The ASEAN Trade in Goods Agreement (ATIGA) is a free trade and investment agreement that has provided investors with a unique set of guarantees designed to stimulate foreign direct investment and the movement of factories within the Asian region.
It has increased ASEAN’s competitive edge as a production base in the world market primarily through the elimination, within ASEAN, of tariffs and non-tariff barriers.
The primary mechanism for achieving such goals has been the Common Effective Preferential Tariff scheme, which established a phased schedule starting in 1992 with the goal to increase the region’s competitive advantage as a production base geared for the world market.
Now with the final phase of the tariffs phase-out set for January 1, 2015 many are having buyer’s remorse amid last minute concerns that foreign ASEAN goods and services may flood the domestic market, leading to a glut and threaten the economic stability of the domestic retail market.
However, Vietnam senior government officials have moved to quell the anxiety as it is not a justifiable concern. In fact, the reduction of tariffs under the ASEAN Free Trade Agreement (FTA) have been taking place since 1999, they point out, which has resulted in tremendous benefits for economic growth in Vietnam. In the 2012-2014 period, Vietnam cut 7,000 tax lines to zero % and 2,000 tax lines to 5%.
