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Determinants of AFTA Members’ Trade Flows and Potential for Trade Diversion

One of the most important RTA in Asia and the Pacific is the Association of South-East Asian Nations (ASEAN) Free Trade Area, also referred to as AFTA, which was aimed at eliminating tariff barriers among member countries through the Agreement on the Common Effective Preferential Tariff (CEPT) scheme. It applied to all products from ASEAN member countries defined as those that had at least 40% ASEAN content. More than 99 percent of the products in the CEPT Inclusion List (IL) of ASEAN-6, comprising Brunei Darussalam, Indonesia, Malaysia, the Philippines, Singapore and Thailand, have now been brought down to the 0-5 percent tariff range. ASEAN new members including Cambodia, Lao PDR, Myanmar and Vietnam have also implemented their commitment on the CEPT scheme with 80 percent of their products having been moved into their CEPT Inclusion List

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