The trade bloc is almost entirely a duty-free region for most products.
ASEAN member countries have made significant progress in lowering intra-regional tariffs through the Common Effective Preferential Tariff (CEPT) scheme for AFTA. More than 99% of the products in the CEPT Inclusion List (IL) of ASEAN-6, composed of Brunei Darussalam, Indonesia, Malaysia, the Philippines, Singapore and Thailand, have been brought down to the 0-5 percent tariff range.
ASEAN’s newer members, namely Cambodia, Laos, Myanmar and Vietnam, are not far behind in the implementation of their CEPT commitments with almost 80% of their products having been moved into their respective CEPT ILS. ASEAN member countries have also resolved to work on the elimination of non-tariff barriers which includes the process of verification and cross-notification.
The ASEAN region has been growing considerably in importance as a trade bloc and is now the third largest in the world after the European Union and the North American Free Trade Agreement. Most import and export duty taxes on items traded between the member countries, have been lifted over the years making it an almost duty free region.
Some important free trade agreements signed by ASEAN include one with China that has effectively done away with tariffs on nearly 90% of imported goods; one with India through which import-export duties on over 4,000 products have been abolished; and a combined FTA with Australia and New Zealand that has eliminated tariffs on 67% of all traded products between the regions and covers all sectors including goods, services, investment and intellectual property rights. ASEAN also has in place a series of comprehensive economic partnerships with Japan and an FTA with South Korea.
Overall, ASEAN countries have concluded six free trade agreements with seven of the region’s main trading partners – Australia and New Zealand, China, India, South Korea, Japan and Hong Kong. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is one of the largest free trade agreements in the world.
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