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.