Foreign Investment: The Elimination of Trade Barriers among Member States

457 Words2 Pages
The ultimate objectives of AFTA are to increase ASEAN's competitive edge as a production base geared for the world market and to liberalize trade in goods in the ASEAN region through the elimination of intra-regional trade barriers on both tariff and non-tariff barriers for ASEAN products. The elimination of trade barriers among Member States is expected to promote greater economic efficiency, productivity and competitiveness, which should create a larger market in the Southeast Asian region. Thus, investors will benefit from economies of scales productions, and moreover, consumers in ASEAN Member States will enjoy lower-priced products. ASEAN expects that AFTA will attract more foreign investment into the ASEAN region, and this investment will stimulate the growth of supporting industries. The Agreement on the Common Effective Preferential Tariff (CEPT) Scheme for the ASEAN Free Trade Area is the main implementing mechanism by which the ASEAN Free Trade Area seeks to eliminate intra-regional tariffs and non-tariff barriers. This chapter is divided into 2 sections. The first section will discuss the obligations of ASEAN Members to eliminate tariff, quantitative restrictions and other non-tariff barriers. The second section will examine exceptions of the obligation to implementation of the CEPT Scheme, which are general exception and emergency measures. I. Obligations to Implement the CEPT Scheme for AFTA To create ASEAN Free Trade Area, Member States are obligated to
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