The creation of the ASEAN Free Trade Area (AFTA) was agreed at the 1992 ASEAN Summit in Singapore. The main objectives of the AFTA are to:
- create a single market and an international production base;
- attract foreign direct investments; and
- expand intra-ASEAN trade and investments.
The liberalisation of trade in the region through elimination of both intra-regional tariffs and non-tariff barriers had contributed towards making ASEAN's manufacturing sectors more efficient and competitive in the global market. As a result, consumers are able to source goods from the more efficient producers in ASEAN, thus creating a robust intra-ASEAN trade.
Effective 1 January 2010, Malaysia with five other ASEAN Member States (which are Brunei Darussalam, Indonesia, the Philippines, Singapore and Thailand) is a complete free trade area. These countries have eliminated import duties on 99 per cent of products in the Inclusion List and AFTA is almost completely realised among the ASEAN-6. On average, today ASEAN 6 has 99.20% of tariff lines in the Inclusion List at 0%. Only 0.35% or less than 1% of the Tariff Lines in the Inclusion list has import duties.
2.1 MOST-FAVOURED NATIONS (MFN) TARIFF BY WTO
- MFN tariff is a normal non-discriminatory tariff charged on imports (excludes preferential tariffs under free trade agreements and other schemes or tariffs charged inside quotas).
- For Malaysia, MFN tariffs are applied to all WTO Member Countries based on the listing contained in the Customs Duties Order(s).
- Under the WTO Agreements, WTO Members should not discriminate between their trading partners. According to the MFN principle, any advantage (such as a lower tariff on one of its products), favour, privilege or immunity granted by a Member to any product originating in or destined for any other country shall be accorded immediately and unconditionally to the like products of all Members. Hence, the principle requires each Member to extend to all other WTO Members treatment no less favourable than the treatment it accords to imports from any other country.
- The MFN principle embodied in the WTO Agreements in Article I of the GATT 1994, Article II of the General Agreement on Trade in Services (GATS) and Article 4 of the TRIPS Agreement.
- Tariff Nomenclature of Malaysia
- Malaysia's MFN Tariffs (WTO)
- Customs Order
2.2 ATIGA TARIFF
- Tariff Nomenclature of Malaysia
- CUSTOMS DUTIES (GOODS OF ASEAN COUNTRIES ORIGIN)
(ASEAN HARMONISEDTARIFFNOMENCLATUREANDASEANTRADEINGOODSAGREEMENT)ORDER2022 - ASEAN Free Trade Area (AFTA)
- Customs Duties Order 2022, 1 June 2022
2.3 PREFERENTIAL TARIFF OF AGREEMENTS OF ASEAN WITH ITS DIALOGUE PARTNERS
- ATIGA (ASEAN Trade in Goods Agreement)
- ACFTA (ASEAN-China Free Trade Agreement)
- AKFTA (ASEAN-Korea Free Trade Agreement)
- AJCEP (ASEAN-Japan Comprehensive Economic Partnership)
- AANZFTA (ASEAN-Australia-New Zealand Free Trade Agreement)
- AIFTA (ASEAN-India Free Trade Agreement)
- ASEAN-Hong Kong Free Trade Agreement (AHKFTA)
- Regional Comprehensive Economic Partnership (RCEP)
- Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)