FTA :

• AFTA
• CAFTA
• EXCISE TAX
• TARIFF TAX

What Is Afta ?

      AFTA is an acronym for an agreement for a free trade area. There are about 10 countries from South East Asia that are participating in this trade agreement. Any kind of import and export among these countries is completely free from taxes. It basically is a trade block agreement signed by the Association of the Southeast Asian Nations (ASEAN). More..

AFTA, or the ASEAN Fee Trade agreement, can prove beneficial to all the countries in the Asian continent. However, like any other deal there are pros and cons of this agreement. A discussion of the advantages and disadvantages help one better understand the global trade perspectives and the inner details of this agreement.

ASEAN free trade is an agreement between all the Southeast Asian countries. It was signed in 1992 in Singapore. The Asian countries that participated in this agreement are Brunei, Indonesia, Malaysia, Thailand, Singapore, Philippines and Vietnam. Myanmar, Laos and Cambodia joined later. Now there are a total of ten countries in the AFTA agreement.  

The main advantages of AFTA are it helps in building a larger consumer market, and also expanding and strengthening the business prospects for participating companies. It removes all the taxes and tariff barriers in foreign trade, which helps in expediting the export and import. This, in turn, helps the consumers to have access to more products much faster. It also helps in increasing the prospects of direct investments with foreign countries. The common tariff also regulates the import and export processes. There is a very minimal charge applied for imports within the ASEAN bracket.

The main disadvantage of AFTA is the common external tariff or the CEPT. This tariff is not applicable on all import goods. There is a charge or tariff imposed on the imported goods, which is not beneficial from the consumer point of view. The goods that are imported from outside the non-participating ASEAN countries are heavily taxed.

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