The US-ASEAN Trade and Investment Facilitation Agreement Explained

 ASEAN Briefing, 27 Sept 2021

The US-ASEAN Trade and Investment Facilitation Agreement (TIFA) is a framework that defines economic engagement between the two parties. While short on specifics, the TIFA — which was signed in 2006 — sets forth broad goals and principles for the US and ASEAN to cooperatively work toward strengthening trade and investment.

ASEAN is currently the US’ fourth-largest trading partner, accounting for over US$354 billion in trade in 2019. As of 2020, the US was the largest source of foreign direct investment in ASEAN, responsible for over US$328.5 billion in investments. Close to 42,000 US companies export to ASEAN, supporting over 625,000 American jobs.

As trade tensions with China persist, deepening economic relations with ASEAN has become a higher strategic priority for the US. The TIFA, as an overarching framework, provides a useful guide for how the US and ASEAN will increase their economic integration.

Strengthening the relationship

The TIFA contains several references to strengthening the relationship between the US and ASEAN. The TIFA builds upon the two parties’ goals to create an open, multilateral trade environment while building upon previously signed agreements. These include the 1990 Memorandum of Understanding between the US and ASEAN, the Enterprise for ASEAN Initiative, and the US-ASEAN Enhanced Partnership.

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