ASEAN (Association of Southeast Asian Nations) Free Trade Area, or AFTA, supports local trade and manufacturing in all ASEAN countries and facilitates economic integration with regional and international allies. Goods originating within ASEAN are to apply a tariff rate of 0.5% while tariffs on goods entering from outside ASEAN are subject to higher tariffs.
As members of WTO, is ASEAN’s policy consistent with the most favoured nation principle?
Why are rules of origin needed in a free-trade area but not in a custom union? (10 marks)