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University of Dayton Law Review


This Article explores the ASEAN Free Trade Agreement ("AFTA") and its implications for the regional and global auto industry. Section I of this article provides a brief history of ASEAN and its attempts to integrate regionally. It outlines the reasons for regional economic integration, and traces the current literature in this area. Section II provides an overview of the current auto industry in each of the major auto-producing countries in ASEAN: Thailand, Philippines, Indonesia, Vietnam, and Malaysia. It will also explain Malaysia's protected auto industry and Malaysia's attempts to delay implementation of AFTA, and its neighboring countries' reactions. Section III will describe the very first exchange of completely built-up vehicles ("CBU") within ASEAN under the precursor to AFTA, the ASEAN Industrial Cooperation Scheme ("AICO"), and its implications for the future of ASEAN. Section IV will expand on the concept of economic integration by describing current efforts by the auto industry to integrate, thus reducing its costs, increasing quality, and increasing consumer choices. Finally, Section V of this Article will draw some conclusions about the lessons learned from the auto industry's experience with AFTA, and will suggest that further economic integration will provide ASEAN with a credible and stable path to future growth even as the ascendant China continues to draw foreign direct investment from the region.

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