International Trade and Free Trade Area

AFTA (ASEAN Free Trade Area) ASEAN Free Trade Area (AFTA) is a trade bloc agreement by the Association of Southeast Asian Nations supporting local manufacturing in all ASEAN countries. The ASEAN Heads of State and Government decided to establish an ASEAN Free Trade Area or AFTA in 1992.

The objective of AFTA is to increase the ASEAN region’s competitive advantage as a production base geared for the world market. A vital step in this direction is the liberalization of trade through the elimination of tariffs and non-tariff barriers among the ASEAN members.This activity has begun to serve as a catalyst for greater efficiency in production and long-term competitiveness. Moreover, the expansion of intra-regional trade is giving the ASEAN consumers wider choice and better quality consumer products. The agreement was signed on 28 January 1992 in Singapore.

When the AFTA agreement was originally signed, ASEAN had six members, namely, Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand. Vietnam joined in 1995, Laos and Myanmar in 1997 and Cambodia in 1999.AFTA now comprises ten countries of ASEAN. All the four latecomers were required to sign the AFTA agreement in order to join ASEAN, but were given longer time frames in which to meet AFTA's tariff reduction obligations.

The primary goals of AFTA seek to: ?Increase ASEAN's competitive edge as a production base in the world market through the elimination, within ASEAN, of tariffs and non-tariff barriers; and ? Attract more foreign direct investment to ASEAN. ?To establish free trade area in the member countries. To reduce tariff of the products produced in ASEAN countries The primary mechanism for achieving the goals given above is the Common Effective Preferential Tariff (CEPT) scheme, which established a schedule for phased initiated in 1992 with the self-described goal to increase the "region’s competitive advantage as a production base geared for the world market". Member Countries are working towards the total elimination of import duties on all products to achieve the ultimate objective of a free trade area.The AFTA Council has agreed that the target dates to achieve this objective will be in 2015 for the six original ASEAN Member Countries and 2018 for the newer Members. This move is expected to create an integrated market where there is free flow of goods within the region.

Total elimination of import duties shall achieve a maximum impact in enhancing the ASEAN region’s economic competitiveness vis-a-vis the rest of the world. EU (European Union) The European Union (EU) is an economic and political union or confederation of 27 member states which are located primarily in Europe.The EU traces its origins from the European Coal and Steel Community(ECSC) and the European Economic Community (EEC), formed by six countries in 1958. In the intervening years the EU has grown in size by the accession of new member states, and in power by the addition of policy areas to its remit. The Maastricht Treaty established the European Union under its current name in 1993.

The latest amendment to the constitutional basis of the EU, the Treaty of Lisbon, came into force in 2009.The EU operates through a system of supranational independent institutions and intergovernmental negotiated decisions by the member states. Important institutions of the EU include the European Commission, the Council of the European Union, the European Council, the Court of Justice of the European Union, and the European Central Bank. TheEuropean Parliament is elected every five years by EU citizens. The EU has developed a single market through a standardised system of laws which apply in all member states.

Within the Schengen Area (which includes EU and non-EU states) passport controls have been abolished.EU policies aim to ensure the free movement of people, goods, services, and capital, enact legislation in justice and home affairs, and maintain common policies on trade, agriculture, fisheries and regional development. A monetary union, the euro zone, was established in 1999 and, as of January 2012, is composed of 17 member states. Through the Common Foreign and Security Policy the EU has developed a limited role in external relations and defence.

Permanent diplomatic missions have been established around the world and the EU is represented at the United Nations, the WTO, the G8 and the G-20.With a combined population of over 500 million inhabitants, or 7. 3% of the world population, the EU generated a nominal GDP of 16,242 billion US dollars in 2010, which represents an estimated 20% of global GDP when measured in terms of purchasing power parity. Member states of the EU: 1. Austria 2. Belgium 3.

Bulgaria 4. Cyprus 5. Czech Republic 6. Denmark 7. Estonia 8. Finland 9.

France 10. Germany 11. Greece 12. Hungary 13.

Ireland 14. Italy 15. Latvia 16. Lithuania 17. Luxembourg 18.

Malta 19. Netherlands 20. Poland 21. Portugal 22. Romania 23.Slovakia 24.

Slovenia 25. Spain 26. Sweden 27. United Kingdom Objectives of the EU * Setting up a common market * Continuous & balanced expansion * Closer relations between the member states * the promotion of peace and the well-being of the Union? s citizens * an area of freedom, security and justice without internal frontiers * sustainable development based on balanced economic growth and social justice * a social market economy - highly competitive and aiming at full employment and social progress * a free single market ACTIVITIES OF EU Elimination of custom duties, quantitative restrictions with regard to export & imports. * Establishment of a common custom tariff &commercial policy.

* Abolition of all obstacles for movement of persons, services & capital. * Application of programmes in order to coordinate the economic policies. The World Trade Organization (WTO) is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade (GATT), which commenced in 1948.

The organization deals with regulation of trade between participating countries; it provides a framework for negotiating and formalizing trade agreements, and a dispute resolution process aimed at enforcing participants' adherence to WTO agreements which are signed by representatives of member governments and ratified by their parliaments. [4][5] Most of the issues that the WTO focuses on derive from previous trade negotiations, especially from the Uruguay Round (1986–1994).The organization is currently endeavoring to persist with a trade negotiation called the Doha Development Agenda (or Doha Round), which was launched in 2001 to enhance equitable participation of poorer countries which represent a majority of the world's population. However, the negotiation has been dogged by "disagreement between exporters of agricultural bulk commodities and countries with large numbers of subsistence farmers on the precise terms of a 'specialsafeguard measure' to protect farmers from surges in imports. At this time, the future of the Doha Round is uncertain. [6] ------------------------------------------------- Functions Among the various functions of the WTO, these are regarded by analysts as the most important: * It oversees the implementation, administration and operation of the covered agreements.

[26][27] * It provides a forum for negotiations and for settling disputes. [28][29] Additionally, it is the WTO's duty to review and propagate the national trade policies, and to ensure the coherence and transparency of trade policies through surveillance in global economic policy-making. 27][29] Another priority of the WTO is the assistance of developing, least-developed and low-income countries in transition to adjust to WTO rules and disciplines through technical cooperation and training. [30] The WTO is also a center of economic research and analysis: regular assessments of the global trade picture in its annual publications and research reports on specific topics are produced by the organization.

[31] Finally, the WTO cooperates closely with the two other components of the Bretton Woods system, the IMF and the World Bank. [28]The North American Free Trade Agreement or NAFTA is an agreement signed by the governments of Canada, Mexico, and the United States, creating a trilateral trade bloc in North America. The agreement came into force on January 1, 1994. It superseded the Canada – United States Free Trade Agreement between the U.

S. and Canada. In terms of combined GDP of its members, as of 2010 the trade bloc is the largest in the world. The North American Free Trade Agreement (NAFTA) has two supplements, the North American Agreement on Environmental Cooperation (NAAEC) and the North American Agreement on Labor Cooperation (NAALC).