Database
on Basic Documents of Japan-ASEAN Relations
Department of
Advanced Social and International Studies,
FRAMEWORK
AGREEMENT ON COMPREHENSIVE ECONOMIC COOPERATION BETWEEN THE ASSOCIATION OF
SOUTHEAST ASIAN NATIONS AND THE
PREAMBLE
WE, the Heads of
State/Government of Brunei Darussalam, the Kingdom of Cambodia (Cambodia), the
Republic of Indonesia (Indonesia), the Lao People's Democratic Republic (Lao
PDR), Malaysia, the Union of Myanmar (Myanmar), the Republic of the Philippines
(the Philippines), the Republic of Singapore (Singapore), the Kingdom of
Thailand (Thailand) and the Socialist Republic of Viet Nam (Viet Nam), Member
States of the Association of Southeast Asian Nations (collectively, “ASEAN” or “ASEAN Member States”, or individually, “ASEAN Member State”), and the Republic of India (India);
RECALLING that in
2002, we had agreed on the importance of enhancing our close economic
cooperation and to work towards an ASEAN-India Regional Trade and Investment
Area (RTIA) as a long-term objective;
DESIRING to adopt
a Framework Agreement on Comprehensive Economic Cooperation (this Agreement)
between ASEAN and
DESIRING to
minimise barriers and deepen economic linkages between the Parties; lower
costs; increase intra-regional trade and investment; increase economic
efficiency; create a larger market with greater opportunities and larger
economies of scale for the businesses of the Parties; and enhance the
attractiveness of the Parties to capital and talent;
RECOGNISING the
important role and contribution of the business sector in enhancing trade and
investment between the Parties and the need to further promote and facilitate
their cooperation and utilisation of greater business opportunities provided by
the ASEAN-India RTIA;
RECOGNISING the
different stages of economic development among ASEAN Member States and the need
for flexibility, including the need to facilitate the increasing participation
of Cambodia, Lao PDR, Myanmar and Viet Nam (the New ASEAN Member States) in the
ASEAN-India economic co-operation and the expansion of their exports, inter
alia, through the strengthening of their domestic capacity, efficiency and
competitiveness;
REAFFIRMING the
rights, obligations and undertakings of the respective parties under the World
Trade Organisation (WTO), and other multilateral, regional and bilateral
agreements and arrangements; and
RECOGNISING that
regional trade arrangements can contribute towards accelerating regional and
global liberalisation and as building blocks in the framework of the
multilateral trading system,
HAVE AGREED AS
FOLLOWS:
ARTICLE 1
Objectives
The objectives of
this Agreement are to:
(a) Strengthen and
enhance economic, trade and investment co-operation between the Parties;
(b) Progressively
liberalise and promote trade in goods and services as well as create a
transparent, liberal and facilitative investment regime;
(c) Explore new
areas and develop appropriate measures for closer economic co-operation between
the Parties; and
(d) Facilitate the
more effective economic integration of the new
ARTICLE 2
Measures For Economic Cooperation
The Parties agree
to enter into negotiations in order to establish an ASEAN-India Regional Trade
and Investment Area (RTIA), which includes a Free Trade Area (FTA) in goods,
services and investment, and to strengthen and enhance economic cooperation
through the following:
(a) Progressive
elimination of tariffs and non-tariff barriers in substantially all trade in
goods;
(b) Progressive
liberalisation of trade in services with substantial sectoral coverage;
(c) Establishment
of a liberal and competitive investment regime that facilitates and promotes
investment within the ASEAN-India RTIA;
(d) Provision of
special and differential treatment to the New ASEAN Member States;
(e) Provision of
flexibility to the Parties in the ASEAN-India RTIA negotiations to address
their sensitive areas in the goods, services and investment sectors with such
flexibilities to be negotiated and mutually agreed based on the principle of
reciprocity and mutual benefits;
(f) Establishment
of effective trade and investment facilitation measures, including, but not
limited to, simplification of customs procedures and development of mutual
recognition arrangements;
(g) Expansion of
economic cooperation in areas as may be mutually agreed between the Parties
that will complement the deepening of trade and investment links between the
Parties and formulation of action plans and programmes in order to implement
the agreed sectors/areas of co-operation; and
(h) Establishment
of appropriate mechanisms for the purposes of effective implementation of this
Agreement.
ARTICLE 3
Trade In Goods
(1) With a view to
expediting the expansion of trade in goods, the Parties agree to enter into
negotiations in which duties and other restrictive regulations of commerce
(except, where necessary, those permitted under Article XXIV (8)(b) of the WTO
General Agreement on Tariffs and Trade (GATT)) shall be eliminated on
substantially all trade in goods between the Parties.
(2) For the
purposes of this Article, the following definitions shall apply unless the
context otherwise requires:
(a) “applied Most Favoured Nation (MFN) tariff rates” shall refer to the respective applied rates
of the Parties as of 1 July 2004; and
(b) “non-tariff measures” shall include non-tariff barriers.
(3) Upon signing of
this Agreement, the Parties shall commence consultations on each other’s trade regime, including, but not limited to
the following:
(a) trade and
tariff data;
(b) customs
procedures, rules and regulations;
(c) non tariff
measures including, but not limited to import licensing requirement and
procedure, quantitative restrictions, technical barriers to trade, sanitary and
phytosanitary;
(d) intellectual property rights rules and regulations; and
(e) trade policy.
(4) The tariff
reduction or elimination programme of the Parties shall require tariffs on
listed products to be gradually reduced and, where applicable, eliminated in
accordance with this Article.
(5) The products
which are subject to the tariff reduction or elimination programme under this
Article shall include all products not covered by the Early Harvest Programme
(EHP) under Article 7 of this Agreement, and such products shall be categorised
into two tracks as follows:
(a) Normal Track: Products
listed in the Normal Track by a Party on its own accord shall have their
respective applied MFN tariff rates gradually reduced or eliminated in
accordance with specified schedules and rates (to be mutually agreed by the
Parties) over a period from:
(i) 1 January 2006 to 31 December 2011
for
(ii) 1 January
2006 to 31 December 2016 for the
(iii) 1 January 2006 to 31 December 2011 for
In respect of
those tariffs which have been reduced but have not been eliminated, they shall
be progressively eliminated within timeframes to be mutually agreed between the
Parties.
(b) Sensitive
Track:
(i) The number of
products listed in the Sensitive Track shall be subject to a maximum ceiling to
be mutually agreed among the Parties.
(ii) Products
listed in the Sensitive Track by a Party on its own accord shall, where
applicable, have their respective applied MFN tariff rates progressively
reduced/eliminated within timeframes to be mutually agreed between the Parties.
(6) The commitments
undertaken by the Parties under this Article and Article 7 of this Agreement
shall fulfil the WTO requirements to eliminate tariffs on substantially all the
trade between the Parties.
(7) The specified tariff
rates/tariff preferences to be mutually agreed between the Parties pursuant to
this Article shall set out only the limits of the applicable tariff
rates/preferences or range for the specified year of implementation by the
Parties.
(8) The
negotiations between the Parties to establish the ASEAN-India RTIA covering
trade in goods shall also include, but not be limited to the following:
(a) modalities,
including detailed rules governing the tariff reduction and/or elimination;
(b) Rules of Origin;
(c) treatment
of out-of-quota rates;
(d) modification
of a Party’s commitments under the agreement on trade in
goods based on WTO agreements;
(e) non-tariff measures/barriers, including,
but not limited to, quantitative restrictions or prohibition on the importation
of any product or on the export or sale for export of any product, as well as
sanitary and phytosanitary measures and technical barriers to trade;
(f) safeguards
based on the WTO agreements;
(g) disciplines
on subsidies and countervailing measures and anti-dumping measures based on the
existing WTO agreements; and
(h)
facilitation and promotion of effective and adequate protection of
trade-related aspects of intellectual property rights based on existing WTO,
World Intellectual Property Organisation (WIPO) and other relevant agreements.
ARTICLE 4
Trade In Services
With a view to
expediting the expansion of trade in services, the Parties agree to enter into
negotiations to progressively liberalise trade in services on a preferential
basis with substantial sectoral coverage.
Such negotiations shall be directed to:
(a) progressive
elimination of substantially all discrimination between or among the Parties
and/or prohibition of new or more discriminatory measures with respect to trade
in services between the Parties, except for measures permitted under Article
V(1)(b) of the WTO General Agreement on Trade in Services (GATS);
(b) expansion in the depth and scope of liberalisation of trade
in services beyond those undertaken by
(c) enhanced cooperation in services between the Parties in
order to improve efficiency and competitiveness, as well as to diversify the
supply and distribution of services of the respective service suppliers of the
Parties.
ARTICLE 5
Investment
To promote
investments and to create a liberal, facilitative, transparent and competitive
investment regime, the Parties agree to:
(a) enter into negotiations in order to progressively liberalise
their investment regimes;
(b) strengthen cooperation in investment, facilitate investment
and improve transparency of investment rules and regulations; and
(c) provide for the protection of investments.
ARTICLE 6
Areas of Economic
Cooperation
(1) Where
appropriate, the Parties agree to strengthen their cooperation in the following
areas, including, but not limited to:
(a) Trade Facilitation:
(i) Mutual
Recognition Arrangements, conformity assessment, accreditation procedures, and
standards and technical regulations;
(ii) non-tariff measures;
(iii) customs cooperation;
(iv) trade financing; and
(v) business visa and travel facilitation.
(b) Sectors of
Cooperation:
(i) agriculture, fisheries and forestry;
(ii) services: media and entertainment, health, financial,
tourism, construction, business process outsourcing, environmental;
(iii) mining and energy: oil
and natural gas, power generation and supply;
(iv) science and technology: information and communications
technology, electronic-commerce, biotechnology;
(v) transport and infrastructure: transport and communication;
(vi)
manufacturing: automotive, drugs and
pharmaceuticals, textiles, petrochemicals, garments, food processing,
leather goods, light engineering goods, gems and jewellery processing;
(vii) human resource development: capacity building, education,
technology transfer; and
(viii) others: handicrafts, small and medium enterprises,
competition policy, Mekong Basin Development, intellectual property rights,
government procurement.
(c) Trade and
Investment Promotion:
(i) fairs and exhibitions;
(ii) ASEAN-India
weblinks; and
(iii) business sector
dialogues.
(2) The Parties
agree to implement capacity building programmes and technical assistance,
particularly for the New ASEAN Member States, in order to adjust their economic
structure and expand their trade and investment with
(3) Parties may
establish other bodies as may be necessary to coordinate and implement any economic
cooperation activities undertaken pursuant to this Agreement.
ARTICLE 7
Early Harvest
Programme
(1) With a view to accelerating the
implementation of this Agreement, the Parties agree to implement an EHP, which
is an integral part of the ASEAN-India RTIA, for products covered under
paragraph 3(a) below. The progressive tariff reduction under the EHP shall
commence from 1 November 2004, and tariff elimination shall be completed by 31
October 2007 for ASEAN-6 and
(2) For the purposes of this Article, the
following definitions shall apply unless the context otherwise requires:
(a) “ASEAN 6” refers to
(b) “applied MFN tariff rates” shall refer to the respective applied rates of the Parties as of 1
July 2004.
(3) The product coverage, tariff reduction
and elimination, removal of non-tariff barriers, rules of origin, trade
remedies and emergency measures applicable to the EHP shall be as follows:
(a) Product
Coverage
(i) Common products on which the Parties
agree to exchange tariff concessions are listed in Annex A.
(ii) Products on
which
(b) Modality for
Tariff Reduction and Elimination
The modality for
tariff reduction and elimination for the products covered by the EHP shall be
finalised under Article 8(2) of this Agreement.
(c) Removal of non-tariff measures
In order to fully realise the potential
benefits of the EHP, the parties shall promote and facilitate trade in all
products listed in the EHP. The parties shall also endeavour to refrain from
using non-tariff measures adversely affecting trade in Early Harvest products.
(d) Rules of
Origin
Products covered
by the EHP shall qualify for tariff preferences in accordance with the Rules of
Origin to be agreed under Article 8(2) of this Agreement.
(e) Application of WTO
provisions
The WTO provisions
governing modification of commitments, safeguard actions, emergency measures
and other trade remedies, including anti-dumping and subsidies and
countervailing measures, shall, in the interim, be applicable to the products
covered under the EHP and shall be superseded and replaced by the relevant
disciplines negotiated and agreed to by the Parties under Article 3(8) of this
Agreement once these disciplines are implemented.
(4) The Parties shall also
explore the feasibility of cooperation in the areas listed in Annex C.
ARTICLE 8
Timeframes
(1) For trade in
goods, negotiations on the agreement for tariff reduction/elimination and other
matters as set out in Article 3 of this Agreement shall commence in January
2004 and be concluded by 30 June 2005 in order to establish the ASEAN-India
FTA.
(2) The
negotiations on Rules of Origin for trade in goods under Articles 3 and 7 and
modality for tariff reduction and elimination under Article 7 shall be
concluded no later than 31 July 2004.
(3) For trade in
services and investments, the negotiations on the respective agreements shall
commence in 2005 and be concluded by 2007. The identification, liberalisation,
etc., of the sectors of services and investment shall be finalised for
implementation subsequently in accordance with the timeframes to be mutually
agreed: (a) taking into account the sensitive sectors of the Parties; and (b)
with special and differential treatment and flexibility for the New ASEAN
Member States.
(4) For other
areas of economic cooperation, the Parties shall continue to build upon
existing or agreed programmes set out in Article 6 of this Agreement, develop
new economic cooperation programmes and conclude agreements on the various
areas of economic cooperation. The
Parties shall do so expeditiously for early implementation in a manner and at a
pace acceptable to all the Parties concerned. The agreements shall include
timeframes for the implementation of the commitments therein.
ARTICLE 9
Most-Favoured
Nation Treatment
ARTICLE 10
General Exceptions
Subject to the
requirement that such measures are not applied in a manner which would
constitute a means of arbitrary or unjustifiable discrimination between or
among the Parties where the same conditions prevail, or a disguised restriction
on trade within the ASEAN-India FTA, nothing in this Agreement shall prevent
any Party from taking action and adopting measures for the protection of its
national security or the protection of articles of artistic, historic and
archaeological value, or such other measures which it deems necessary for the
protection of public morals, or for the protection of human, animal or plant
life, health and conservation of exhaustible natural resources.
ARTICLE 11
Dispute Settlement
Mechanism
(1) The Parties
shall, within one (1) year after the date of entry into force of this
Agreement, establish appropriate formal dispute settlement procedures and
mechanism for the purposes of this Agreement.
(2) Pending the
establishment of the formal dispute settlement procedures and mechanism under
paragraph 1 above, any disputes concerning the interpretation, implementation
or application of this Agreement shall be settled amicably by mutual
consultations.
ARTICLE 12
Institutional
Arrangements for the Negotiations
(1) There shall be
established an ASEAN-India Trade Negotiating Committee (TNC) to carry out the
programme of negotiations set out in this Agreement.
(2) The
ASEAN-India TNC may invite experts or establish any Working Group as may be
necessary to assist in the negotiations of all sectors in the ASEAN-India RTIA.
(3) The
ASEAN-India TNC shall regularly report to the Minister of Commerce and Industry
of India and the ASEAN Economic Ministers (AEM-India Consultations), through
the meetings of the ASEAN Senior Economic Officials and
(4) The Ministry
of Commerce and Industry, Government of India, and the ASEAN Secretariat shall
jointly provide the necessary secretariat support to the ASEAN-India Trade
Negotiating Committee (TNC) whenever and wherever negotiations are held.
ARTICLE 13
Miscellaneous
Provisions
(1) This Agreement
shall include the Annexes and the contents therein, and all future legal
instruments agreed pursuant to this Agreement.
(2) Except as
otherwise provided in this Agreement, this Agreement or any action taken under
it shall not affect or nullify the rights and obligations of a Party under
existing agreements to which it is a party.
(3) The Parties
shall endeavour to refrain from increasing restrictions or limitations that
would affect the application of this Agreement.
(4) Any
ARTICLE 14
Amendments
The provisions of
this Agreement may be modified through amendments mutually agreed upon in
writing by the Parties.
ARTICLE 15
Depository
For the ASEAN
Member States, this Agreement shall be deposited with the Secretary-General of
ASEAN, who shall promptly furnish a certified copy thereof to each
ARTICLE 16
Entry into Force
(1) This Agreement
shall enter into force on 1 July 2004.
(2) The Parties
undertake to complete their internal procedures for the entry into force of
this Agreement prior to 1 July 2004.
(3) Where a Party
is unable to complete its internal procedures for the entry into force of this
Agreement by 1 July 2004, the Agreement shall come into force for that Party
upon the date of notification of the completion of its internal procedures. The
Party concerned, however, shall be bound by the same terms and conditions,
including any further commitments that may have been undertaken by the other
Parties under this Agreement by the time of such notification.
(4) A Party shall
upon the completion of its internal procedures for the entry into force of this
Agreement notify all the other parties in writing.
IN WITNESS
WHEREOF, we have signed this Framework Agreement on Comprehensive Economic
Cooperation between the Association of Southeast Asian Nations and the
DONE
at