The Southeast Asia Free Trade Agreement (SAFTA) is a regional agreement aimed at reducing trade barriers and promoting economic cooperation among member countries. It was established in 1992 with the signing of the ASEAN Free Trade Area (AFTA) agreement, which includes all ten ASEAN member states.
SAFTA was designed with the objectives of promoting trade liberalization, improving economic growth, and enhancing regional integration and cooperation. The agreement aimed at reducing tariffs and other barriers to trade between member countries, which could lead to an increase in trade among member countries.
Under SAFTA, ASEAN countries have committed to reducing their tariffs on goods traded within the region. By 2015, most ASEAN countries had already eliminated tariffs on more than 99% of goods traded within the region, with the exception of sensitive items such as rice, sugar, and tobacco.
SAFTA has been successful in promoting trade among ASEAN countries. The ASEAN region has become a major hub for global trade, with ASEAN countries exporting more goods and services than any other region in the world except for the European Union.
The benefits of SAFTA are not just limited to increased trade. The agreement has also led to the creation of new jobs, the development of new industries, and the growth of small and medium-sized enterprises (SMEs) in the region.
However, SAFTA is not without its challenges. Some critics argue that the agreement benefits larger countries in the region, such as Indonesia and Thailand, more than smaller countries like Laos and Cambodia. Others argue that the agreement has not gone far enough in reducing non-tariff barriers to trade, such as bureaucratic procedures and technical regulations.
Despite these challenges, SAFTA remains an important agreement for promoting economic growth and regional cooperation in Southeast Asia. As ASEAN countries continue to work towards deeper economic integration, SAFTA is expected to play an important role in shaping the region`s economic future.