The 1992 CEPT Agreement had excluded unprocessed agricultural products from the CEPT Scheme. However, the 26th ASEAN Economic Ministers (AEM) Meeting in September 1994 decided to phase in unprocessed agricultural products into the CEPT Scheme.
Categories of Unprocessed Agricultural Products
Unprocessed agricultural products have been categorized into three major lists: (a) Immediate Inclusion List: (b) Temporary Exclusion List (TEL) and (c) Sensitive List.
Unprocessed agricultural products in the Immediate Inclusion List were included in the CEPT Scheme on 1 January 1996. These products have already began the process of tariff reduction, so that by 2003, the tariffs on these products will be within the 0-5% range. Member Countries are also required to eliminate quantitative restrictions (QRs) and other non-tariff barriers (NTBs) on these products.
Unprocessed agricultural products in the Temporary Exclusion List can be kept out of the CEPT Scheme only for a limited time. By 1 January 1997, each Member Country is required to phase in, at equal installments, those unprocessed agricultural products in their TEL. By 1 January 2003, all these products in the TEL should be in the CEPT Scheme, i.e., tariffs at 0-5%, QRs and NTBs removed (please refer also to Box 1 below).
However, unprocessed agricultural products in the Sensitive List will be treated differently. A special arrangement with features that need not be the same as the CEPT will be created for these products. However, the trade liberalization features of the special arrangement will have to be more preferential than the commitments made by Member Countries under the Agreement on Agriculture of the World Trade Organization (WTO).
But even for these sensitive UAPs, Member Countries have agreed that there is a deadline by which they have to be phased into the CEPT Scheme. The Ninth AFTA Council that met in Sentosa, Singapore in April 1996 agreed to set a deadline of 1 January 2010 when all products will have to be included into the CEPT Scheme. Hence the special arrangement for products in the Sensitive List represents a transitional and not a permanent special treatment of unprocessed agricultural products.
Successful Implementation of 26th AEM Decision
There are a total of 2,025 tariff lines classified as unprocessed agricultural products. Out of these, 1,387 tariff lines (68.5% of the total) are in the Immediate Inclusion List; 377 tariff lines are in the Temporary Exclusion List (18.6% of all unprocessed agricultural products); and 261 tariff lines (12.9% of the total) are in the Sensitive List. By 2003, the products in the Immediate Inclusion and Temporary Exclusion Lists will all be in the CEPT Scheme. This represents more than 87% of the tariff lines of unprocessed agricultural products.
In 1994, intra-ASEAN imports of unprocessed auricultural products was about US $ 398 million. Those classified in the Immediate Inclusion List account for 31.6% of intra-ASEAN imports; the products in the TEL account for 32.9%; and the products in the Sensitive List account for 35.5%. Hence, nearly two-thirds of intra-ASEAN imports of unprocessed agricultural products will be in the CEPT Scheme by 2003.
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Table 3
UAPS BY TARIFF LINES AND 1994 IMPORT VALUE
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List Number of Tariff Lines lntra-ASEAN Imports
(US $ Millions)
Immediate Inclusion 1,387 125.68
Temporary Exclusion 377 130.7
Sensitive 261 141.15
Total 2,025 397.53
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Source: ASEAN Secretariat
Hence, whether the criteria of success be measured by number of tariff lines or the value of intra-ASEAN trade in unprocessed agricultural products, ASEAN has been relatively successful in implementing the 26th AEM decision to include unprocessed agricultural products into the CEPT Scheme.
BOX 1 TEMPORARY EXCLUSION LISTS
At present there are three categories of Temporary Exclusion Lists in the CEPT Scheme. The first category is the TEL for manufactured and processed agricultural products. The second category is the TEL for unprocessed agricultural products. The third category is for those unprocessed agricultural products covered by State-Trading Enterprises (STEs) notified to the World Trade Organization.
There are a total of 2,496 tariff lines in the first category of TEL; 377 tariff lines in the second category of TEL; and 15 tariff lines in the third category.
However as the name implies, all these products in the different TELs can only be temporarily exempted from the commitments of the CEPT Scheme. In fact the different categorization of the TEL products simply reflect the difference in the date in which they are required to be phased into the CEPT Scheme.
The manufactured and processed agricultural products in the first category of TEL must start their phase in on 1 January 1996 and complete the process by 1 January 2000. The phase in must also be in equal installments. The unprocessed agricultural products in the second category of TEL start their phase in on 1 January 1997 and must complete the process by 1 January 2003. Again the phase in must be in equal installments. Finally, products in the third category of TEL must complete their phase in by 1 January 2010. The modality of the phasing in, including the starting date of phase is still being discussed.
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Table 4
NUMBER OF TARIFF LINES IN TELS
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Temporary Exclusion Lists Number of Tariff Lines
Manufactured and Processed
Agricultural Products 2,496
Unprocessed Agricultural Products 377
Unprocessed Agricultural Products
Covered by STEs Notified to WTO 15
Total 2,888
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Source: ASEAN Secretariat
