Generally, Origin analysis as one way to

Generally,
free trade is a situation where a government does not interfere to influence
through quotas or duties what its citizens can buy from another country or what
they can produce and sell to another country. Nowadays, Asia has become the
“global factory”. The region with the largest economies such as Peoples’ Republic
of China, India and Japan and the Association of Southeast Asian Nations’
(ASEAN) economies have become key players in Free Trade Agreement activity. The
importance of FTAs to trade at the economy level has also increase as
reflecting the growth of FTAs.

In
addition, with Free Trade Agreements (FTAs) ASEAN companies have great
opportunities. Agreeing FTAs will give a company advantage to pay lower duty
fees. This is because of management in the supply chain and transaction
complexity. In fact, using FTAs will give more opportunities to businesses but
at the same time it also gives pressure. At the same time, all trade agreements
share one similarity which is they expose a company to potential trade
compliance issues. If companies cannot pay for penalties, they will face the
delays or reputational damages. These are just a few effects of violations of
trade regulations.

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Companies
are turning into automation of FTA Rule of Origin analysis as one way to ensure
compliance of trade regulation and maintain fully auditable records of every
transaction. These business processes are also proactive and gives “right first
time” information. Compliance professionals focus on looking for new FTA
benefit opportunities in new trade lanes, rather than addressing issues with current
product or trade lane shipments.

Besides,
Asia Pacific region led by the ten members of the Association of Southeast
Asian Nations (ASEAN) is one part of the world looking to take a leadership
role. In 2014, its total GDP reached US$2.6tr and that positioning it the
seventh largest economy in the word, while its total trade was US$2.5tr and the
majority of it was intra-ASEAN trade. In the near future, Asia has a few number
of new and existing trade deals in the works to increase imports and exports. All
of the trade deals are created to increase further growth and cooperation
across the region. As example, China’s One Belt, One Road (OBOR), is an
economic and diplomatic initiative that could improve trade. China’s OBOR
initiative objective is to improve trade relationship with ASEAN, Middle Eastern,
and European countries. By building high-speed trains and highways through international
geographic corridors, it can connect China to the world.

According
to Reuters, when talking about trade deals, China, Japan and South Korea are
already discussing a trilateral trade agreed to refuse all forms of
protectionism, and they are taking a stronger stand than G20 major economies
against any US protectionist policies. Although TPP (excluded China) was
negotiated, one more extensive trade agreement has been under discussion. Since
2012, the Regional Comprehensive Economic Partnership (RCEP) agreement has been
negotiated by China and 15 other Asia Pacific Rim countries. RCEP consist of
ten members of ASEAN. They are Vietnam, Thailand, Singapore, Philippines,
Myanmar, Malaysia, Laos, Indonesia, Cambodia and Brunei. It’s also includes China,
India, Japan, South Korea, Australia and New Zealand, who are their trading
partner. Total trade with China amounted to US$345billion in 2015, showing 15.2
per cent share of total ASEAN trade in that year, according to data provided by
the ASEAN website. RCEP could transform the region into a market representing
US$22tr in economic activities and of the world’s population if it is implemented.

Asia’s
trade will continue to expand and grow if they are in the right trends. To
promote international trade and create a region that is a true global trade
leader, this region has a number of new and existing trade agreements in right place.
By getting the basics right in an easy and timely manner to maximize the cost
benefits of FTA usage, companies will get advantages from modernization of
their own trade processes.