What is the difference between an FTA and the ASEAN Economic Community (AEC)?
01/10/2023 67Question: What is the difference between an FTA and the ASEAN Economic Community (AEC)?
Answer:
The ASEAN Economic Community (AEC) was established in December 2015 between 10 ASEAN member countries (including Vietnam) based on economic cohesion agreements that have existed for nearly 50 years of ASEAN.
AEC aims to build a unified market, a common production base and other development goals (competition, creativity, comprehensive development...). This goal is much broader than the usual goal (trade liberalization and other issues serving trade liberalization) of FTAs.
In terms of content, the AEC is not an Agreement but a collection of many Agreements, Agreements, and Policy Declarations... that Member countries have previously agreed/signed within the framework of ASEAN as well as after this (after the AEC was established). Among them are agreements that are FTAs in nature (for example, the Trade in Goods Agreement - ATIGA, eliminating almost all tariffs for goods circulating within ASEAN). However, besides that, the AEC also has many Agreements and Declarations that are only cooperative, encouraging, and promoting common actions without binding commitments or removing specific trade barriers like FTAs.
Center for WTO and International Trade