Import-Export jobs
1. What is AFTA? With related concepts
1.1. What is an FTA?
FTA is an acronym for Free Trade Area, which means Free Trade Area. This is one of the forms of international association to build and form a unified market for both goods and services. bill of lading and services between member states agree on the reduction or elimination of barriers non-tariff zone. Of course, member states still enjoy the independence and autonomy of building relationships with countries outside the region as usual. Or to put it simply, the countries participating in the FTA agreement can still continue and maintain many business relationships with their own tariffs and trade barriers with countries outside the region.
1.2. ASEAN Free Trade Area – What is AFTA?
If you have understood the definition of the term FTA, perhaps you have partly understood what an AFTA agreement is? As the ASEAN Free Trade Area, and it can be said that this is one of the largest and most important free trade areas (FTAs) in the world, together with a network of dialogue partners, has driving some of the world's largest multilateral forums and blocs, including the Asia-Pacific Economic Cooperation, the East Asia Summit, and the region's comprehensive economic partnership.
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Is the trade 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.
AFTA Agreement – ASEAN Free Trade Area was signed on 28 January 1992 in Singapore. At that time, ASEAN had only six signatories, namely Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand. Then, in 1995, our country Vietnam joined; in 1997 there were Laos and Myanmar; 1999 was Cambodia. Therefore, up to the present time, AFTA currently includes ten ASEAN countries.
1.3. What is NAFTA?
NAFTA - North American Free Trade Area you can understand is a Free Trade Area established under an agreement signed between North American countries on August 12, 1992. At that time, it included 3 countries, USA, Canada and Mexico. Similar to the function of other agreements, the policies are also related to the reduction and elimination of tariff barriers, in order to partly promote multinational economic activities among countries in the region. At the same time, it has partly eliminated all obstacles in the business of trading in goods and services; even citizens in the area can freely travel, invest in business, open a bank, an insurance company, import Export Company….
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2. Information not to be missed about AFTA – ASEAN Free Trade Area
2.1. Circumstances of birth ASEAN Free Trade Area
In the early 90s, in the context of the economic-political economy that had just gone through the end of the cold war, which was changed both internationally and regionally, it put the economies of the member states of ASEAN before the end of the war. The challenges are enormous and that are not easily overcome, such as:
– The biggest and most difficult challenge to overcome is that the process of economic globalization is changing rapidly and strongly, typically traditionalist countries in ASEAN will increasingly lose motivation from policy makers inside and outside the region.
– With the formation and development of special links in the region such as the North American Free Trade Area with the EU, what is NAFTA afta? It is gradually becoming closed, immune to ASEAN goods because it is quite difficult to penetrate these already closely linked markets.
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– When going through a crisis period, policy changes such as opening up of multinational economic associations are also propagated and encouraged and attracted foreign investors to partially improve the investment environment. Along with the advantages of resources of China, Vietnam, etc., it is also an extremely attractive investment market, so ASEAN needs to step up membership expansion to improve cooperation. area.
With those three difficult challenges, in 1992 Thailand came up with an extremely attractive idea, so the ASEAN Summit held in Singapore made the historic decision, which is to establish an ASEAN Free Trade Area - AFTA.
2.2. The main goals of AFTA seek to
After you have consulted the above content What is AFTA? Then perhaps you will also somewhat know the main goal of this agreement. But in fact, in addition to reducing as well as eliminating barriers on tariffs and business markets, AFTA also has an equally noble goal, which is to increase ASEAN's competitive advantage. In other words, it is like a catalyst to turn ASEAN into a production base on the world market and attract big foreign direct investment tycoons into ASEAN.
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2.3. AFTA – ASEAN Free Trade Area Managed by whom?
Based on updated information, AFTA's management is carried out by agencies, customs agent together with the national trade organization in each ASEAN member country. In addition, the competent ASEAN Secretariat will be the party directly implementing the task, monitoring and ensuring the compliance of member states with the regulations of AFTA. However, their responsibility does not stop there, but they do not have the legal authority to enforce compliance. It is because of this that the rulings are not uniform across ASEAN responsibilities. Therefore, the ASEAN charter was introduced to further enhance the role and responsibility of the ASEAN Secretariat to ensure the consistent application of AFTA - Free Trade Area measures by the countries of the region. Free translation.
Although ASEAN trade ministries regularly organize cross-border visits to member countries to carry out on-site checks to ensure zero dumping. But traditionally, the ASEAN authorities have also been reluctant to share jurisdiction or cede sovereignty to the jurisdictions of other ASEAN member states.
In addition, the duties of the ASEAN authorities are to regularly give opinions, evaluate as well as analyze whether AFTA measures are being followed or not. In the event of a conflict or dispute, the role of the ASEAN secretariat will be utilized at this time, because they are the one who stands up to mediate but does not have the legal authority to resolve it.
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3. Vietnam's participation in AFTA - ASEAN Free Trade Area / Asean Free Trade Area
3.1. Opportunities when Vietnam joins AFTA – ASEAN Free Trade Area
If you regularly monitor the economic - political situation, you probably know that in the past few years, ASEAN is an environment that attracts many big investors. As one of the member countries and participating in AFTA, Vietnam also has many opportunities to realize the cause of industrialization and modernization of the country.
Attracting foreign investment capital:
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As I mentioned above in the past few years, ASEAN is one of the markets that attracts a lot of investment capital, so when participating in AFTA, Vietnam also enjoys many advantages in attracting capital. investment from capital surplus countries.
Strengthening trade relations with other countries, expanding preferential markets:
The first advantage that our country participates in What is AFTA? To receive favorable conditions for economic and commercial growth. At the same time, it is also a driving force to promote business expansion.
According to statistics, at present, 30% of our country's import turnover is thanks to the member countries of ASEAN. In addition, when starting to participate in the implementation of the CEPT program, many items have been reduced import tax from 0-5%. Thus, you can also see the potentials of entering the domestic and foreign markets of our country.
Economic restructuring:
Finally, thanks to participating in AFTA, it has also created a lot of pressure as well as great motivation for Vietnamese businesses to strive for equipment reform, organizational structure reform, and application of management methods. in production and business activities. Therefore, the economic structure of our country has also improved a lot.
3.2. Challenge when Vietnam joins AFTA – ASEAN Free Trade Area
When we join AFTA, we have acknowledged the liberalization of Trade in the region, and then our country's economic level is still limited while ASEAN's member countries are all growing at a fast rate. economic chief. Therefore, we must try harder, promote many campaigns to improve the competitiveness index. However, the challenge did not stop there, we often encountered a situation where production was not consumed, especially in industries such as: household electrical appliances, leather shoes... at that time.
We also have to bear many different types of tariffs, along with a number of other costs incurred, which has also caused prices to escalate, so the prices of Vietnamese goods are often higher. The immediate problem for us to overcome these challenges is to step up the production and export of products under the CEPT tax cuts.
These are also not small challenges for our country, but they are also the foundation and basis for us to promote business activities. Hopefully the content shared about "What is AFTA? The website timviec365.vn has helped you understand the Asean Free Trade Area and our country's situation when participating in the ASEAN Free Trade Area!
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