The AFTA (ASEAN Free Trade Area) is an acronym that stands for the ASEAN Free Trade Area. It is a regional trade agreement formed by the Association of Southeast Asian Nations (ASEAN) in 1992. Spanning a combined population of over 650 million people, AFTA aims to promote economic integration and free trade among its member countries.
The main objective of AFTA is to create a single market and production base by eliminating tariff barriers on goods traded within the region. Under AFTA, member countries commit to gradually reducing and ultimately eliminating import duties on specified products, leading to the establishment of a free trade zone. This allows for the easier movement of goods and services across borders within ASEAN, promoting economic growth, investment, and employment opportunities.
In addition to the elimination of tariffs, AFTA also encourages the liberalization of trade in other areas such as services, investments, and intellectual property. Member countries are also encouraged to harmonize and coordinate their trade policies, regulations, and standards to enhance regional cooperation.
AFTA plays a vital role in fostering economic integration in Southeast Asia, promoting cross-border trade, and attracting foreign direct investments. By eliminating trade barriers, it helps to level the playing field for businesses and facilitates the growth of regional supply chains. Furthermore, AFTA supports the development of a more inclusive and sustainable regional economy, driving poverty reduction and improving living standards for the citizens of ASEAN member countries.
