ASEAN Free Trade Area (AFTA). Customs Rules of Origin

Course summary ASEAN Free Trade Area (AFTA):

ASEAN Tariff Liberalisation. Elimination of Import Duties and Tariff Rate Quotas. Customs Valuation. Sanitary and phytosanitary measures

Most of the Southeast Asian region is now a free trade area. Accounting for over 96 percent of all ASEAN trade, the first six signatories of the Common Effective Preferential Tariff scheme for the ASEAN Free Trade Area have reduced their tariffs on intra-regional trade to no more than five percent for almost all products in the Inclusion List or removed them altogether.

The objective of the AFTA Agreement is to achieve free flow of goods in ASEANas one of the principal means to establish a single market and production base for the deeper economic integration of the region towards the realisation of the AEC (ASEAN Economic Community) by 2015.

The Agreement on the Common Effective Preferential Tariff (CEPT) Scheme for the ASEAN Free Trade Area requires that tariff rates levied on a wide range of products traded within the region be reduced to no more than five percent. Quantitative restrictions and other non-tariff barriers are to be eliminated.

Member States shall eliminate import duties on all products traded between the Member States by 2010 for ASEAN-6 and by 2015, with flexibility to 2018, for CLMV.
- “ASEAN-6” refers to Brunei Darussalam, Indonesia, Malaysia, the Philippines, Singapore and Thailand.
- “CLMV” refers to Cambodia, Laos PDR, Myanmar and Vietnam.

Example of the course ASEAN Free Trade Area (AFTA):

For ASEAN-6, by 1 January 2009:
- Import duties of at least eighty percent (80%) tariff lines are eliminated;
- Import duties on all Information and Communications Technology (ICT) products, as defined in the e-ASEAN Framework Agreement, are eliminated;
- Import duties on all Priority Integration Sectors (PIS) products are at zero percent (0%), except those listed in the accompanying negative lists to the Protocols of the ASEAN Framework Agreement for the Integration of Priority Sectors and any amendments thereto; and
- Import duties on all products are equal to or less than five percent (5%);

For Lao PDR, Myanmar and Viet Nam, import duties on all products are equal to or less than five percent (5%) by 1 January 2009;

For Cambodia, import duties of at least eighty percent (80%) tariff lines are equal to or less than five percent (5%) by 1 January 2009;

AFTA is very close to its full realisation. 98.58% of the total products in ASEAN have been brought into the CEPT Inclusion list (IL), and tariffs of 93.67% of these products have been reduced to within 0-5%. Tariffs on 98.67% of the products in the IL of ASEAN-6 have been brought down to the 0-5% range.

ASEAN Economic Community - ASEAN Free Trade Agreements FTAs - Foreign direct investment FDI in ASEAN countries

Topic: Globalization and regionalization