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What is AFTA?
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ASEAN Free Trade Area (AFTA) is an agreement by the
Association of Southeast Asian Nations, of local manufacturing
in all ASEAN countries. There are currently ten (10) members,
namely: Brunei, Indonesia, Malaysia, Philippines, Singapore,
Thailand, Vietnam, Laos, Myanmar, and Cambodia.

The primary objectives of AFTA are:

  • To increase ASEAN’s competitive edge as a production
    base in the world market through the elimination, within
    ASEAN, of tariffs and non-tariff barriers

  • To attract more foreign direct investment to ASEAN.

The mechanism for achieving the above objectives is Common
Effective Preferential Tariff (CEPT) scheme, which established
a schedule for phased to bring down the tariffs among ASEAN.

Consumers are the greatest beneficiaries of AFTA, as they can
enjoy lower prices. Under AFTA, tariffs will eventually be
reduced to no more than 5%. The Malaysian automobile sector
has been given a breather in implementing the AFTA tariff
schedule, so that tariffs will be reduced in stages to 20% in 2005
and 5% in 2007.
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