Temporary exclusions refer to products for which tariffs will eventually be reduced to 0-5%, but which will be temporarily protected by a delay in tariff reductions. This is allowed by the AFTA agreement and is set out in a protocol on the implementation of the temporary exclusion list of the CEPT regime. Malaysia invoked this protocol in 2000 and delayed tariff reductions on fully assembled automobiles and auto slaughter kits to protect its local auto industry. ASEAN members have the option of excluding products from the CEPT in three cases: 1.) Temporary exclusions; 2.) Sensitive agricultural products; 3.) General exceptions. ASEAN members have the possibility to exclude products from the CEPT in three cases: 1.) Temporary exclusions 2.) Sensitive agricultural products 3.) General exceptions. Temporary exclusions apply to products for which customs duties are eventually reduced to 0-5%, but which are temporarily protected by a delay in tariff reductions. The AFTA Agreement was signed in Singapore on 28 January 1992. When the AFTA agreement was originally signed, ASEAN had six members, namely Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand. Vietnam joined in 1995, Laos and Myanmar in 1997 and Cambodia in 1999. AfTA now covers all ten ASEAN countries. The four latecomers had to sign the AFTA agreement to join ASEAN, but had longer delays in meeting AFTA`s tariff reduction commitments.
The ASEAN Free Trade Area (AFTA)[1] is a trade bloc agreement of the Association of Southeast Asian Nations that supports local trade and production in all ASEAN countries and facilitates economic integration with regional and international allies. [2] [3] [4] It is considered one of the largest and most important free trade areas (FTAs) in the world and, together with its network of dialogue partners, has promoted some of the world`s largest multilateral forums and blocs, including the Asia-Pacific Economic Cooperation, the East Asia Summit and the Regional Comprehensive Economic Partnership. [5] [6] [7] [8] T92 [10] ASEAN national authorities have also traditionally been reluctant to share or cede their sovereignty to the authorities of other ASEAN members (although ASEAN trade ministries regularly conduct cross-border visits to carry out on-site inspections in anti-dumping investigations). Unlike the EU or NAFTA, joint compliance and non-compliance investigation teams are not widespread. Instead, ASEAN national authorities must rely on the review and analysis of other ASEAN national authorities to determine whether AFTA measures such as rules of origin are being followed. There may be disagreements between national authorities. Again, the ASEAN Secretariat can help resolve a dispute, but does not have the legal authority to resolve it. For a small number of sensitive agricultural products, the 2010 deadline for their inclusion in the CEPT system is extended. In an agreement that has not yet been fully developed, the process of reducing tariffs on these products will begin between 2000 and 2005, apparently depending on the country and the product. The CEPT system will cover almost 98% of all ASEAN tariff items by 2003; Until then, the only products not covered by the CEPT system will be products in the “general exemptions” category and sensitive agricultural products. For sensitive agricultural products such as rice, ASEAN members have until 2010 to reduce tariffs to 0-5%. .
Efforts to close the development gap and expand trade among ASEAN members are key points in the political debate. According to a research report published in 2008 by the World Bank as part of its Project on Trade Costs and Facilitation[11], ASEAN members have the potential to reap significant benefits by investing in further trade facilitation reforms as a result of the comprehensive tariff reform already implemented under the ASEAN Free Trade Agreement. Flexibility in postponing the elimination of customs duties to 1 January 2018 for certain goods classified as sensitive in the inclusion list is allowed. Cambodia, the Lao People`s Democratic Republic, Myanmar and Vietnam shall notify these products in advance to the ALETA Council. The CEPT is the mechanism by which tariffs on goods traded in the ASEAN region that meet an ASEAN wage requirement of 40% will be reduced to 0-5% by 2002/2003 (2006 for Vietnam, 2008 for Laos and Myanmar and 2010 for Cambodia). Tariff reductions are increasing on both “fast” and “normal” rail. Tariffs on accelerated goods were significantly reduced to 0-5% in the year 2000. Tariffs on goods in normal condition will be reduced to this level for a small number of products by 2002 or 2003. Currently, about 81% of ASEAN tariffs are covered by the fast or normal route. RECALLING further the decision of the Third Asean Informal Summit held in Manila, Philippines, on 28 November 1999 to abolish all import duties for the original six ASEAN members in early 2010 and to bring forward the timetable for new ASEAN members from 2018 to 2015, although some sensitive products may follow the original 2018 deadline, Although these national customs and trade authorities of the NEA coordinate with each other, disputes may arise. The ASEAN Secretariat does not have the legal authority to resolve these disputes, so disputes are resolved bilaterally through informal means or through dispute settlement.
The exporter must obtain a “Form D” certificate from their national government attesting that the goods have met the 40% requirement. Form D must be submitted to the customs authority of the importing government in order to benefit from the CEPT rate. At times, difficulties have arisen with respect to the evidence in support of the application and the question of how ASEAN national customs authorities can verify Form D submissions. These difficulties arise because each ASEAN national customs authority interprets and implements the requirements of Form D without much coordination. In the longer term, ASEAN countries have agreed to introduce zero tariffs on virtually all imports by 2010 for the original signatories and by 2015 for the four new ASEAN members. REAFFIRMING its determination to accelerate trade liberalization within ASEAN through AFTA, through the application of the CEPT regime; RECOGNISING the need to amend the Agreement to take account of the decision of the ASEAN Heads of State or Government/States, RECALLING the decision of the thirteenth meeting of the AFTA Council held in Singapore on 29 September 1999 to work towards the elimination of import duties on all products in order to achieve the ultimate objective of a free trade area by 2015 for the six initial ASEAN Member States and by 2018 for the NEW ASEAN Members Home ยป Common Effective Preferential Tariff System for the ASEAN Free Trade Area. ASEAN has worked to improve customs coordination through the implementation of the ASEAN Single Window project. The ASEAN Single Window would allow importers to enter all transaction information once electronically. This information would then be shared with all other ASEAN national customs authorities.
CONSIDERING the Agreement on the Effective Common System of Preferential Tariffs (CEPT) for the ASEAN Free Trade Area (AFTA), signed in Singapore on 28 January 1992, and the Protocol Amending the Agreement on the Effective Common System of Preferences for the ASEAN Free Trade Area signed at Bangkok on 15 December 1995 (hereinafter referred to as “the Agreement”), and its Protocols, signed in Singapore on 15 December 1995, and its Protocols; IN WITNESS WHEREOF, the undersigned, being duly authorized by their respective Governments, have signed this Protocol amending the Agreement on Common Effective Preferential Tariff Arrangements for the ASEAN Free Trade Area. For the Government of the Republic of Indonesia RINI M.S. SOEWANDI Minister of Industry and Trade The Governments of Brunei Darussalam, the Kingdom of Cambodia, the Republic of Indonesia, the Lao People`s Democratic Republic, Malaysia, the Union of Myanmar, the Republic of the Philippines, the Republic of Singapore, the Kingdom of Thailand and the Socialist Republic of Vietnam, Member States of the Association of Southeast Asian Nations (hereinafter referred to as “ASEAN”); DONE on 31 January 2003 in a single copy in English. For the Government of Brunei Darussalam ABDUL RAHMAN TAIB Minister of Industry and Primary Resources An international treaty entitled: Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA), signed on 27 February 2009 in Cha-am, Phetchaburi, Thailand, established a free trade area between the ASEAN countries, Australia and New Zealand. [13] For the Government of the Lao People`s Democratic Republic SOULIVONG DARAVONG Minister of Industry and Handicrafts For the Government of the Socialist Republic of Vietnam LUONG VAN TU Deputy Minister of Commerce The administration of AFTA is carried out by the national customs and trade authorities of each ASEAN member. . . .