THE ASEAN TRADE IN GOODS AGREEMENT

What is the ATIGA?

The ASEAN Trade in Goods Agreement (ATIGA) is an improvement over the current ASEAN Free Trade Area-Common Effective Preferential Tariff (AFTA CEPT) Scheme.
- The AFTA CEPT Scheme was focused on tariffs, the main component of which was the schedule for tariff reduction/elimination for trade in goods in ASEAN.
- The ATIGA is akin to a Trade-in-Goods (TIG) chapter of an FTA, which comprises both tariff and non-tariff elements (e.g. trade disciplines on Sanitary and Phytosanitary (SPS) measures, Customs Procedures, and Trade Facilitation, among others).

Why the ATIGA?

The AFTA CEPT Scheme was implemented in 1993. After 15 years, ASEAN has matured in the area of trade-in-goods. Given this, coupled with the changes in business processes and that ASEAN has negotiated and concluded FTAs with several Dialogue Partners, it is timely for the AFTA CEPT scheme to be upgraded, so that ASEAN remains current.

What is the objective of the ATIGA?

The objective of this Agreement is to achieve free flow of goods in ASEAN as one of the principal means to establish a single market and production base for the deeper economic integration of the region towards the realisation of the AEC by 2015.[1]

What are the features of this agreement?

1. Comprehensive coverage- it covers trade-related rules and regulations, including tariff liberalisation, non-tariff barrier liberalisation, rules of origin, trade facilitation, customs procedures, standards and conformance, and Sanitary and Phytosanitary (SPS) measures.

2. Consolidated and streamlined rights and obligations- To have an agreement that is more user-friendly for traders, the ATIGA consolidates all ASEAN’s existing initiatives, obligations and commitments made with regard to intra-ASEAN trade-in-goods into one comprehensive document.


3. Most-favoured nation treatment- if a Member State enters into any agreement with a non-Member State where commitments are more favourable than that accorded under this Agreement, the other Member States have the right to request for negotiations with that Member State to request for the incorporation herein of treatment no less favourable than that provided under the aforesaid agreement. The decision to extend such tariff preference will be on a unilateral basis. The extension of such tariff preference shall be accorded to all Member States.[2]

4. Full tariff reduction schedules- Member States shall eliminate import duties on all products traded between the Member States by 2010 for ASEAN-6[3] and by 2015, with flexibility to 2018, for CLMV[4].[5]

5. Streamlined and unified provisions on modification of concessions and trade remedies- In exceptional circumstances where a Member State faces unforeseen difficulties in implementing its tariff commitments, that Member State may temporarily modify or suspend a concession contained in its Schedules.[6]

6. Trade facilitation and related chapters- The ATIGA has taken into account, and dedicated chapters on Trade Facilitation and for each of the relevant sectors, i.e. (i) customs, (ii) standards, technical regulation and conformity assessment procedures; and (iii) SPS Measures. The ATIGA details disciplines in these areas to ensure clear and consistent application of trade procedures; and establishes formalised contact points of customs authorities to facilitate the resolution of customs-related issues that arise during import/export of goods.

7. Trade repository- An ASEAN Trade Repository containing trade and customs laws and procedures of all Member States shall be established and made accessible to the public through the internet. The ASEAN Trade Repository shall contain trade related information such as (i) tariff nomenclature; (ii) MFN tariffs, preferential tariffs offered under this Agreement and other Agreements of ASEAN with its Dialogue Partners; (iii) Rules of Origin; (iv) non-tariff measures; (v) national trade and customs laws and rules; (vi) procedures and documentary requirements; (vii) administrative rulings; (viii) best practices in trade facilitation applied by each Member State; and (ix) list of authorized traders of Member States.[7]

8. Issuance of Legal Enactments
- ATIGA provides for the issuance of a single legal enactment for the whole tariff reduction schedule
- No later than 90 days for ASEAN 6 and 6 months after entry into force for CLMV.
- Would have retroactive effect from 1 January of the year of entry into force
- In case where single legal enactment cannot be issued, legal enactment would be issued 3 months before tariff reduction takes into effect

What is the status of this agreement?

1. Draft text substantially concluded/legally scrubbed
2. Considered and endorsed by the 22nd AFTA Council, 26 August 2008
3. Signing by 14th ASEAN Summit, February 2009.

What are the concerns of various groups over this agreement?

1. Lack of public consultations- It is required under the Tariff and Customs and under the current set-up of the Committee and Trade Related Matter that before negotiating a trade policy position, public hearings should be made so that the people could register their concerns over a trade agreement. In the negotiation of this agreement, no prior public consultations were made. Public consultations, characterized by lack of transparency, were conducted only after the negotiation has been concluded;

2. The agreement should be submitted to the Senate for ratification given the direction of the agreement towards a legal framework and rules-based system;

3. The agreement should not be in conflict with Philippine domestic laws and international commitments; and

4. Philippines should not accelerate tariff reductions given the fiscal problem that it is facing and given the global financial crisis affecting US and Europe. The timelines for tariff reduction implementation should consider the development needs of the country with a view of revisiting and postponing even the accelerated timetables for zero tariff levels beyond 2010. Under ASEAN-CEPT, tariffs on the remaining 40% shall be eliminated not later than 2010. Accelerating said tariff elimination, ATIGA requires that Import duties of at least 80% tariff lines are eliminated even as early as 2009.

Sources:

1. Association of Petrochemical Manufacturers of the Philippines, Inc. (APMP)
2. ASEAN Economic Ministers 2008: Media Factsheet on ATIGA
3. Department of Trade and Industry
4. Final draft of the ASEAN Trade in Goods Agreement
5. Protocol to Amend the Agreement on the Common Effective Preferential Tariff (CEPT) Scheme for the ASEAN Free Trade Area (AFTA) for the Elimination of Import Duties, 31 January 2003
6. Tariff Commission

Endnotes:

[1] Article 1, ASEAN Trade on Goods Agreement
[2] Article 5, ATIGA
[3] “ASEAN-6” refers to Brunei Darussalam, Indonesia, Malaysia, the Philippines, Singapore and
Thailand.
[4] “CLMV” refers to Cambodia, Lao PDR, Myanmar and Viet Nam.
[5] Article 19, ATIGA
[6] Article 23, ATIGA
[7] Article 13, ATIGA