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on Basic Documents of Japan-ASEAN Relations
Department of
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AGREEMENT ON THE COMMON EFFECTIVE PREFERENTIAL TARIFF (CEPT) SCHEME FOR
THE ASEAN FREE TRADE AREA (AFTA)
The Governments of Brunei Darussalam, the Republic of Indonesia,
Malaysia, the Republic of the Philippines, the Republic of Singapore and the
Kingdom of Thailand, Member States of the Association of South East Asian
Nations (ASEAN):
MINDFUL of the Declaration of ASEAN Concord signed in
RECALLING that the ASEAN Heads of Government, at their Third Summit
Meeting held in Manila on 13 - 15 December 1987, declared that Member States
shall strengthen intra-ASEAN economic cooperation to maximise
the realisation of the region's potential in trade
and development;
NOTING that the Agreement on ASEAN Preferential Trading Arrangements
(PTA) signed in
ADHERING to the principles, concepts and ideals of the Framework
Agreement on Enhancing ASEAN Economic Cooperation signed in
CONVINCED that preferential trading arrangements among ASEAN Member
States will act as a stimulus to the strengthening of national and ASEAN
Economic resilience, and the development of the national economies of Member
States by expanding investment and production opportunities, trade, and foreign
exchange earnings;
DETERMINED to further cooperate in the economic growth of the region by
accelerating the liberalisation of intra-ASEAN trade
and investment with the objective of creating the ASEAN Free Trade Area using
the Common Effective Preferential Tariff (CEPT) Scheme;
DESIRING to effect improvements on the ASEAN PTA in consonance with
ASEAN's international commitments;
HAVING AGREED AS FOLLOWS:
Article l: Definitions
For the purposes of this Agreement:
1. "CEPT" means the Common Effective Preferential Tariff, and
it is an agreed effective tariff, preferential to ASEAN, to be applied to goods
originating from
2. "Non-Tariff Barriers" mean measures other than tariffs which
effectively prohibit or restrict import or export of products within Member
States.
3. "Quantitative restrictions" mean prohibitions or
restrictions on trade with other Member States, whether made effective through
quotas, licences or other measures with equivalent
effect, including administrative measures and requirements which restrict
trade.
4. "Foreign exchange restrictions" mean measures taken by
5. "PTA" mean ASEAN Preferential
Trading Arrangements stipulated in the Agreements, signed in
6. "Exclusion List" means a list containing products that are
excluded from the extension of tariff preferences under the CEPT Scheme.
7. "Agricultural products" mean:
(a) agricultural raw materials/unprocessed products covered under
Chapters 1-24 of the Harmonised System (HS), and
similar agricultural raw materials/unprocessed products in other related HS
Headings; and
(b) products which have undergone simple
processing with minimal change in form from the original
products.
Article 2: General Provisions
1. All Member States shall participate in the CEPT Scheme.
2. Identification of products to be included in the CEPT Scheme shall be
on a sectoral basis, i.e., at HS 6-digit level.
3. Exclusions at the HS 8/9 digit level for specific products are
permitted for those Member States, which are temporarily not ready to include
such products in the CEPT Scheme. For specific products, which are sensitive to
a Member States, pursuant to Article 1 (3) of the Framework Agreement on
Enhancing ASEAN Economic Cooperation, a
4. A product shall be deemed to be originating from ASEAN Member States,
if at least 40% of its content originates from any
5. All manufactured products, including capital goods, processed
agricultural products and those products falling outside the definition of
agricultural products, as set out in this Agreement, shall be in the CEPT
Scheme. These products shall automatically be subject to the schedule of tariff
reduction, as set out in Article 4 of this Agreement. In respect of PTA items,
the schedule of tariff reduction provided in Article 4 of this Agreement shall
be applied, taking into account the tariff rate after the application of the
existing margin of preference (MOP) as at 31 December 1992.
6. All products under the PTA which are not transferred to the CEPT
Scheme shall continue to enjoy the MOP existing as at 31 December 1992.
7. Member States, whose tariffs for the agreed products are reduced from
20% and below to 0%-5%, even though granted on an MFN basis, shall still enjoy
concessions. Member States with tariff rates at MFN rates of 0%-5% shall be
deemed to have satisfied the obligations under this Agreement and shall also
enjoy the concessions.
Article 3: Product Coverage
This Agreement shall apply to all manufactured products, including
capital goods, processed agricultural products, and those products falling
outside the definition of agricultural products as set out in this Agreement.
Agricultural products shall be excluded from the CEPT Scheme.
Article 4: Schedule of Tariff Reduction
1. Member States agree to the following schedule of effective
preferential tariff reductions:
(a) The reduction from existing tariff rates to 20% shall be done within
a time frame of 5 years to 8 years, from 1 January 1993, subject to a programme of reduction to be decided by each
(b) The subsequent reduction of tariff rates from 20% or below shall be
done within a time frame of 7 years. The rate of reduction shall be at a
minimum of 5% quantum per reduction. A programme of
reduction to be decided by each
(c) For products with existing tariff rates of 20% or below as at 1
January 1993, Member States shall decide upon a programme
of tariff reductions, and announce at the start, the schedule of tariff
reductions. Two or more Member States may enter into arrangements for tariff
reductions to 0%-5% on specific products at an accelerated pace to be announced
at the start of the programme.
2. Subject to Articles 4(1)(b) and 4(1)(c) of
this Agreement, products which reach, or are at tariff rates of 20% or below,
shall automatically enjoy the concessions.
3. The above schedules of tariff reduction shall not prevent Member
States from immediately reducing their tariffs to 0%-5% or following an
accelerated schedule of tariff reduction.
Article 5: Other Provisions
A. Quantitative Restrictions and Non-Tariff Barriers
1. Member States shall eliminate all quantitative restrictions in respect
of products under the CEPT Scheme upon enjoyment of the concessions applicable
to those products.
2. Member States shall eliminate other non-tariff barriers on a gradual
basis within a period of five years after the enjoyment of concessions
applicable to those products.
B. Foreign Exchange Restrictions
Member States shall make exceptions to their foreign exchange
restrictions relating to payments for the products under the CEPT Scheme, as
well as repatriation of such payments without prejudice to their rights under
Article XVIII of the General Agreement on Tariff and Trade (GATT) and relevant
provisions of the Articles of Agreement of the International Monetary Fund
(IMF).
C. Other Areas of Cooperation
Member States shall explore further measures on border and non-border
areas of cooperation to supplement and complement the liberalisation
of trade. These may include, among others, the harmonisation
of standards, reciprocal recognition of tests and certification of products,
removal of barriers to foreign investment, macroeconomic consultations, rules
for fair competition, and promotion of venture capital.
D. Maintenance of Concessions
Member States shall not nullify or impair any of the concessions as
agreed upon through the application of methods of customs valuation, any new
charges or measures restricting trade, except in cases provided for in this
Agreement.
Article 6: Emergency Measures
1. If, as a result of the implementation of this Agreement, import of a
particular product eligible under the CEPT Scheme is increasing in such a
manner as to cause serious injury to sectors producing like or directly
competitive products in the importing Member States, the importing Member States
may, to the extent and for such time as may be necessary to prevent or to
remedy such injury, suspend preferences provisionally and without
discrimination, subject to Article 6(3) of this Agreement. Such suspension of
preferences shall be consistent with the GATT.
2. Without prejudice to existing international obligations, a
3. Where emergency measures are taken pursuant to this Article, immediate
notice of such action shall be given to the Council referred to in Article 7 of
this Agreement, and such action may be the subject of consultation as provided
for in Article 8 of this Agreement.
Article 7: Institutional Arrangements
1. The ASEAN Economic Ministers (AEM) shall, for the purposes of this
Agreement, establish a ministerial-level Council comprising one nominee from
each
2. Member States which enter into bilateral arrangements on tariff
reductions pursuant to Article 4 of this Agreement shall notify all other
3. The ASEAN Secretariat shall monitor and report to the SEOM on the
implementation of the Agreement pursuant to the Article III(2)(8)
of the Agreement on the Establishment of the ASEAN Secretariat. Member States
shall cooperate with the ASEAN Secretariat in the performance of its duties.
Article 8: Consultations
1. Member States shall accord adequate opportunity for consultations
regarding any representations made by other Member States with respect to any
matter affecting the implementation of this Agreement. The Council referred to
in Article 7 of this Agreement, may seek guidance from the AEM in respect of
any matter for which it has not been possible to find a satisfactory solution
during previous consultations.
2. Member States, which consider that any other Member State has not
carried out its obligations under this Agreement, resulting in the
nullifications or impairment of any benefit accruing to them, may, with a view
to achieving satisfactory adjustment of the matter, make representations or
proposal to the other Member States concerned, which shall give due
consideration to the representations or proposal made to it.
3. Any differences between the Member States concerning the
interpretation or application of this Agreement shall, as far as possible, be
settled amicably between the parties. If such differences cannot be settled
amicably, it shall be submitted to the Council referred to in Article 7 of this
Agreement, and if necessary, to the AEM.
Article 9: General Exceptions
Nothing in this Agreement shall prevent any Member State from taking action
and adopting measures, which it considers necessary for the protection of its
national security, the protection of public morals, the protection of human,
animal or plant life and health, and the protection of articles of artistic,
historic and archaeological value.
Article 10: Final Provisions
1. The respective Governments of Member States shall undertake the
appropriate measures to fulfil the agreed obligations
arising from this Agreement.
2. Any amendment to this Agreement shall be made by consensus and shall
become effective upon acceptance by all Member States.
3. This Agreement shall be effective upon signing.
4. This Agreement shall be deposited with the Secretary General of the
ASEAN Secretariat, who shall likewise promptly furnish a certified copy thereof
to each
5. No reservation shall be made with respect to any of the provisions of
this Agreement.
In-Witness Whereof, the undersigned, being duly authorised
thereto by their respective Governments, have signed this Agreement on Common
Effective Preferential Tariff (CEPT) Scheme for the ASEAN Free Trade Area
(AFTA).
Done at
For the Government of
sgd
ABDUL RAHMAN TAIB
Minister of Industry and Primary Resources
For the Government of the
sgd
DR ARIFIN M SIREGAR
Ministry of Trade
For the Government of
sgd
RAFIDAH AZIZ
Minister of International Trade and Industry
For the Government of the Republic of the
sgd
PETER D GARRUCHO JR
Secretary of Trade and Industry
For the Government of the
sgd
LEE HSIEN LOONG
Deputy Prime Minister and Minister for Trade and Industry
For the Government of The
sgd
AMARET SILA-ON
Minister of Commerce