the ASEAN Free Trade Area (AFTA)

ASEAN established on 08 August, 1967 in Bangkok, Thailand. There are 10 members such as Brunei Darussalam, Cambodia, Indonesia, Lao, Philippines, Myanmar, Malaysia, Singapore, Thailand, and Vietnam.  Cambodia joined ASEAN on 30 April, 1999.

As today’s economy, does ASEAN Free Trade Area (AFTA council) boost Cambodia trade and foreign investment?

The purpose of the ASEAN Free Trade Area (AFTA) is to lower of intra-regional tariffs through the Common Effective Preferential Tariff (CEPT) Scheme for AFTA. ASEAN Members Countries determined to eliminate of non-tariff barriers include the process of verification and cross-notification, updating the working definition of non-tariff measures (NTMs) in ASEAN, and setting-up of a file on all NTMs maintained by member countries.

 According to the China- ASEAN Free Trade Area (FTA) has significantly promoted bilateral economic, trade and investment cooperation, China is the 4^th largest trading partner in ASEAN. Indeed, 90% of all goods trade between ASEAN and China countries has been sharply reduced to zero duties. It is a vital role in approaching forward the integration of regional economy of South East Asia.

For example, Cambodia-China trade increased $498 million in the first quarter of this year, approximately 216 percent rose from $157 million in the same period last year. Cambodia’s export to China has increased $42 million, up 342%. Cambodia exported to China such as agricultural products, rubbers, fish, timbers, and some garments and textiles. Cambodia imported from China reached $456 million, increased 208%. China exported to Cambodia such as garment raw materials, machinery, foodstuff, electronics, light products, medicines, and cosmetics.

Moreover, China’s direct investment reached $2.57 billion to ASEAN countries in 2010. Also, direct investment from ASEAN countries to China increased worth $6.32 billion, around 35.2% rose up. 

In my view, the ASEAN Free Trade Area (AFTA) will boost Cambodia trade and foreign investment.  Although the global economic crisis and increasing energy price, Cambodia economics will improve because of ASEAN-China Free Trade Area Agreement. It will tie between China and ASEAN countries, which leads to increase jobs, foreign investments, infrastructure, technology, tourism, inflation stabilities, and economics.