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ASEAN Free Trade Area From Wikipedia, the free encyclopedia This article needs additional citations for verification. Please help improve this article by adding reliable references. Unsourced material may be challenged and removed. (January 2009) ASEAN Free Trade Area (AFTA) ! is a trade bloc agreement by the #ssociation of $outheast #sian %ations supporting local manufacturing in all #$&#% countries. The #FT# agreement 'as signed on () *anuary !++( in $ingapore. When the #FT# agreement 'a
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  ASEAN Free Trade Area From Wikipedia, the free encyclopediaThis article needs additional citations for verification. Please help improve this article  by adding reliable references. Unsourced material may be challenged and removed.  (January 2009) ASEAN Free Trade Area  ( AFTA ) !  is a trade bloc agreement by the #ssociation of $outheast #sian %ations supporting local manufacturing in all #$&#% countries.The #FT# agreement 'as signed on  *anuary !++ in $ingapore. When the #FT# agreement 'as srcinally signed, #$&#% had si members, namely, -runei, ndonesia, /alaysia, Philippines, $ingapore and Thailand. 0ietnam  1oined in !++2, 3aos and /yanmar  in !++4 and 5ambodia in !+++. #FT# no' comprises ten countries of #$&#%. #ll the four latecomers 'ere re6uired to sign the #FT# agreement in order to 1oin #$&#%, but 'ere given longer time frames in 'hich to meet #FT#7s tariff reduction obligations.The primary goals of #FT# seek to8 ã ncrease #$&#%7s competitive edge as a production base in the 'orld market through the elimination, 'ithin #$&#%, of tariffs and non9tariff barriers: and ã #ttract more foreign direct investment to #$&#%.The primary mechanism for achieving the goals given above is the 5ommon &ffective Preferential Tariff  (5&PT) scheme, 'hich established a schedule for phased initiated in !++ 'ith the self9described goal to increase the ; region’s competitive advantage as a  production base geared for the world market  ;. Contents ã ! <istory ã  The 5ommon &ffective Preferential Tariff (5&PT) scheme ã = >ule of ?rigin ã @ #dministration ã 2 Aispute resolution ã B Further trade facilitation efforts ã 4 /embership ã  #$&#% Plus Three ã + >elated free trade areas ã !C >eferences [edit] History  # proposal to set up a Free Trade #rea in #sean 'as first mooted by the Thai Prime /inister #nand Panyarachun, 'hich 'as agreed upon 'ith amendments during the #$&#% $eniors &conomic ?fficial /eeting (#&/) in Duala 3umpur . n *anuary !++, the #$&#% members signed the $ingapore Aeclaration at the heart of 'hich 'as the creation of #FT# in !2 years. This is a comprehensive program of tariff reduction in the region, 'hich is to be carried out in phases through the year CC. This deadline 'as subse6uently moved for'ard and #FT# became fully operational on ! *anuary CC=.?ver the course of several years, the initial program of tariff reductions 'as broadened and accelerated and other ;#FT# Plus; activities 'ere initiated. This includes efforts to eliminate non9tariff barriers, harmonisation of customs nomenclature, valuation, and  procedures and development of common product certification standards. [edit] The Common Effective Preferential Tariff (CEPT) scheme Unlike the &U, #FT# does not apply a common eternal tariff on imported goods. &ach #$&#% member may impose tariffs on goods entering from outside #$&#% based on itsnational schedules. <o'ever, for goods srcinating 'ithin #$&#%, #$&#% members areto apply a tariff rate of C to 2 percent (the more recent members of 5ambodia, 3aos, /yanmar and 0ietnam, also kno'n as 5/30 countries, 'ere given additional time to implement the reduced tariff rates). This is kno'n as the 5ommon &ffective Preferential Tariff (5&PT) scheme.#$&#% members have the option of ecluding products from the 5&PT in three cases8 !.) Temporary eclusions: .) $ensitive agricultural products: =.) Eeneral eceptions. Temporary eclusions refer to products for 'hich tariffs 'ill ultimately be lo'ered to C92, but 'hich are being protected temporarily by a delay in tariff reductions.$ensitive agricultural products include commodities such as rice. #$&#% members have until C!C to reduce the tariff levels to C92.Eeneral eceptions refer to products 'hich an #$&#% member deems necessary for the  protection of national security, public morals, the protection of human, animal or plant life and health, and protection of articles of artistic, historic, or archaeological value. #$&#% members have agreed to enact Gero tariff rates on virtually all imports by C!C for the srcinal signatories, and C!2 for the 5/30 countries. [edit] !le of ri#in The 5&PT only applies to goods srcinating 'ithin #$&#%. The general rule is that local#$&#% content must be at least @C of the F?- value of the good. The local #$&#% content can be cumulative, that is, the value of inputs from various #$&#% members can be combined to meet the @C re6uirement. The follo'ing formula is applied8  >a' material cost H Airect labor cost H Airect overhead cost H Profit H nland transport cost  !CC F?- value<o'ever, for certain products, special rules apply8 ã 5hange in 5hapter >ule for Wheat Flour: ã 5hange of Tariff $ub9<eading for Wood9-ased Products: ã 5hange in Tariff 5lassification for 5ertain #luminum and #rticles thereof.The eporter must obtain a IForm AJ certification from its national government attesting that the good has met the @C re6uirement. The Form A must presented to the customs authority of the importing government to 6ualify for the 5&PT rate. Aifficulties have sometimes arisen regarding the evidentiary proof to support the claim, as 'ell ho' #$&#% national customs authorities can verify Form A submissions. These difficulties arise because each #$&#% national customs authority interprets and implements the Form A re6uirements 'ithout much coordination. [edit] Administration #dministration of #FT# is handled by the national customs and trade authorities in each #$&#% member. The #$&#% $ecretariat has authority to monitor and ensure compliance 'ith #FT# measures, but has no legal authority to enforce compliance. This has led to inconsistent rulings by #$&#% national authorities. The #$&#% 5harter is intended to bolster the #$&#% $ecretariatKs ability to ensure consistent application of #FT# measures.#$&#% national authorities have also been traditionally reluctant to share or cede sovereignty to authorities from other #$&#% members (although #$&#% trade ministries routinely make cross9border visits to conduct on9site inspections in anti9dumping investigations). Unlike the &U or %#FT#, 1oint teams to ensure compliance andinvestigate non9compliance have not been 'idely used. nstead, #$&#% national authorities must rely on the revie' and analysis of other #$&#% national authorities to determine if #FT# measures such as rule of srcin are being follo'ed. Aisagreements may result bet'een the national authorities. #gain, the #$&#% $ecretariat may help mediate a dispute but has no legal authority to resolve it.#$&#% has attempted to improve customs coordination through the implementation of the #$&#% $ingle Windo' pro1ect. The #$&#% $ingle Windo' 'ould allo' importers to submit all information related to the transaction to be entered electronically once. This information 'ould then be shared 'ith all other #$&#% national customs authorities. [edit] $is%!te resol!tion #lthough these #$&#% national customs and trade authorities coordinate among themselves, disputes can arise. The #$&#% $ecretariat has no legal authority to resolve  such disputes, so disputes are resolved bilaterally through informal means or through dispute resolution.#n #$&#% Protocol on &nhanced Aispute $ettlement /echanism governs formal dispute resolution in #FT# and other aspects of #$&#%. #$&#% members may seek mediation and good offices consultations. f these efforts are ineffective, they may ask $&?/ to establish panel of independent arbitrators to revie' the dispute. Panel decisionscan be appealed to an appellate body formed by the #$&#% &conomic 5ommunity 5ouncil.The Protocol has almost never been invoked because of the role of $&?/ in the dispute resolution process. $&?/ decisions re6uire consensus among all #$&#% members, and since both the aggrieved party and the alleged transgressor are both participating in $&?/, such consensus cannot be achieved. This discourages #$&#% members from invoking the Protocol, and often they seek dispute resolution in other fora such as the WT? or even the nternational 5ourt of *ustice. This can also be frustrating for companies affected by an #FT# dispute, as they have no rights to invoke dispute resolution yet their home #$&#% government may not be 'illing to invoke the Protocol. The #$&#% $ecretary Eeneral has listed dispute resolution as re6uiring necessary reform for proper administration of #FT# and the #&5. [edit] F!rther trade facilitation efforts &fforts to close the development gap and epand trade among members of #$&#% are key points of policy discussion. #ccording to a CC research brief published by the World -ank  as part of its Trade 5osts and Facilitation Pro1ect,   #$&#% members have the potential to reap significant benefits from investments in further trade facilitation reform, due to the comprehensive tariff reform already realised through the #$&#% Free Trade #greement.This ne' analysis suggests eamining t'o key areas, among others8 port facilities and competitiveness in the nternet services sector. >eform in these areas, the report states, could epand #$&#% trade by up to 4.2 percent (L billion) and 2.4 percent (L!4  billion), respectively. -y contrast, cutting applied tariffs in all #$&#% members to the regional average in $outheast #sia 'ould increase intra9regional trade by about  percent (LB.= billion). = [edit] &em'ershi% 5ountries that agree to eliminate tariffs among themselves8 ã  -runei ã  ndonesia ã  /alaysia ã  Philippines
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