CEPT for AFTA

Since the implementation of the CEPT Scheme on 1 January 1993, Member Countries have had to introduce legislation at the beginning of each year to enact the tariff reduction schedules mandated by the CEPT Scheme. Occasional delays in legal enactments prevented some exporters from immediately enjoying the lower tariff rates they were entitled to. Although exporters were allowed to obtain a rebate, the delays increased the cost of utilizing the CEPT Scheme.

To remedy the situation, Member Countries agreed to issue one legal enactment in 1997 which would cover the whole period of tariff reduction. This policy is not only expected to prevent costly delays but it will also inspire greater private sector confidence in the CEPT Scheme.

Harmonisation of Customs

ASEAN customs cooperation was further strengthened through the signing of the ASEAN Agreement on Customs in March 1997 at the first ASEAN Finance Ministers Meeting. The Agreement provides a legal framework by which cooperative activities in this area will be governed. The objectives of the Agreement include the simplification and harmonization of customs valuation systems, tariff nomenclature systems and customs procedures; ensuring consistency, transparency and the fair application of customs laws and regulation, procedures and other administrative guidelines within each Member State; ensuring efficient administration and expeditious clearance of goods to facilitate intra-regional trade and investment; and exploring other appropriate intra-ASEAN cooperation arrangements in the field of customs, particularly in the prevention and repression of all forms of smuggling and other forms of customs fraud.

In support of closer economic integration, a vision was formulated to take ASEAN customs cooperation through the turn of the century towards the year 2020. The vision was announced by the ASEAN Directors-General of Customs at their fifth meeting in May 1997. The theme, An ASEAN Customs Partnership for World Class Standards and Excellence in efficiency, professionalism and service, and uniformity through harmonized procedures, to promote trade and investment and to protect the health and well being of the ASEAN Community was adopted. The vision will help chart the future course of ASEAN customs cooperation. A detailed Work Programme is being developed based on the elements and thrusts identified in the Vision Statement.

As part of efforts to facilitate the cross border flow of goods within ASEAN, the Green Lane System for CEPT products was launched in 1996. The system provides for the expeditious clearance of CEPT goods. A review of the system conducted by Member Countries during the first year of implementation showed that it had improved the average clearing time of CEPT products. Continuous improvements are being made to encourage the trading community to make full use of the Green Lane system.

The period under review also saw progress made in the development of the ASEAN Harmonized Tariff Nomenclature (AHTN). A draft has been finalized and endorsed by the ASEAN Directors-General of Customs in May 1997. Brunei Darussalam, the Philippines and Singapore plan to implement the AHTN by 1998 as is Indonesia. Malaysia, Thailand and Vietnam will align their nomenclature systems to adopt the AHTN by the year 2000. The implementation of a harmonized nomenclature system within ASEAN will greatly benefit the trading community by ensuring greater uniformity, transparency and consistency in the application of commodity description and coding.

An ASEAN regional course on customs valuation was held in May 1997 in the Philippines. The course was organized in collaboration with the World Customs Organization, and focused on the practical aspects of applying the GATT Valuation Agreement (GVA). This training was conducted in preparation for the implementation of the GVA in ASEAN Member Countries by 1997.

Elimination of NTBs

On the basis of the mandate of the Ninth AFTA Council of April 1996, Member Countries have eliminated all customs surcharges as of the end of 1996.

Some progress has also been made in eliminating technical barriers to trade (TBTs). A list of 20 priority product groups for standards harmonization has been identified (see Table 3). International standards relating to these products such as those of the International Organization for Standardization (ISO), International Electrotechnical Commission (IEC) and International Telecommunication Union (ITU) have been compiled. Member Countries are now looking into the modality for harmonizing standards for these products. In addition, some Member Countries are concluding mutual recognition agreements on a bilateral basis.

ASEAN has agreed to adopt the follow-ing guidelines/procedures for conformity assessment:

a) Guideline on Quality System Report. This would provide the initial step in creating mutual confidence amongst ASEAN countries on ISO 9000 audits.

b) General Requirements for the Arrangement for the Product Certification Agency. This will be used by national accreditation and certification bodies in ASEAN as a model agreement for appointing inspecting agents.

ASEAN Member Countries have also adopted a framework for harmonizing phytosanitary measures. The framework involves several key elements including facilitation of intra-ASEAN trade, consistency with international standards, transparency, and scientific or technical justification for phytosanitary measures. Initially, rice and mangoes have been selected as priority crops but additional crops would be added as resources permit.

Regional Linkages

The First AEM-CER Consultation in September 1995 agreed on a number of concrete measures to facilitate trade and investment flows between the two regions. These activities included the creation of a customs compendium, information exchange on standards and conformance, including collaborative work on ISO 14000, and the linkage of trade and investment databases.

At the Second AEM-CER Consultation held in September 1996 in Jakarta, the AEM and CER Ministers signed a Memorandum of Understanding to further enhance regional cooperation in the area of standards and conformance. They also agreed on additional activities for trade and investment facilitation including:

i) joint studies to examine the medium to long-term development of the AFTA-CER linkage;

ii) a regular exchange of information on the latest developments of ASEAN economic cooperation activities and in the CER; and

iii) cooperation in services such as transport and tourism.

The AEM has also sought to develop linkages with other regional groupings such as the North American Free Trade Agreement (NAFTA), the Mercado Comun del Sur (MERCOSUR), the European Free Trade Association (EFTA) and the Southern African Development Community (SADC). The AEM met with the NAFTA Ministers in November 1996 in Manila, and with the Ministers from the MERCOSUR, SADC and EFTA countries during the World Trade Organisation (WTO) Ministerial Conference in Singapore in December 1996. During the consultations with EFTA, MERCOSUR and SADC in Singapore, the Ministers agreed on the need to promote greater trade and investment flows, to exchange views on international trade issues and to bring the private sectors of ASEAN and these regional groupings together. At the invitation of the governments of Argentina and Brazil, the ASEAN Secretary-General made an official visit to these two countries in March and April 1997 to work out a proposal for a specific linkage between the two regional groupings. The visit was a follow-up to the informal consultation between the ASEAN Economic Ministers and their counterparts from the MERCUSOR countries during the WTO Ministerial Conference.

The Secretary-General discussed a number of proposals to further ASEAN-MERCUSOR links with the Heads of Government and Foreign Ministers of both countries. These are expected to form the basis of the agenda for the AEM-MERCUSOR consultation to be held in October 1997 in Kuala Lumpur.