How does AEC liberalize trade in goods?

The ASEAN Trade in Goods Agreement (ATIGA), which entered into force in 2010, provides:

• A legally-binding guarantee of removed or reduced tariffs on ASEAN-originating goods traded in ASEAN
• Liberal and flexible ROO for products to qualify as ASEAN-originating goods

The ATIGA contains the tariffs each AMS accords each product and clearly specifies the ROO and cumulation rules.

Lower Tariffs and Liberal ROO

Brunei, Indonesia, Malaysia, the Philippines, Singapore, and Thailand have eliminated customs duties, or tariffs, on all their tariff lines, with the exception of certain sensitive products and those that are in their General Exceptions List (GEL). Cambodia, Lao PDR, Myanmar, and Vietnam have eliminated tariffs on 90.86% of their tariff lines4 to-date. They will eliminate tariffs on all lines by end- 2018, with the exception of sensitive and GEL products.

Steps to determine if an exporter can benefit from ATIGA tariff concessions:

• Step 1: Determine which ASEAN country you are exporting to
• Step 2: Find out the AHTN code of the product you want to export
• Step 3: Check whether your product is included for tariff elimination under the ATIGA tariff schedules http://www.asean.org/communities/asean-economiccommunity/category/asean-trade-in-goods-agreement
• Step 4: Determine whether your product qualifies as “originating” under the ATIGA ROO
• Step 5: Determine the documentation required e.g. Certificate of Origin Form D or Self-Certification
• Step 6: Obtain the required documentation and ship together with product

To qualify as originating, goods must be:

• Wholly obtained or produced in the exporting AMS, in accordance with the definitions in the ATIGA ROO text or
• Processed in the exporting AMS in accordance with the following rules:

+ Change in Tariff Classification (CTC) Rule: The final product must have a different tariff classification (at the four-digit level, or six-digit level for selected products) from that of the imported or non-originating raw materials used in its manufacture

+ Value-Add Rule: The local or ASEAN content of the final product must be at least 40%

+ Process Rule: The manufacturing process which characterises the product must have occurred in the exporting AMS

The full rules and criteria are found in the ATIGA ROO legal text.

What is the ASEAN Trade In Goods Agreement (ATIGA)?

In pursuing the goal of establishing a single market and production base with free flow of goods by 2015 for the ASEAN Economic Community, a more integrated and holistic approach would be required. This calls for the integration and inclusion of existing and additional measures relevant to the trade in goods initiative under one umbrella. To achieve this, the ASEAN Economic Ministers agreed in August 2007 to enhance the Common Effective Preferential Tariff for ASEAN Free Trade Agreement (CEPT-AFTA) into a more comprehensive legal instrument. This led to the signing of the ASEAN Trade in Goods Agreement (ATIGA) in February 2009.

Key Elements of the ATIGA:

1. ATIGA consolidates and streamlines all the provisions in the CEPT-AFTA, and formalizes several ministerial decisions. As a result, the ATIGA has become a single legal instrument for government officials who implement and enforce the Agreement, as well as for the private sectors who are the beneficiaries.
2. The ATIGA annex provides the full tariff reduction schedule of each Member States and spells out the tariff rates to be applied on each product for each year up to 2015. This makes tariff reduction schedules transparent and predictable for the business community. A single legal enactment to effectively implement the stipulated reduction schedule up to 2015 is also expected.
3. The ATIGA comprises elements to ensure the realisation of free flow of goods within ASEAN, including the following: tariff liberalisation, removal of non-tariff barriers, rules of origin, trade facilitation, customs, standards and conformance, and sanitary and phytosanitary measures. The ATIGA contains comprehensive coverage of commitments related to trade in goods and mechanisms for its implementation as well as institutional arrangements. This would allow for synergy of actions being undertaken by the various ASEAN Sectoral Bodies.
4. With the objectives of eliminating non-tariff barriers, the provisions of non-tariff measures (NTM) in the ATIGA have been enhanced further through codification of measures, as well as establishment of a mechanism to monitor the committed elimination of non-tariff barriers.
5. The ATIGA places emphasis on trade facilitation measures by including the ASEAN Framework on Trade Facilitation. Subsequently, ASEAN has developed the Trade Facilitation Work Programme for the period of 2009-2015.

Entry into Force of the ATIGA

The ATIGA entered into force on 17 May 2010 with transition period of 180 days to ensure a smooth transition from the CEPT scheme into the ATIGA. After the transition period, no CEPT Form D shall be issued. In other words, only ATIGA Form D shall be issued.