What Is the Main Purpose of Acfta Agreement
On January 1, 2010, the average tariff rate on Chinese products sold in ASEAN countries increased from 12.8 to 0.6 percent until other ASEAN members introduced the free trade area. Meanwhile, the average tariff rate on ASEAN products sold in China rose from 9.8% to 0.1%.  In 2015, ASEAN`s total trade in goods with China reached $346.5 billion (15.2% of ASEAN trade), and ACFTA accelerated the growth of China`s direct investment and trade cooperation.  In 2002, China and ASEAN countries signed the Comprehensive Framework Agreement on Economic Cooperation, which provided the legal basis for the establishment of the ASEAN-China Free Trade Area (ACFTA). Under THE ACFTA, there are three agreements aimed at the free movement of goods, services and investment. The ASEAN-India Trade Agreement on Goods entered into force on 1 January 2010. The signing of the agreement paved the way for the creation of one of the largest free trade area markets in the world, creating opportunities for more than 1.9 billion people in ASEAN and India with a combined GDP of $4.8 trillion. AIFTA creates a more liberal regime, facilitating market access and investment between member countries. The agreement provided for the tariff liberalisation of more than 90% of the products traded between the two dynamic regions. As a result, it was agreed to remove tariffs on more than 4,000 product lines at the earliest in 2016. The African Continental Free Trade Area (AfCFTA) agreement will create the largest free trade area in the world in terms of the number of participating countries. The pact connects 1.3 billion people in 55 countries with a combined gross domestic product (GDP) worth $3.4 trillion. It has the potential to lift 30 million people out of extreme poverty, but its full potential will depend on the implementation of important policy reforms and trade facilitation measures.
The agreement establishing the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) entered into force in January 2010. The Free Trade Agreement is the most comprehensive agreement covering a wide range of issues, including trade in goods and services, investment, intellectual property, competition and economic cooperation. Since its inception, AANZFTA has promoted trade in goods and services by removing barriers and reducing transaction costs for companies wishing to operate in member countries. Under the agreement, 99% of Australian-New Zealand merchandise trade with Indonesia, Malaysia, the Philippines and Vietnam will be duty-free by 2020. After full implementation in 2025, almost all trade between member countries will be duty-free, helping businesses save millions of dollars in tariffs each year. Step 1: Find out what the preferred price is for your product In March 2018, three separate agreements were signed: the African Continental Free Trade Agreement; the Kigali Declaration; and the Protocol on the Free Movement of Persons. All three agreements aim to reduce bureaucracy, harmonise regulations and avoid protectionism. It will also develop intra-African trade through better harmonization and coordination of rules across Africa. The so-called “Phase II” protocols, which are still under negotiation, will include the investment protocol, which will decide the important issue of intra-African investment protection, whether intra-African investors will be able to enter into an investor-state dispute on the basis of the guarantees contained in the treaty, and whether they can, in which forum.
The scope of the AfCFTA is broad. The agreement will reduce tariffs between member states and cover policy areas such as trade facilitation and services, as well as regulatory measures such as hygiene standards and technical barriers to trade. Full implementation of the AfCFTA would reshape the region`s markets and economies and increase the production of services, manufacturing and natural resources. The World Bank`s report, The African Continental Free Trade Area: Economic and Distributional Effects, is designed to help policymakers implement measures that can maximize the potential gains of the agreement while minimizing risks. Creating a continent-wide market requires determined efforts to reduce all trading costs. Governments also need to develop measures to increase the willingness of their workforce to seize new opportunities. AsEAN members have a total population of over 650 million. Indonesia accounts for more than 40 percent of the region`s population and its population has been the most opposed to the deal.   The AfCFTA is a single market agreement that will stretch from Egypt to South Africa, from Senegal to Djibouti and will include 1.2 billion people with a combined GDP of $2.6 trillion. Africa has a young population and a growing middle class whose purchasing power is increasing. Investors will be able to do business with a single set of trade and investment rules across the African continent. Investors will also be able to take advantage of economies of scale and avoid the challenges of market fragmentation.
While COVID-19 has had a significant impact on the AU`s economic fate, the fact that economic integration is progressing under the AfCFTA and that international organizations are providing support is likely to boost investor confidence in the region`s long-term prospects. Over the past decade, trade and investment between ASEAN member states and China under the ASEAN Free Trade Area (ACFTA) has increased significantly. The Agreement on Trade in Goods was signed in 2004 and implemented by all member countries in July 2005. Under the agreement, the original six ASEAN members and China decided to abolish tariffs on 90 percent of their products by 2010, while Cambodia, the Lao People`s Democratic Republic, Myanmar and Vietnam – commonly known as CLMV countries – had until 2015 to do so. Since the signing of the agreement, China has consistently maintained its position as ASEAN`s largest trading partner. .