MALAYSIA TRADE WITH ASEAN COUNTRY

BY # Nur Farah Nabilah, Nur Adiilah DAN Rafidah 

Association of Southeast Asian Nations (ASEAN) was established on August 1, 1967 by the Bangkok Declaration signed by the five countries of the region, including Singapore, Malaysia, Thailand, Philippines and Indonesia. ASEAN member states increased to 11 members when Brunei joined in 1984, Vietnam in 1995, Laos and Myanmar in 1997 and Cambodia in 1999.

In that declaration, there are have a list of economic functions and social to be achieved, which is to stimulate economic growth, social progress and cultural development of the region, encourage peace and stability region, encourage collaboration and always overcome together in issues related, providing convenience in the form of training and research facilities in the education, technical and administrative expertise and encourage research in Southeast Asia.

In 1997, Preferential Trading Arrangement (PTA) was created with the aim to increase trade in the ASEAN region. However, based on studies that have been conducted have indicated that the effort has failed to provide the desired performance. Besides the issue of the PTA, the establishment of the North American Free Trade Agreement (NAFTA) and the European Union (EU) at that time also raises questions about the inclusion of ASEAN exports to the US north and the European market. In addition, with increase competition to attract foreign direct investment (FDI) and the emergence of China as a global economic power new, all these factors have led to the idea of creating a free trade area (AFTA) to protect the market and the industries respectively to get benefit together.

AFTA is a free trade area between ASEAN countries which is Malaysia, Singapore, Thailand, Philippines, Indonesia, Vietnam, Laos, Myanmar, Cambodia and Brunei. AFTA agreement was decided on 28 January 1992 at the 4^th of the Summit of ASEAN. AFTA is an effort to ease trade barriers through the abolition of tariff and non-tariff trade barriers (NTBs) in order to get direct benefits.

Common Effective Preferential Tariff, CEPT is a cooperation among the ASEAN countries to reduce the rate of tariff and eliminate all non-tariff trade barriers (NTBs) and quantitative restrictions. This scheme is a key mechanism in the realization of AFTA. All ASEAN members are eligible to enjoy CEPT duties to meet the specified requirements. CEPT approach is based on the reciprocal (reciprocal) and by sector, this makes this approach more widely to be used than the product by the PTA.

Among the obstacles faced by ASEAN, the competition in the globalization between a member of ASEAN states because there are some member states that have weaknesses in terms of technology and lack of internet network and others. Language is also a barrier to member countries to achieve globalization because English is a Lingua Franca. The challenges in terms of the economy, the collapse of the world market demand for source material, namely tin and natural rubber economic development in ASEAN stunted.

Malaysia plays many roles and contributed many ideas in creating a brilliant strategy to fix the economy. All efforts made by Malaysia have developed many positive effects that can give encouragement and opportunity for regional countries in the process of improving the condition of the economy.