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Asean Free Trade Agreements With Other Countries

Vietnamese Prime Minister Nguyen Xuan Phuc said he was pleased with the agreement and said: “I am very pleased that after eight years of difficult negotiations, we are ending the Negotiations on the Comprehensive Regional Economic Partnership (RCEP) today and formally signing them at the 37th ASEAN Summit.” The pact reduces tariffs, opens up the services sector and establishes common rules on trade within the bloc. The agreement covers trade, services, investment, e-commerce, telecommunications and copyright. ASEAN, the association of Southeast Asian nations, is gaining importance as a trading bloc and is the third largest in the world after the European Union and the North American Free Trade Agreement. It includes the Asian Tigers of Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam (ASEAN 6) with smaller players such as Brunei, Cambodia, Laos and Myanmar, with a total GDP of $2.31 trillion (2012) and hosts about 600 million people. 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. For international companies, the possibility of obtaining ASEAN status and the benefits of the free trade agreement that the region has is simple: all that is needed is for the foreign investor to set up a subsidiary in one of the ASEAN countries. It is just a geographical qualification.

To this end, and as the region – and the countries of China and India – is immense, Singapore has become an Asian regional hub to reach ASEAN and beyond, and provide subsidiaries throughout the region to management, finance and other support services. Relations with Beijing were severed earlier this year after Canberra called for an international investigation into the source of the coronavirus, which first broke out in late 2019 in the central Chinese city of Wuhan. The ASEAN-India trade agreement came into force on 1 January 2010. The signing of the agreement paved the way for the creation of one of the world`s largest free trade area markets and created opportunities for more than 1.9 billion people in ASEAN and India, with a total GDP of $4.8 trillion. AIFTA is setting up a more liberal and easier market access and investment system between Member States. The agreement provides for tariff liberalization of more than 90% of the products traded between the two dynamic regions. As a result, tariffs for more than 4,000 product lines were agreed to be abolished by 2016 at the earliest.