ASEAN speeds up tariff reductions in 11 sectors

ASEAN speeds up tariff reductions in 11 sectors

Meidyatama Suryodiningrat, The Jakarta Post, Vientiane

Leaders of the Association of Southeast Asian Nations (ASEAN)
agreed on Monday to accelerate tariff reductions by eliminating
Common Effective Preferential Tariffs (CEPTs) in 11 sectors by
2007.

The 11 sectors are agro-based, automotive, electronics,
fisheries, rubber-based, textile and apparels, wood-based, air
travel, e-commerce (also known as "e-ASEAN"), health care and
tourist industries.

"This is a significant decision since these 11 sectors
constituted more than 50 percent of intra-ASEAN trade in 2003,"
ASEAN Secretariat spokesman M.C. Abad said.

Data from the ASEAN Secretariat shows that intra-ASEAN trade
last year reached US$84 billion, or 23 percent of the region's
trade with the world, a slight drop from the previous year's $80
billion but higher than the $79 billion in 2001.

The decision, endorsed under the Framework Agreement for the
Integration of Priority Sectors, is aimed at hastening further
economic integration toward a single market and production base
in the region.

Under the ASEAN Free Trade Area (AFTA), all tariffs within
ASEAN will be eliminated by 2010.

With Monday's agreement, the ASEAN-6 countries -- Indonesia,
Singapore, Malaysia, the Philippines, Brunei and Thailand -- will
achieve the elimination of tariffs in these 11 priority sectors
by 2007.

Tariffs averaged about 12 percent during the start of AFTA and
now stand at an average of 2 percent.

Due to the economic disparity between the first six ASEAN
member states and the last four -- Cambodia, Laos, Myanmar and
Vietnam (known by the acronym CLMV) -- a later deadline of 2012
has been set for the CLMV countries for the elimination of
tariffs in the 11 priority sectors.

ASEAN also agreed to establish criteria for identifying non-
tariff barriers by June next year, to be followed by a definitive
program for the removal of these barriers starting Dec. 31, 2005.

While ASEAN officials were upbeat about this new initiative, a
closer examination of the agreement revealed the stipulation
that products "on the sensitive list, highly sensitive list and
general exception list would be exempt from the acceleration".

The director general of international cooperation at the
Indonesian Ministry of Trade, Pos M. Hutabarat, earlier said a
country could only place on the "sensitive list" an average of 15
percent of its total products from each sector.

He said Indonesia had proposed a sensitive list dominated by
automotive products and their components.

ASEAN Framework Agreement for the Integration of Priority Sectors

-- Eliminate tariffs in priority sectors by 2007 for ASEAN-6
and 2012 for CLMV countries.

-- A work program for the removal of non-tariff barriers by
Dec. 31, 2005.

-- Accelerate the liberalization of services in priority
sectors by 2010.

-- Encourage recognition of test reports by accredited
laboratories to enhance harmonization of product standards and
technical regulations.

-- Visa exemption for intra-ASEAN travel by ASEAN nationals by
2005.

-- Develop an agreement to facilitate movement of
businesspeople, experts, professionals and skilled labor by Dec.
31, 2005.