Afta - Its Impact to Vietnam Economy

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Date Submitted: 06/30/2010 06:21 PM

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CONTENT

1. The life circumstances and goals of the AFTA

2. AFTA conduction in Vietnam

a. Tariff Reducing Program

b. Non-Tariff Measure Program

a. Tariff system’s improvement

3. Impacts of AFTA on Vietnam’s economy

a. Impacts on business

b. Impacts on foreign investment attraction

c. Impacts on producing structure:

1. The life circumstances and goals of the AFTA

At the beginning of the year 1990s, cold war ended causing many important changes in the international political and economic environment. At the final of cold war, the position of ASEAN in the area and even in the world was lowered. That means the United States, China, Russia would reduce security enforcement and increase economic assistance for ASEAN. This new policy accompanied with passive changes of The Indochinese Peninsula created not only new opportunities but also new challenges. They are:

Appearance of Area Corporation organizations such as EU, NAFTA made ASEAN worried about a closed commercial block that surely make a lot of difficulties for ASEAN countries’ goods to get into these large markets.

Open-policy and investment incentive for Foreign Investors accompanied with comparative advantage about natural and labor resources making China, Russia, and Eastern Europe countries are more attractive investment market than ASEAN.

In order to cope with above challenges, in ASEAN summit in Jan 1992 at Singapore, Asian Free Trade Area, for short AFTA was established. The first interest for ASEAN countries from AFTA is reduce import duty to 0.5% and reduce gradually non-tariff barrier during 15 years from 01/01/1993 for industrial and agriculture products.

Main purposes of AFTA:

- Establish preferential investment commercial environment based on the abolishment of tariff-barrier and non-tariff barrier

- Attract foreign investment by offering a consistent commercial market.

- Abolish trade and investment barrier between countries in Area for ASEAN countries easier to...