ASEAN has a similar free trade agreement with India, which is being phased in and is reducing tariffs to 90% of all goods traded between ASEAN and India. In 2016, import and export duties on more than 4,000 products will be abolished. This will have a similar effect to that of the free trade agreement with China, as it opens the Indian consumer market to ASEAN manufactured goods. Indeed, India has a considerable middle-class consumer market in its own right of about 250 million, although it is not expected to grow as rapidly in the short term as China. The ASEAN-India free trade agreement will also be extended to services, discussions are already at an advanced stage and a conclusion is expected before the end of the year. For more details on the ASEAN-India Free Trade Agreement, click here. The RCEP will require the ratification of 6 of the 10 ASEAN member states and 3 of the five ASEAN-FTA partners for the agreement to enter into force. Therefore, the timing of implementation depends on the internal processes for ratification of the agreement by RCEP partners. 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. An Introduction to Tax Treaties Across Asia In this issue of Asia Briefing Magazine, we examine the different types of trade and tax agreements that exist between Asian nations. These include bilateral investment agreements, bilateral double taxation agreements and free trade agreements that cover all companies directly active in Asia. In addition to the China-India free trade agreement, ASEAN also has a combined free trade agreement with Australia and New Zealand, known as AANZFTA. The agreement, which will also be phased in, has eliminated tariffs on 67% of all products traded between regions and will be extended to 96% of all products by 2020. This is the first time ASEAN has entered into negotiations on a free trade agreement covering all sectors, including goods, services, investment and intellectual property rights, making it the most comprehensive trade agreement ever negotiated by ASEAN. For more details on this agreement, click here. 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.
Efforts to close the development gap and expand trade among ASEAN members are essential elements of the political debate.