Free Trade Agreement (FTA)

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Brief background of FTA A Free Trade Agreement (FTA) is a legally binding agreement between two or more countries to liberalize trade and bring about closer economic integration. The purpose of FTA is to reduce or eliminate barriers to trade, and facilitate the cross border movement of goods and services between the territories of the Parties. FTA covered three areas of trade liberalization which are trade in goods, trade in service and investments. These three elements compose FTA framework. For trade in goods, exporters or importers can remove tariffs and non-tariff barriers such as import bans and quota shares based on the free trade agreement. For trade in service, FTAs provide business chances for enterprise to enhance their market access.…show more content…
And now it has extended into manufacturing not only their own products but also building the good quality labels and exporting them to region markets. . In just a few short month from the period that they started their producing operations, Kleen-park began to export disposable wet wipes to the Philippines. In addition, it also has expanded its markets to Vietnamese, Malaysian and Indonesia. Kleen-park really got good experience when exporting to those ASEAN countries, especially using the rational tariff rate under AFTA. However, with the special tariff rate, Kleen-park is trying to increase the range of product they export. Hence, AFTA help Kleen-park to become more competitive through tariff…show more content…
Singapore companies cannot be competitive without developing international business. Company activity inputs may involve international business activity even if outputs do not come from the home country. However, AFTA provide a potential opportunity for Singapore companies to compete on a more level business environment with bigger and more established foreign competitors, enabling them to gain new location in overseas markets. Singapore enterprises can easily achieve an agreement about cooperation with foreign enterprises under the AFTA. For example, if a Singapore investor wants to open a sub-company in Indonesia, but he’s not familiar with local law, culture and etc. So he need to find a local business partner help him based on getting mutual benefits and coordinate with some related department in Indonesia. With AFTA, the tariff barriers and non-tariff barriers can be eliminated. Only simple procedures and less money are needed for him to enter Indonesia market, and he and business partner can achieve a win-win principle. For some SMES which stands for Small and medium-sized enterprise, business opportunities are also provided to them by AFTA. Hence, AFTA provides business opportunities to every

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