The third volume of the AFTA Reader focuses on the decisions of the 26th ASEAN Economic Ministers (AEM) Meeting held in September 1994 in Chiang Mai, Thailand and the progress made so far in implementing them. The decisions of the Ministers last September have the effect of accelerating the realisation of AFTA as well as broadening the commitments made by Member Countries.
As far as the CEPT itself is concerned, the AEM made three important decisions. First, the Ministers decided to reduce the time frame in realising the ASEAN Free Trade Area from the initial fifteen year period to ten years. Hence, the six Member Countries will achieve a free trade area by the year 2003. Second, the AEM decided that all products in the Temporary Exclusion List (TEL) should be transferred to the Inclusion List within a period of five years. Furthermore, at least 20% of the products should be transferred each year so that by 1 January 2000, all products will be included. Third, the AEM decided to include all unprocessed agricultural products in the CEPT. However, in practice, a category of unprocessed agricultural products called “sensitive” will have a liberalisation scheme that will still be different from the CEPT.
The AEM also decided to explore cooperation in new trade-related areas, specifically, trade in services and trade-related intellectual property rights. The AEM agreed on the need for a Framework Agreement on Cooperation in Services with priority given the improvement of cooperation in the area of services so as to increase the competitiveness of ASEAN service suppliers followed by the liberalisation of trade in services. The AEM also agreed to formulate an ASEAN Framework Agreement on Intellectual Property Cooperation taking into account regional and international developments including the interpretation and implementation of the Agreement on Trade Related Intellectual Property Rights (TRIPS). The 26th ASEAN Economic Ministers Meeting also agreed to establish an AFTA Unit in the ASEAN Secretariat and National AFTA Units in respective Member Governments. This is to create the necessary institutional infrastructure to support the implementation of the CEPT Scheme for AFTA.
There are other on going activities that are related to AFTA which have an important bearing on how well its objectives in liberalising trade in the region can be achieved. Under Article 5 of the CEPT Agreement, Member Countries are required to eliminate quantitative restrictions on products upon immediate enjoyment of CEPT concessions and eliminate other non-tariff barriers five years upon enjoyment of CEPT concessions. This volume of the AFTA Reader updates the reader on the progress made in this area. Widely diverging tariff nomenclature, customs procedures and valuation methods can act as significant non-tariff barriers. Hence, the Fifth AFTA Council agreed that harmonisation in these areas will have to be an ongoing process in the realisation of AFTA. This volume reports on progress in customs cooperation in ASEAN. Finally, this issue of the AFTA Reader continues the Question & Answer (Q & A) section and provides the latest figures on intra-regional trade.
October 4th, 2012
