ASEAN’s initiatives for free trade in East Asia under AEC

Abstract

ABSTRACT The greatest achievement of ASEAN’s intra-regional economic cooperation since its inception in 1976 is the realization of the ASEAN Free Trade Area (AFTA), which started with tariff cuts in 1993. AFTA was completed in January 2018 with the elimination of intra-regional tariffs. The AFTA itself is an FTA of an unusually high standard internationally, with the level of liberalization exceeding even that of the TPP 11. However, when examined from the aspect of utilization, in the case of Thailand’s exports to ASEAN, more than 30% do not use AFTA for one reason or another. This indicates that there are points of improvement in the system of the AFTA and in the customs procedures that are indispensable in using the AFTA. Furthermore, some member countries have introduced non-tariff barriers to protect their domestic industries while eliminating tariffs, which is contrary to the principles of AFTA. ASEAN has been expanding the scope of its economic cooperation since 2008 with the aim of establishing the ASEAN Economic Community (AEC), but even so, what the industrial world is seeking in the “post-AFTA” periods are trade-related measures such as the “facilitation of customs procedures” and the “elimination of non-tariff barriers.” Nowadays, when mega FTAs such as RCEP and TPP11 is being constructed one after another, ASEAN needs to transform itself into the most advanced regional cooperation organization in terms of liberalization level, scope, and rules if it is to maintain its centripetal force for direct investment.