ASEAN to adopt new harmonized tariff system this year

ASEAN to adopt new harmonized tariff system this year

Adianto Simamora
The Jakarta Post
Jakarta

The Association of South East Asian Nations (ASEAN) plans to
implement its own harmonized tariff system this year as part of
efforts to further boost intra-regional trade, according to
Director General of Customs and Excise Permana Agung.

Permana said on Wednesday that the proposed ASEAN Harmonized
Tariff Nomenclature (AHTN), a classification code system for
goods in international trade, would still be based on the current
six-digit Harmonized System issued by the World Customs
Organization.

He said that, under the AHTN system, ASEAN countries will be
allowed to adopt an eight-digit level or 10-digit classification
code system for their export products.

He said that Indonesia would adopt a 10-digit code, with the
last two digits to be used for domestic statistic purposes.

Permana said that the new coding system would help simplify
and harmonize customs procedures in the ASEAN region.

"We hope the AHTN system can be implemented this year.

"Each of the ASEAN member countries is now preparing their
proposal about this plan," he told reporters after speaking at a
seminar.

He also explained that, with the AHTN system, it would be
easier for the government to detect the influx of goods from
ASEAN countries.

There has been concern among local manufacturers that the
implementation of AFTA (Asean Free Trade Area) earlier this year,
which cut down import tariff among member countries for a wide
range of products to between zero and five percent, would cause
the domestic market to be crowded with cheaper import products.

Under AFTA, the government can introduce a non-tariff import
barrier on a particular product, if the domestic market is
already overcrowded, to protect the local industry from
bankruptcy.

ASEAN groups Indonesia, Malaysia, Singapore, Thailand, Brunei,
the Philippines, Vietnam, Laos, Cambodia, and Myanmar. But only
the first six founding members of ASEAN had started AFTA, with
the rest delayed their tariff reductions until between 2006 and
2010.

The average tariff on intra-ASEAN trade is now down to 3.2
percent.