Asean Economic Agreement

ASEAN has concluded a number of free trade agreements with other Asian countries that are radically changing the global public procurement and production landscape. It has, for example, a contract with China that has effectively reduced tariff reduction to nearly 8,000 product categories, or 90% of imported goods, to zero. These favourable conditions came into force in China and in ASEAN members, including Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand. A second option for the United States is to be fully involved in regional economic networks, in addition to an active security role. For example, the United States could join the CPTPP and support its rapid expansion to Indonesia, the Philippines, South Korea, Thailand and the United Kingdom. U.S. markets and technology make these agreements attractive and could encourage China to join in the long term (we believe the benefits are significant if the group does). But current U.S. policy does not seem to support this approach.

In order to encourage increased use of the CEPTAFTA system, a major transformation has also been adopted as an alternative rule for determining the origin of CEPT products. The CEPT Rules of Origin Task Force is currently working on key processing rules for certain product sectors, including wheat flour, iron and steel, and the eleven priority integration sectors covered by Bali Concord II. ASEAN exports increased their upward trend in the two years following the 1997-98 financial crisis and peaked in 2000, when total exports were valued at $408 billion. Following the fall in ASEAN exports to $366.8 billion in 2001 as a result of the economic slowdown in the United States and Europe and the recession in Japan, ASEAN exports recovered in 2002 to $380.2 billion. The upward trend in ASEAN-6 continued until the first two quarters of 2003. In the first two quarters of 2003, intra-ASEAN trade increased by 4.2% and 1.6% respectively in exports and imports. [Figures 2, 3 and 4] On November 15, 2020, 15 countries – members of the Association of Southeast Asian Nations (ASEAN) and five regional partners – signed the Comprehensive Regional Economic Partnership (RCEP), probably the largest free trade agreement in history. The RCEP and the 2018 Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) agreement, also dominated by East Asian members, are the only major multilateral free trade agreements signed during the Trump era. ASEAN national authorities are also traditionally reluctant to share or cede sovereignty to the authorities of other ASEAN members (although ASEAN trade ministries regularly conduct cross-border visits to conduct on-site checks as part of anti-dumping investigations). Unlike the EU or NAFTA, joint teams to ensure compliance and control of violations have not been widely used. Instead, ASEAN national authorities must rely on the verification and analysis of other ASEAN national authorities to determine whether AFTA`s measures, such as the rule of origin, are being complied with. Differences of opinion may arise between national authorities.

Again, the ASEAN secretariat can help resolve a dispute, but it has no right to resolve it. Meanwhile, FOIP`s economic dimensions have remained secondary, ranging from modest investments and a plan to exclude China from supply chains to rating infrastructure projects, often funded by China. The U.S. approach, ATAGonized ASEAN and other East Asian friends and forced countries to make unnecessary and risky political decisions. Vietnam, Indonesia and other ASEAN countries are benefiting from the free trade agreement with China by allowing them to offer lower wages and attract foreign investment to both the Chinese market and global destinations such as the EU and the United States.

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