Background and Legal Framework

Oct 13, 2025 by talynt.org 117 views

# Legal Analysis Regarding Regional Trade Provisions within the framework of WTO: Study of Afta-China Agreement

The formation of the World Trade Organization (WTO) through Law Number 7 of 1994 concerning Ratification of the Formation of World Trade has introduced the concept of trade liberalization that emphasizes the disappearance of obstacles in international trade. This concept has broad implications for globalization that embraces various aspects of life. In the context of free trade at the regional level, although there is a better multilateral system (ie WTO), the reality is that the system is often hampered. As a result, member countries began to form regional trade blocks such as ASEAN, AFTA, and ACFTA to gain direct profits and increase more progressive regional economic growth. The increasing trend of regional trade agreements has become a significant aspect of international trade, with many countries seeking to establish closer economic ties with their neighbors.

Background and Legal Framework

Free trade agreements at the regional level, such as ASEAN China Free Trade Agreement (ACFTA), are important in facilitating economic growth in the region. ACFTA, which came into force on January 1, 2010, was regulated within the comprehensive economic cooperation framework between ASEAN and China. The agreement was signed by the President of the Republic of Indonesia on November 4, 2002, and was ratified through Presidential Decree Number 48 of 2004 and Law No. 24 of 2000 concerning International Treaties. The principles listed in the ACFTA basically reflect the values that exist in the WTO, such as Most Favored Nations, National Treatment, and quantitative restriction prohibitions.

These principles aim to create just and transparent trade between member countries, strengthen cooperation, solidarity, and respect national sovereignty. The ACFTA agreement is a significant step towards promoting economic integration in the region, and its implementation has the potential to bring about significant benefits for the member countries. The agreement has also provided a framework for the resolution of disputes between member countries, which is essential for maintaining a stable and predictable trade environment.

Theory and Analysis Approach

Analysis in this article uses theory developed by Adam Smith who focuses on justice in the protection of individuals from losses in trade transactions. This was followed by John Maynard Keynes, who emphasized the need for government intervention to maintain economic balance. The theory is supported by John Rawls who emphasizes the principles of justice and equality. This approach puts forward the importance of protection of individual interests in trade and the need for government involvement to ensure equality and justice in access to the market.

The use of this theoretical framework is essential in understanding the implications of the ACFTA agreement on the member countries. It provides a comprehensive analysis of the agreement's provisions and their potential impact on the regional economy. The analysis also highlights the importance of cooperation and solidarity among member countries in achieving the goals of the agreement.

Dispute settlement in the ACFTA

The dispute resolution system in the ACFTA refers to the provisions of the WTO Disputes Settlement Understanding (DSU), which provides a clear mechanism for resolving disputes that emerge between member countries. With the Disputes Settlement Mechanism (DSM) ACFTA, disputes are expected to be resolved efficiently without disturbing trade relations between countries. This is important to create trust among members and encourage sustainable trade growth.

The dispute resolution mechanism is a critical component of the ACFTA agreement, as it provides a framework for resolving disputes in a fair and transparent manner. The mechanism is designed to promote cooperation and understanding among member countries, and to prevent disputes from escalating into trade wars. The use of this mechanism is essential in maintaining a stable and predictable trade environment, and in promoting economic growth and development in the region.

Closing

ACFTA's agreement as part of the regional trade framework in the WTO shows that although there are challenges in the multilateral system, the regional approach can be a solution to facilitate better trade. With the same principles as the WTO and a clear dispute resolution mechanism, ACFTA is expected to provide significant benefits for the economic growth of its member countries. This creates opportunities not only to increase trade volume, but also to strengthen economic and political relations in the Southeast Asian region.

In conclusion, the ACFTA agreement is a significant step towards promoting economic integration in the region, and its implementation has the potential to bring about significant benefits for the member countries. The agreement's provisions, including the dispute resolution mechanism, are designed to promote cooperation and understanding among member countries, and to prevent disputes from escalating into trade wars. The use of this theoretical framework is essential in understanding the implications of the ACFTA agreement on the member countries, and in promoting economic growth and development in the region.

Recommendations

Based on the analysis of the ACFTA agreement, the following recommendations are made:

Strengthen cooperation and solidarity among member countries: The ACFTA agreement is designed to promote cooperation and understanding among member countries. It is essential that member countries work together to achieve the goals of the agreement, and to prevent disputes from escalating into trade wars.
Implement the dispute resolution mechanism effectively: The dispute resolution mechanism is a critical component of the ACFTA agreement. It is essential that member countries implement this mechanism effectively, and that disputes are resolved in a fair and transparent manner.
Promote economic growth and development in the region: The ACFTA agreement has the potential to bring about significant benefits for the member countries. It is essential that member countries work together to promote economic growth and development in the region, and to strengthen economic and political relations.

By following these recommendations, the ACFTA agreement can be a significant step towards promoting economic integration in the region, and its implementation can bring about significant benefits for the member countries. The agreement's provisions, including the dispute resolution mechanism, are designed to promote cooperation and understanding among member countries, and to prevent disputes from escalating into trade wars. The use of this theoretical framework is essential in understanding the implications of the ACFTA agreement on the member countries, and in promoting economic growth and development in the region.
Q&A: Understanding the Legal Analysis of Regional Trade Provisions within the Framework of WTO: Study of Afta-China Agreement

In our previous article, we discussed the legal analysis of regional trade provisions within the framework of the World Trade Organization (WTO), with a focus on the ASEAN-China Free Trade Agreement (ACFTA). Here are some frequently asked questions (FAQs) that provide further clarification on the topic.

Q: What is the significance of the ACFTA agreement?

A: The ACFTA agreement is a significant step towards promoting economic integration in the region. It has the potential to bring about significant benefits for the member countries, including increased trade volume, economic growth, and development.

Q: What are the principles listed in the ACFTA agreement?

A: The principles listed in the ACFTA agreement basically reflect the values that exist in the WTO, such as Most Favored Nations, National Treatment, and quantitative restriction prohibitions. These principles aim to create just and transparent trade between member countries, strengthen cooperation, solidarity, and respect national sovereignty.

Q: What is the dispute resolution mechanism in the ACFTA agreement?

A: The dispute resolution mechanism in the ACFTA agreement refers to the provisions of the WTO Disputes Settlement Understanding (DSU), which provides a clear mechanism for resolving disputes that emerge between member countries. With the Disputes Settlement Mechanism (DSM) ACFTA, disputes are expected to be resolved efficiently without disturbing trade relations between countries.

Q: Why is the dispute resolution mechanism important in the ACFTA agreement?

A: The dispute resolution mechanism is a critical component of the ACFTA agreement. It provides a framework for resolving disputes in a fair and transparent manner, and promotes cooperation and understanding among member countries.

Q: What are the benefits of the ACFTA agreement for the member countries?

A: The ACFTA agreement has the potential to bring about significant benefits for the member countries, including increased trade volume, economic growth, and development. It also strengthens economic and political relations in the Southeast Asian region.

Q: What are the challenges of implementing the ACFTA agreement?

A: The implementation of the ACFTA agreement may face challenges, including the need for cooperation and solidarity among member countries, and the effective implementation of the dispute resolution mechanism. However, with the right approach and commitment, these challenges can be overcome.

Q: What is the future of the ACFTA agreement?

A: The future of the ACFTA agreement is promising, with the potential to bring about significant benefits for the member countries. It is essential that member countries work together to achieve the goals of the agreement, and to prevent disputes from escalating into trade wars.

Q: What can be done to promote economic growth and development in the region?

A: To promote economic growth and development in the region, it is essential that member countries work together to achieve the goals of the ACFTA agreement. This includes strengthening cooperation and solidarity among member countries, implementing the dispute resolution mechanism effectively, and promoting economic growth and development in the region.

By understanding the legal analysis of regional trade provisions within the framework of the WTO, with a focus on the ACFTA agreement, we can better appreciate the significance of this agreement and its potential to bring about significant benefits for the member countries. The ACFTA agreement is a significant step towards promoting economic integration in the region, and its implementation has the potential to bring about significant benefits for the member countries.