ASEAN Free Trade Area (AFTA) | Trade Samaritan

ASEAN Free Trade Area (AFTA)

AFTA concord was signed in Singapore in 1992 and has 10 countries, Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam. These countries have also formed an association known as ASEAN – Association of South East Asian Nations.

The prime objectives of AFTA is to:

  • Attract foreign direct investment (FDI)
  • Expand intra-ASEAN trade
  • Create a single market
  • Enhancing ASEAN economic cooperation
  • Sustain economic growth and development of all member countries

The above stated economic objectives are will be achieved through below stated measures to be adopted by the participating/member countries. All Member States agree to establish and participate in the ASEAN Free Trade Area (AFTA) within 15 years.

  • Reduction of tariffs (20% or below in 7 years)
  • Gradual elimination of non-tariff barriers (5 years)
  • Measures on border and non-border areas for enhanced cooperation
  • Elimination of quantitative restrictions for the products included in the bilateral agreement increase investments, industrial linkages and complementarity by adopting new and innovative measures enhance cooperation in the field of energy, including energy planning, exchange of information, transfer of technology, research and development, manpower training, conservation and efficiency, and the exploration, production and supply of energy resources.
  • Customs documentation using Form D which is the preferential certificate of origin

AFTA is based on the foundation of Common Effective Preferential Tariff (CEPT) between the named countries and is applicable to all products manufactured in the participating countries including agricultural and capital goods.

As of 2010 we can say that out of the 10 participating countries, AFTA has realized in 5 countries namely, Brunei Darussalam, Indonesia, Philippines, Singapore and Thailand as these are 100% free trade areas. These 5 countries have completely (99%) eliminated import duties.

A ministerial level council has been set up to supervise, coordinate and review the progress of AFTA. Recent analysis of benefits of AFTA suggests that better port facilities and development in internet sector are the 2 most impacting factors, and if effectively adopted by ASEAN countries can lead to even a better trade and development (100% realization of AFTA).


World Trade Law
Ministry of International Trade and Industry
International Enterprise Singapore
Association of Southeast Nations 
Library of the European Parliament