Asean Trade in Goods Agreement Advantages and Disadvantages

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    The Association of Southeast Asian Nations (ASEAN) Trade in Goods Agreement (ATIGA) is a free trade agreement between the member states of ASEAN, which was signed in 2009 and came into force in 2010. The agreement aims to liberalize trade in goods among ASEAN members by removing tariff barriers and non-tariff barriers, such as import quotas and licensing requirements.

    Advantages of ATIGA

    1. Increased trade among ASEAN member states

    The main objective of ATIGA is to promote free trade within ASEAN. By removing tariffs and other trade barriers, member states have greater access to each other`s markets. This can lead to an increase in trade among ASEAN member states, which benefits all countries involved.

    2. Increased competitiveness

    ATIGA is designed to promote economic integration by increasing competitiveness among ASEAN member states. By removing trade barriers, countries can focus on producing goods and services in which they have a comparative advantage. This can lead to greater efficiency and cost savings, which can help businesses to compete more effectively in international markets.

    3. Lower prices for consumers

    ATIGA aims to reduce the cost of goods and services for consumers by removing trade barriers. With lower tariffs, businesses can offer goods at cheaper prices. This can benefit consumers, particularly those in lower-income brackets, who may not have been able to afford some products previously.

    Disadvantages of ATIGA

    1. Uneven economic development

    ATIGA may disproportionately benefit some ASEAN member states over others. This is because some member states are more developed than others, and may have a greater capacity to exploit the opportunities created by free trade. This could potentially widen the gap between the more advanced and less advanced economies within the region.

    2. Displacement of local industries

    ATIGA could lead to the displacement of local industries in some ASEAN member states. This is because the removal of trade barriers could make it easier for businesses in other countries to enter the market and compete with local producers. This could potentially lead to job losses and economic disruption.

    3. Dependence on external markets

    ATIGA may make ASEAN member states more dependent on external markets, as businesses may focus on exporting goods and services rather than meeting the needs of domestic consumers. This could potentially lead to a situation where ASEAN member states become overly reliant on international trade, which could create vulnerability to external shocks.

    Conclusion

    ATIGA has the potential to bring many benefits to ASEAN member states, including increased trade, competitiveness, and lower prices for consumers. However, there are also potential drawbacks, such as uneven economic development, the displacement of local industries, and the dependence on external markets. Future implementation of the agreement will need to carefully consider these advantages and disadvantages in order to ensure that all member states can benefit from free trade in a balanced and sustainable way.