The Fifth ASEAN Summit held in Bangkok on 14-15 December 1995 endorsed the decision to accelerate further the progress towards actualization of AFTA before the target date of year 2003. With this resolve, the next step is for Member Countries to look into maximizing the number of items with tariffs reduced to 0-5% by the year 2000. In addition, Member Countries will work towards expanding the number of products with tariffs reduced to 0%, also by the year 2000.
The ASEAN Heads of Government also endorsed the following in relation to AFTA, i.e. to:
a) remove all quantitative restrictions and non-tariff barriers, beginning 1 January 1996;
b) introduce greater transparency in standards and conformance, align product standards with international standards and undertake projects to facilitate mutual recognition agreements on a bilateral or plurilateral bases;
c) harmonize tariff nomenclature at the HS 8-digit level and implement the GATT Valuation System by 1997;
d) create a green lane system to expedite the clearance of CEPT products; and
e) intensify its cooperative relationships with its dialogue partners and other regional groupings such as the CER, EU and NAFTA.
Documents signed at the Fifth ASEAN Summit
Several Protocols were signed to effect the changes arising from recent developments relating to the implementation of the CEPT Scheme for AFTA. These Protocols are legal instruments used to effect amendments to the respective Agreements, namely the Agreement on the Common Effective Preferential Tariff Scheme for the ASEAN Free Trade Area. The Protocols are legally binding on all signatory Governments. The adoption of such a formal procedure reflects the seriousness and commitment of Member Countries to the realization of AFTA. It also serves to demonstrate the transparent nature of procedures adopted by ASEAN.
Protocol to Amend the Agreement on the CEPT Scheme for AFTA
This Protocol was signed, in accordance with Article 10(2) of the CEPT Agreement which allows for amendments to effect the following changes to the CEPT scheme agreed at the 26th Meeting of the ASEAN Economic Ministers:
a) acceleration of the CEPT Scheme from the original time frame of 15 years to 10 years;
b) inclusion of unprocessed agricultural products into the CEPT scheme; and
c) phasing-in all products in the Temporary Exclusion List into the Inclusion List in five equal installments, beginning I January 1996 and ending by the year 2000.
In addition, this Protocol created a clause in the CEPT Agreement to allow for the accession of new Members to the CEPT Agreement. This is in view of Vietnam’s Membership in ASEAN effective July 1995, and potentially Cambodia, Laos and Myanmar.
The details of these changes are outlined in the last volume of the AFTA Reader (Volume III). Note also that the Interpretative Notes to the CEPT Agreement is continually being amended to reflect new decisions affecting the Agreement. The revised Interpretative Notes are appended as Annex D.
Protocol for the Accession of the Socialist Republic of Vietnam to the Agreement on CEPT for AFTA
As a new Member, Vietnam is committed to subscribe to all Declarations, Treaties and Agreements in ASEAN. In line with this, the Protocol for the Accession of the Socialist Republic of Vietnam to the Agreement on the CEPT scheme for AFTA was signed at the Fifth Summit. The signing of this Protocol allows Vietnam to formally accede to the Agreement. By signing this Protocol, Vietnam is subjected to the terms and conditions agreed upon between her and the existing Member Countries. These include the following:
a) extension, on a reciprocal basis, Most-Favoured Nation Treatment (on turnover tax, luxury tax, exchange rate determination, foreign exchange control and other measures) to ASEAN Member Countries and the provision of relevant information as and when requested;
b) preparation of a list of products for tariff reduction, for tariff reduction, for tariff reduction beginning 1 January 1996 and ending at 0-5% tariff rate oil 1 January 2006;
c) phasing in of products which are temporarily excluded, in five equal installments beginning 1 January 1999, and ending I January 2003, and preparation of a list of these products for their annual installment; and
d) phasing in of agricultural products which are temporarily excluded, beginning January 2000 and ending 1 January 2006, and preparation of a list of these products for their annual installment.
These terms and conditions have been accorded by ASEAN specifically to Vietnam. The same accession process, although the exact terms and conditions may differ, would apply to other new Members joining ASEAN.
Protocol to Amend the Agreement on ASEAN Preferential Trading Arrangements
With the rapid progress being made in the implementation of the CEPT Scheme, the Seventh AFTA Council in April 1995 agreed that all products under the ASEAN Preferential Trading Arrangements (PTA) would be phased into the CEPT scheme by 1 January 1996. Hence, PTA products should now use the CEPT Certificate of Origin (Form D) rather than For-m C, so as to enjoy the PTA Margin of Preference. This, however, would require chancing the Rule of Origin of PTA (i.e. 50% ASEAN content) to that of the CEPT, at 40% cumulative ASEAN content.
A Protocol was signed to effect this change. Essentially, the Protocol provides for the substitution of the Rules of Origin of the PTA and the Operational Certification Procedures of the PTA to the Rules of Origin of the CEPT Scheme and the Operational Certification Procedures of the CEPT Scheme. The PTA is still in operation as not all the PTA products are in the CEPT Scheme. The change is made to simplify procedures in that, only a single form – Form D – is used.
In this volume of the AFTA Reader, we present these three Protocols which were signed at the Fifth ASEAN Summit in Bangkok, and the revised interpretative notes to the Agreement on the CEPT Scheme for AFTA. These are presented at Annexes A, B, C and D respectively.
