ASEAN plans further import tariff cut
Adianto P. Simamora, The Jakarta Post, Jakarta
The Association of Southeast Asian Nations (ASEAN) is planning to slash further the import tariffs on several products to 0 percent, a senior official at the Ministry of Trade and Industry has said.
Director General of Multilateral Cooperation at the ministry Pos M. Hutabarat said that the plan to impose a 0 percent tariff was part of the region's efforts to set up a community union within ASEAN countries.
"The first move is to impose a 0 percent import tariff on electronic and consumer products in 2010," Pos said on Friday.
He said that a recent senior economic ministers (SEOM) meeting in Malaysia had agreed to implement the community union.
Pos, however, added that in terms of targeted products, member countries had still been unable to agree.
"We (Indonesia) have agreed to implement the community union but we have not agreed on the products yet," Pos said.
He added that the country's exports of electronics were only US$6 to $7 million per year, far lower compared with Malaysia's approximately $60 million, Singapore's $100 million, Thailand's $40 million and the Philippines' $20 million.
The plan, however, will still be discussed at an economic ministers meeting in Laos next month.
"The heads of government of ASEAN member countries will decide whether the region should implement the community union or not in Bali next October," Pos said.
Under the community union program, the region's countries that currently implement the ASEAN free trade area (AFTA) must further slash their import tariffs to 0 percent on several products traded within the region.
Under the AFTA agreement, the six founding members of ASEAN -- Indonesia, Singapore, Thailand, the Philippine, Malaysia and Brunei -- impose import tariffs of 0 percent to 5 percent on almost all products.
The four other ASEAN members -- Vietnam, Laos, Cambodia and Myanmar -- are to be allowed to delay their tariff reductions until 2006 to 2010.
The SEOM meeting also agreed to implement the customs union in the region, which will harmonize import tariffs on products that enter ASEAN markets.
"Both programs (the community and customs union) are a follow- up to the AFTA agreement," said Pos.