Local firms unaware of AFTA requirements

Local firms unaware of AFTA requirements

Adianto P.Simamora, The Jakarta Post, Jakarta

Many local exporting firms are still unaware of the need to
complete the form D document or certificate of origin in order to
benefit from low tariffs when their products enter the ASEAN
(Association of Southeast Asian Nations) market early next year
at the start of the regional free trade era, according to a
senior government official.

"It (the certificate of origin) is very important because the
low import tariff can only be enjoyed by filling in form D,
issued by authorized officials in the respective ASEAN
countries," director of regional cooperation at the Ministry of
Industry and Trade Budi Darmadi told The Jakarta Post late last
week.

He said that the government would move immediately to inform
local exporters about this requirement.

He was commenting on preparations taken by the government
ahead of the implementation of the ASEAN Free Trade Area (AFTA)
on Jan. 1, 2002.

The AFTA plan will liberalize trade within the region by the
elimination of import tariffs and nontariff barriers under the
Common Effective Preferential Tariff (CEPT) mechanism.

Under the CEPT, import tariffs on goods traded within ASEAN
countries, which meet at least a 40 percent ASEAN content
requirement, will be reduced to 0 percent to 5 percent.

"Goods on the inclusion list with at least 40 percent local
content from ASEAN member countries are allowed to receive a
Certificate of Origin and enjoy low import tariffs," Budi said.

AFTA was formulated in 1992 during a summit of ASEAN leaders
aimed at boosting the region's competitive advantage as a
production base geared for the world market.

The six founding members of ASEAN -- Indonesia, the
Philippines, Singapore, Malaysia, Thailand, and Brunei Darussalam
-- have been active in lowering their import tariffs.

Indonesia has managed to reduce 90 percent of the 7,286
import tariffs in the Inclusion List to 0 percent to 5 percent as
required under AFTA.

The government would pursue to lower the remaining 10 percent
next year.