ASEAN - China Free Trade Area

      ASEAN-China Free Trade Area (ACFTA) is a free trade area between the Assocation of Southeast Asian Nations and the People's Republic of China. The framework agreement was signed in Phnom Penh, Cambodia on 4 November 2002 by eleven heads of government. The framework agreement was came into effect on 1 January 2010 as ASEAN-China Free Trade Area. In the framework agreement, all of the members agreed to increase their economy cooperation with:

• invalidation of tariff and not tariff barriers in trade transactions
• progressive liberalization of goods and services
• build a competitive and open investment regime in order of ACFTA

        This free trade area are the third largest trade volume after the European Economic Area and the North American Free Trade Area. The agreement reduced tariffs on around 7000 products categories or 90 percent of imported goods to zero. There are China and the six members of ASEAN which is already take the effect of the reduction: Brunei Darussalam, Indonesia, Malaysia, Singapore, Thailand, and Philippines. The other four countries will join the suit in 2015. All the members in the agreement would like to could identify ways in which the ACFTA could assist domestic economic reforms in all of the participating countries.

              Indonesia as one of the member of the free trade agreement is look upon this opportunity to increase their numbers of entry of goods to China market.With regard to the Indonesia-China trade relationship, the tariff barriers are actually being lowered and eliminated since 2005. However, this has not necessarily been in line with the improvement of Indonesia’s trade performance. In the beginning this free trade agreement was made anxiety in Indonesia. As you know, even prior to the implementation of this free trade agreement, the Indonesian market had been flooded by cheap, often illegal, imports from China. Even though the agreement involves trade with ASEAN, the effects for the countries still receives little attention.  When Indonesia products was hard to compete with imports from China that sell a lower prices with reasonable quality, it made anxiety situation in Indonesia companies. Some efforts was needed to made Indonesia products can compete with China imports. 

Reference:

http://www.hukumonline.com/klinik/detail/lt4b04bef2aa8ee/dasar-hukum-pemberlakuan-acfta

http://en.wikipedia.org/wiki/ASEAN%E2%80%93China_Free_Trade_Area#Tariffs
http://www.thejakartapost.com/news/2011/04/25/the-pain-gain-acfta.html