Objectives of the ASEAN Free Trade Agreement

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Thailand was one of the original members of ASEAN.
Thailand was one of the original members of ASEAN. (Image: Jupiterimages/Photos.com/Getty Images)

ASEAN, the Association of Southeast Asian Nations, was originally formed in the late 1960s. The pact aimed to stimulate economic growth, cultural progress and social cohesion in the region. The nations that signed the agreement also wanted to provide ongoing education to their people, while informing the rest of the world of what was going on in this area.

Brief History

ASEAN was originally formed in 1967. The charter members were Thailand, Indonesia, the Philippines, Malaysia and Singapore. Brunei joined the confederation in 1985. Changing social attitudes in the area brought in Vietnam in 1995, Laos and Myanmar (formerly known as Burma) in 1997, and finally Cambodia in 1999, making up today's 10-nation ASEAN federation.

AFTA's Basic Goals

The ASEAN Free Trade Agreement, known as AFTA, first came into being in 2003. Its original purpose was to stimulate trade within the member nations. In actual fact, it does not guarantee free trade, but rather has implemented a plan called the Common Effective Preferential Tariff (CEPT). This program aims to set up a preferential tariff of no more than 5 percent among the members of ASEAN. This program's main objective is to stimulate inter-regional trade.

New Members

ASEAN has tried to extend its free trade agreement and draw in other Asian nations. India and China have now signed agreements with ASEAN. In the case of China, it was a long, rather painful negotiation. Talks between ASEAN and China began back in 2002, but an agreement was not formally validated until Jan. 1, 2010.

Objectives

The objectives of the Asian Free Trade Agreement, whether strictly within ASEAN or including other Asian nations, begins with the idea of strengthening and augmenting trade investment and cooperation among the members. It hopes to streamline the investment process within the community while providing guidelines to clarify these investment programs. It wishes to investigate possible new areas of cooperation, facilitate economic integration and bridge the gap in development levels among member nations.

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