Agreement on the Common Effective Preferential Tariff Scheme for the Asean Free Trade Area

Agreement on the Common Effective Preferential Tariff Scheme for the ASEAN Free Trade Area: An Overview

The ASEAN Free Trade Area (AFTA) has been in place since the early 1990s as a means of promoting economic cooperation and integration among the ten member countries of the Association of Southeast Asian Nations (ASEAN). One of the key elements of AFTA is the Common Effective Preferential Tariff (CEPT) scheme, which aims to reduce or eliminate tariffs on trade between ASEAN member states.

The CEPT scheme is a multilateral trade agreement that began in 1992 and has been gradually implemented over a period of several years. Under the scheme, ASEAN member states agree to reduce or eliminate tariffs on a range of goods traded between them, with the goal of eventually achieving zero tariffs on all products.

The CEPT scheme is based on a system of „tariff reduction schedules” that set out the specific tariffs that each ASEAN member state will reduce or eliminate over time. These schedules are negotiated and agreed upon by the member states, with the aim of achieving a gradual reduction in tariffs over a period of several years.

One of the key benefits of the CEPT scheme is that it helps to reduce the cost of trade between ASEAN member states, making it easier and more affordable for businesses to import and export goods across borders. This, in turn, can help to boost economic growth and development in the region.

The CEPT agreement also includes provisions for non-tariff barriers, such as standards and regulations, to be addressed in order to facilitate trade between ASEAN member states. This can help to reduce the administrative burden on businesses, making it easier for them to comply with regulations and standards in multiple countries.

Overall, the CEPT scheme is a key element of the ASEAN Free Trade Area and has been instrumental in promoting economic cooperation and integration among the member states. As the scheme continues to be implemented and tariffs are gradually reduced or eliminated, it is expected to further facilitate trade and investment in the region, fostering economic growth and development for years to come.