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Tuesday, March 09, 2010

AFTA 2010... Broken Promises?

My Opinion:  READ THIS ARTICLE.  Notice the "BOLD" and LARGER Font.  Yes, According to this article, ASEAN Automobile prices in Malaysia supposed to revised by 1 January 2010.  But so far, NO NEWS...   Any IDEA?  Are we, Malaysian Shortchanged again?

Anyway, DO read this article...

ASEAN Free Trade Area (AFTA)

Common Effective Preferential Tariff Scheme (CEPT) 

The CEPT scheme introduced in 1993 to eliminate intra-ASEAN import tariffs is now almost completed. The ASEAN-6 and Viet Nam have reduced duties on all products to 0-5 per cent. ASEAN-6 will eliminate duties on all products by 1 January 2010, except the limited Sensitive and Highly Sensitive Unprocessed Agricultural Products.

Lao PDR and Myanmar are expected to reduce duties on all products by 1 January 2008 except Sensitive and Highly Sensitive Unprocessed Agricultural Products. Cambodia is given until 1 January 2010 to do so. These countries and Viet Nam will eliminate duties on all products by 1 January 2010.

Indonesia and the Philippines have yet to offer rice and sugar for concessions. A special dispensation has been given to both countries to phase in these products by 2015.
Cambodia, Lao PDR and Myanmar have also phased in all products into the CEPT Scheme, except for:
  • 54 tariff lines of Cambodia;
  • 203 tariff lines of Lao PDR; and
  • 27 tariff lines of Myanmar.
These products are still placed under their respective Sensitive Lists. These products are to be transferred into the CEPT Scheme not later than 1 January 2008 for Lao PDR and Myanmar and 1 January 2010 for Cambodia.

Number of Tariff Lines at 0% for ASEAN in the CEPT Package 2007

Country Percentage
Brunei D. 71.63 28.37 100
Indonesia (AHTN 2007) 66.48 33.52 100
Malaysia 81.42 18.58 100

50.30 49.70 100
Singapore 100.00 - 100
Thailand (AHTN 2007) 54.37 45.63 100
ASEAN-6 71.54 28.46 100
Cambodia 3 5.79 94.21 100
Lao PDR 6.28 93.72 100
Myanmar 3.44 96.56 100
Vietnam 52.06 47.94 100
CLMV23 17.01 82.99 100
Total ASEAN 49.67 50.33 100
Source: ASEAN Secretariat, as of July 2007

Note :
1) GE products has been included with CEPT rates assumed = MFN
2) Last tranche of TEL has been included with CEPT rates assumed = MFN
Current Status of Tariff Reduction by Malaysia

Beginning 1 January 2007, Malaysia eliminated duties on 3,368 tariff lines under the CEPT Scheme. The remaining 2,291 tariff lines will be eliminated on 1 January 2010 to fulfil the CEPT commitments. These products are: automotive; iron and steel; glass and glassware; ceramic; and paper products.


89 tariff lines are exempted from tariff concessions under the CEPT Scheme. These products are: alcoholic beverages; and arms and ammunition.

Malaysia 's Commitment under the CEPT Scheme 

Status No. of Tariff Lines Threshold Compliance ¹ (%)
CEPT duties at zero per cent (As of 31 December 2006)
54.17 ²
CEPT duties eliminated by 1 January 2007 (including PIS products)
CEPT duties to be eliminated by 1 January 2010
CEPT Duties to be maintained at 5 per cent/20 per cent by 1 January 2010
(tropical fruits, sugar, tobacco, and rice)
Products not offered for tariff concessions under the CEPT Scheme
(General Exception List)
(alcoholic beverages and arms and ammunition)

Source: Ministry of International Trade and Industry
Based on ASEAN Harmonised Tariff Nomenclature (AHTN) 2002


ASEAN is simplifying the rules and procedures for using the CEPT Scheme to encourage trade among Member States.

To access CEPT tariff concessions ASEAN exporters/manufacturers can now choose the most convenient ROO, either:
  • the existing 40 per cent local/regional value content;

  • the relevant Product Specific Rules (PSR).
    ASEAN has adopted Product Specific Rules (PSR) for 1,453 tariff lines, effective 1 January 2007. Apart from these newly endorsed PSR, ASEAN has also adopted PSR for:
  • 839 tariff lines of textiles and apparel (1 January 1996);
  • wheat flour (27 April 2005);
  • 23 tariff lines of wood and wood based products and 36 aluminium products (28 September 2005); and
  • 35 tariff lines of iron and steel (1 September 2006).
    Negotiations for the second or final package of Product Specific Rules have been completed for the remaining tariff lines, except for 144 tariff lines which include automotives, iron and steel and chemical products.
    The Second or final package of PSR will be implemented by the first quarter of 2008.

An agreed work programme was established in ASEAN to eliminate these barriers in three packages:

  • 2008, 2009 and 2010 for ASEAN-5;
  • 2010, 2011 and 2012 for the Philippines;and
  • 2013, 2014 and 2015/2018 for Cambodia, Lao PDR, Myanmar and Viet Nam.
The NTBs are classified according to three types of boxes:
Boxes Treatment
Green These can be retained
Red These will have to be eliminated
Amber Elimination of NTBs in the Amber Box will be subject to negotiations

ASEAN countries are required to notify other members and ASEAN Secretariat when a specific Non-Tariff Measure (NTM) is being introduced.

A peer review process has been put in place to ensure that the implementation of NTMs is justifiable.

The ASEAN Integration System of Preferences (AISP) is a unilateral scheme of preference given by ASEAN-6 that provides zero duty to products of export interest to Cambodia, Lao PDR, Myanmar and Viet Nam (CLMV).

As at December 2006, ASEAN-6 has offered zero duty for 3,195 products of the CLMV namely:
  • Myanmar with 1,681 products;
  • Cambodia (632);
  • Lao PDR (494); and
  • Viet Nam (388).
Malaysia has granted duty exemption on 793 products to these countries:

  • Myanmar with 293 products;
  • Viet Nam (237);
  • Cambodia (179); and
  • Lao PDR (83).
These duty exemptions are given to products such as:

  • fruits and vegetables;
  • chemical products;
  • rubber products;
  • wood-based products;
  • paper products;
  • electrical and electronics;
  • plastic products;
  • footwear;
  • furniture;
  • textiles and apparel; and
  • iron and steel.


AHTN is a harmonised product classification nomenclature implemented by all ASEAN member countries with the aim of further facilitating and promote intra-ASEAN trade.

The transposition of AHTN 2002 into ATHN 2007 among ASEAN members is on-going. Only Thailand and Indonesia have implemented and transposed their CEPT package into AHTN 2007.

Malaysia issued the gazette on 31 December 2007 and the AHTN will come into force on 1 April 2008. The application of the AHTN is expected to be extended to non-ASEAN countries by 2011

In August 2007, ASEAN agreed to review and update the CEPT Agreement to become a comprehensive Trade in Goods (TIG) Agreement for AFTA. The reasons are:

  • to update some provisions to accommodate the current development in ASEAN;
  • to provide legal standing to the Ministerial decisions pertaining to CEPT/AFTA;
  • inconsistencies found between the provisions in the CEPT Agreement, Protocols and decisions of the AFTA Councils/AEMs;
  • non-existence of some principle provisions such as Most Favoured Nation (MFN) treatment and National Treatment;
  • some provisions in the CEPT need to be updated to be at par with the disciplines imposed in FTAs. and
  • all past amendments to the CEPT agreements in different protocols will be merged into the new comprehensive agreement. 


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