Taking Advantage of ASEAN’s Free Trade Agreements

This guidebook, produced by the International Institute for Sustainable Development (IISD) and the ASEAN Business Advisory Council (ASEAN BAC), provides practical guidance for small and medium-sized enterprises (SMEs) to utilize free trade agreements (FTAs) within and outside the Association of Southeast Asian Nations (ASEAN). It details the mechanisms of internal agreements like the ASEAN Trade in Goods Agreement (ATiGA) and external partnerships with China, Japan, Korea, India, Australia, and New Zealand, while providing country-specific export procedures and support facilities for ASEAN member states.

• ASEAN SMEs are underutilizing free trade agreements due to a lack of relevant business information and financing barriers. A 2011-2012 survey indicated that only 29 per cent of ASEAN businesses used FTA provisions, with the rate being even lower among SMEs.
• The ASEAN Trade in Goods Agreement (ATiGA), effective May 17, 2010, mandates the elimination of import duties on most goods traded between member states. The ASEAN-6 (Brunei, Indonesia, Malaysia, Philippines, Thailand, and Singapore) were required to meet this by 2010, while the CLMV countries (Cambodia, Lao PDR, Myanmar, and Vietnam) have until 2015, with a possible extension to 2018.
• Most ASEAN-led FTAs utilize a Regional Value Content (RVC) threshold of 40 per cent to determine if a product 'originates' from a member country and is thus eligible for preferential treatment. The ASEAN-India Free Trade Area (AIFTA) is an exception, requiring an RVC of 35 per cent.
• The ASEAN-China Free Trade Area (ACFTA) covers 90 per cent of the value of goods traded between China and ASEAN. While the ASEAN-6 have already implemented tariff reductions, the CLMV countries have until 2015 to meet the agreement's requirements.
• The ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA), effective January 1, 2010, is described as the most comprehensive FTA ASEAN has concluded. By 2020, more than 90 per cent of trade between these parties will be tariff-free, with Australia and New Zealand committing to eliminate all import tariffs on ASEAN goods by that date.
• In Indonesia, MSMEs represent over 99 per cent of all businesses and 97 per cent of employment, yet they account for less than 20 per cent of non-oil exports, partly because many operate in the informal sector with limited finance access.
• Cambodian SMEs are primarily concentrated in food, beverages, and tobacco products, with many operating in the informal sector. A 2010 study found that less than half of 504 surveyed Cambodian SMEs had an active bank account.
• In Myanmar, SMEs account for 70 per cent of total employment and 90 per cent of all businesses, with a heavy concentration (60 per cent) in the food-processing industry.
• The Philippines' MSMEs make up 99.7 per cent of all businesses and 70 per cent of employment. The government's MSME Development Plan for 2011 to 2016 focuses on improving the business environment, productivity, and access to finance and markets.
• Singapore's economy is dominated by the services sector (68.5 per cent of GDP), and SMEs represent 99 per cent of all enterprises as of 2012, employing seven out of every 10 workers.
• Thai SMEs account for 42 per cent of national GDP and 99.5 per cent of all businesses, with 28.4 per cent of these SMEs exporting their products overseas.
• Vietnam's SME population grew from 18,883 in 2000 to nearly 333,835 by the end of 2011, with micro enterprises making up 69.8 per cent of this group.

APA

McClanahan, P., Chandra, A., Hattari, R., & Vis-Dunbar, D. (2014). Taking Advantage of ASEAN’s Free Trade Agreements. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/ASEAN_guidebook.pdf

Chicago

McClanahan, Paige, Alexander Chandra, Ruben Hattari, and Damon Vis-Dunbar. Taking Advantage of ASEAN’s Free Trade Agreements. International Institute for Sustainable Development, 2014. https://www.iisd.org/system/files/publications/ASEAN_guidebook.pdf.

Wikipedia

{{cite report |last1=McClanahan |first1=Paige |last2=Chandra |first2=Alexander |last3=Hattari |first3=Ruben |last4=Vis-Dunbar |first4=Damon |title=Taking Advantage of ASEAN’s Free Trade Agreements |publisher=International Institute for Sustainable Development |date=January 2014 |url=https://www.iisd.org/system/files/publications/ASEAN_guidebook.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{mcclanahan2014taking, author = {McClanahan, Paige and Chandra, Alexander and Hattari, Ruben and Vis-Dunbar, Damon}, title = {{Taking Advantage of ASEAN’s Free Trade Agreements}}, institution = {International Institute for Sustainable Development}, year = {2014}, month = jan, url = {https://www.iisd.org/system/files/publications/ASEAN_guidebook.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }