ZERO TARIFFS IN SIX ASEAN COUNTRIES FROM JAN 1, 2010

From Ahmad Fuad Yahya

JAKARTA, Dec 31 (Bernama) -- Beginning Friday, six Asean member countries
namely Brunei Darussalam, Indonesia, Malaysia, the Philippines, Singapore and
Thailand can import and export almost all goods across their borders at zero
tariff.

As of Jan 1, 2010, an additional 7,881 tariff lines will come down to zero
tariffs in the Asean-6, bringing the total tariff lines traded under the Common
Effective Preferential Tariffs for Asean Free Trade Area (CEPT-AFTA) to 54,457
or 99.11 per cent.

Additionally, with the reduction, the average tariff rate for these
countries is expected to further decrease from 0.79 per cent in 2009 to just
0.05 per cent in 2010, the Asean Secretariat said in a statement here Thursday.

In 2008, intra-Asean import value of commodities for these 7,881 tariff
lines amounted to US$22.66 billion, or 11.84 per cent of Asean-6 import value
within Asean.

The tariff lines include final consumer products such as air conditioners;
chilli, fish and soya sauces; as well as intermediate materials such as
motorcycle components and motor car cylinders.

Other products include iron and steel, plastics, machinery and mechanical
appliances, chemicals, prepared foodstuff, paper, cement, ceramic and glass
sectors.

The statement said the elimination of tariffs by Asean-6 underscores
Asean's commitment to dismantle tariffs and keep intra-Asean trade open.

It would also serve as a catalyst for the development of the single market
and production base projected by the Asean Economic Community (AEC) Blueprint.

The actual impact and how much this final instalment would be translated
into savings for consumers would depend on the market dynamics of the respective
Asean-6 countries, it said.

Asean Secretary-General Dr Surin Pitsuwan said: " We sincerely hope all
parties will act to ensure that the man on the street will benefit from these
reductions in tariffs."

As for the business community, especially the downstream producers, Dr
Surin said that they also stood to gain.

" Lower cost of inputs will allow the business community a wider choice of
goods, and in the process, they will move towards becoming more competitive
globally, as envisaged in the AEC Blueprint," he added.

The CEPT-AFTA covers the entire range of products traded by the Asean member
countries and provides for the gradual reduction in tariffs of these products,
which has been ongoing since 1993.

Under the CEPT-AFTA schedule for tariff reduction, each member country is
allowed to place their products in the normal track, where the commitment is for
the tariffs to be reduced to zero by 2010 for Asean-6 and 2015 for Cambodia,
Laos, Myanmar and Vietnam.

In 2010, these countries will also see tariff reductions under the CEPT-AFTA
commitments to 5 per cent, where the average tariff rate will decrease from 3
per cent in 2009 to 2.61 per cent.

Under the CEPT-AFTA, agricultural products such as tobacco, coffee, live
animals and animal products, which come under the Sensitive List (SL), will
have their tariffs reduced to 5 per cent on 2010 and to zero tariff by 2015.

The Highly Sensitive List (HSL), comprising rice, will have their tariffs
capped on a specified date. As for the General Exclusion List (GEL), the tariffs
will remain based on factors such as national security and morals, health,
aesthetic and archaeological grounds.

As of today, 487 tariff lines or 0.89 per cent of tariff lines for Asean-6
still remain in the SL, HSL and GEL categories.
-- BERNAMA