved from NewspaperSG.
4. Yang Razali Kassim. (1992, January 16). Keeping Asean relevant and sought alter. The Business Times, p. 2; Afta will boost investor confidence: PM Goh. (1992, January 27). The Business Times, p. 2. Retrieved from NewspaperSG.
5. The Business Times, 16 Jan 1992, p. 2;The Business Times, 27 Jan 1992, p. 2.
6. Lee, S. (1993, January 1). S'pore lifts duties on $1b more of Asean imports. The Business Times, p. 20. Retrieved from NewspaperSG.
7. Association of Southeast Asian Nations (ASEAN). (1995, December 15). Protocol to amend the agreement on the Common Effective Preferential Tariff scheme for the ASEAN Free Trade Area, Bangkok, 15 December 1995. Retrieved April 25, 2014, from ASEAN website: http://www.asean.org/component/zoo/item/protocol-to-amend-the-agreement-on-the-common-effective-preferential-tariff-scheme-for-the-asean-free-trade-area-bangkok-15-december-1995
8. Association of Southeast Asian Nations (ASEAN). (2002, January 31). Opening remarks of Rodolfo C. Severino, Secretary-General of the Association of Southeast Asian Nations, at the AFTA 2002 Symposium.  Retrieved April 25, 2014, from ASEAN website: http://www.asean.org/communities/asean-economic-community/item/the-asean-free-trade-area-reaching-its-target-2
9. Velloor, R. (1999, October 1). Free-trade meeting ends on positive note. The Straits Times, p. 92. Retrieved from NewspaperSG.

 

The information in this article is valid as at 2014 and correct as far as we are able to ascertain from our sources. It is not intended to be an exhaustive or complete history of the subject. Please contact the Library for further reading materials on the topic.

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