Free Trade Agreement

Topics: Economic integration, Free trade, Free trade area Pages: 7 (2333 words) Published: November 15, 2013
Content Page

1. Executive Summary………………………………………………………………... 3 2. Brief Background Information on Free Trade Agreement……………………… 4 3. Brief Overview of ASEAN-Korea Free Trade Agreement (AKFTA)………..…. 4 4. Benefits of AKFTA on Companies in Singapore

a. Economic Benefits – Trade in Goods and Services……………..………… 5 b. Intellectual Property Protection………………………………………………. 7 c. Human Resource Management and Development………………………… 8 5. Challenges Faced By Companies in Singapore regarding to AKFTA a. Lack of Information and Knowledge on AKFTA……………………..…. 9 b. Rules of Origin…………………………………………………………….. 10 6. Conclusion…………………………………………………………………………. 11 1. Executive Summary

This report was written to evaluate the benefits and challenges of ASEAN-Korea Free Trade Agreement (AKFTA) from Singapore’s perspective. Free trade agreements are treaties signed between two or more nations in order to create free trade areas between member countries. The free trade agreement that we will be focusing in this report would be the AKFTA. Research has shown that the three benefits that AKFTA has brought to companies in Singapore are economic benefits (trade in goods and services), intellectual property protection as well as human resource management and development. Two challenges that are faced by companies in Singapore are the lack of awareness and knowledge on AKFTA followed by the Rules of Origin (ROO). In conclusion, it can be seen that despite all the various benefits that AKFTA can provide for the companies in Singapore, all these would not be applicable if they do not know about AKFTA or do not have the knowledge on how to utilize it in their business. Hence, it is important that there are information-services that are capable of informing people about AKFTA as well as other FTAs that are applicable to them. On top of that, instructions on how to utilize these FTAs should also be specifically stated down on a proper channel such as a reliable official website that Singapore companies can refer to. 2. Brief Background Information on Free Trade Agreement

Free trade agreements (FTAs) are treaties that are discussed and signed between two or more countries in order to establish a free trade area between member countries. Within this free trade area, trading of goods and services can be commenced across national, regional and global borders without tariffs or other trade barriers. In addition, issues such as competition policy, commitments on services, government procurement, customs cooperation, foreign investment, intellectual property rights and other issues that will assist trade are addressed by modern FTAs. Usually one of the terms included in these FTAs would be that the member countries are required to impose a standardized tariff (common external tariff) on trade with non-member countries. This is to encourage and “push” greater trade between member countries. 3. Brief Overview of ASEAN-Korea Free Trade Agreement (AKFTA) Korea is the second Dialogue Partner with whom ASEAN has forged a free trade agreement. The Framework Agreement was signed in 2005 by ASEAN and Korea. Thereafter, ASEAN and Korea signed four other agreements that legally established the ASEAN-Korea Free Trade Agreement (AKFTA). This agreement came into effect with Singapore in 2006. ASEAN and Korea maintain close political collaboration on bilateral, regional, and international issues through existing instruments such as ASEAN-ROK Summit, ASEAN Regional Forum (ARF), East-Asia Summit (EAS), ASEAN Plus Three (APT) and Ministerial Meetings. The results of the AKFTA can be seen through trade volume in ASEAN, which has significantly increased by over 23% in the first year period of ASEAN-Korea Trade in Goods implementation. Similarly, bilateral trade volume between Korea and ASEAN nearly tripled going from 2001-2010, where the volume increased from US$32 billion to US$98.1 billion. Parties who are involved in the AKFTA are Brunei Darussalam, Cambodia, Indonesia, Lao...
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