Elimination of Non-Tariff Barriers (Ntbs) and Quantitative Restrictions (Qr)

For products with a tax rate above 20%, the tax reduction will be carried out in two steps: down to 20% from January 1, 1998 and will be further reduced to 0%-5% on January 1, 2003. As for products with a tax rate equal to or lower than 20%, the tax will be reduced to 0%-5% until January 1, 2002 for ASEAN-6. For Vietnam, this deadline is January 1, 2006, for Laos and Myanmar, January 1, 2008 and January 1, 2010 for Cambodia.

b) Temporary Exclusion List (TEL) :

Including items that have not been included in the immediate tariff reduction because ASEAN member countries have to spend more time adjusting domestic production and adapting to the increasingly competitive international environment.

After 3 years from the start of participating in the CEPT program, ASEAN countries must start gradually transferring items from TEL to IL, which means starting to reduce tariffs on this item. The process of transferring items from TEL to IL is allowed to last for 5 years, each year 20% of the items must be transferred. That means that by the end of the 8th year, IL will have expanded to cover the entire TEL and TEL will no longer exist. When putting each item into IL, countries must also indicate the tariff reduction schedule for that item until the CEPT program is completed.

For example : When joining the CEPT program in 1995, IL of country A included 50 items, TEL of this country had 100 items. From 1998, country A must start converting TEL to IL. If each year the conversion is 20%, then in 1998, IL of this country had 50 + (100 * 20%) = 70 items and TEL decreased to 100 - (100 * 20%)

) = 80 items. In 1999 IL will be 90 and TEL will be 60. The next three years, the corresponding figures will be 110/40, 130/20, 150/0. That is, by 2002, IL of country A will include all 150 items and TEL will have no items.

The Ministry of Finance said that up to now, implementing the ASEAN Common Effective Preferential Tariff (CEPT/AFTA) program, Vietnam has reduced tariffs for a series of product groups, of which over 53% of product groups have a 0% tax rate. The remaining 6 old member countries including Brunei, Indonesia, Malaysia, the Philippines, Singapore and

Thailand has basically completed tax reduction under CEPT/AFTA with over 60% of items having 0% tax rate.

For new member countries to have a necessary time to adapt. The CEPT Agreement allows these member countries to temporarily introduce some products that have not yet implemented the tax reduction process according to CEPT regulations.

b) General Exception List (GEL ):

This is a list of goods and products that do not participate in the CEPT Agreement and are therefore not included in AFTA for reasons of affecting national security, social ethics, human health and life, and the preservation of cultural, artistic, historical and archaeological values.

c) Sensitive List and Highly Sensitive List (SL):

The highly sensitive list includes unprocessed agricultural products for which tariff reductions could have a major impact on domestic production and life.

Specific provisions on the tariff reduction schedule for sensitive products are still under negotiation. However, for products in the sensitive list, the starting date for the reduction has been determined to be 1/1/2001 and ending in 2010 with the tariff rate having to reach 0-5%. For products in the highly sensitive list, the end date has been determined to be 2010, however, there will be certain flexibilities applied regarding the ending tariff rate, self-defense measures to prevent unforeseen events, etc. CEPT, when completed in 2003, will basically cover 98% of ASEAN tariff lines in 2003; the remaining only about 1% will be excluded and some sensitive agricultural products will be extended to 2010.

In addition, when applying the CEPT Agreement, it is necessary to pay attention to the CEPT Agreement's concession exchange mechanism: Concessions when implementing CEPT by countries are exchanged on the principle of reciprocity. To enjoy tariff concessions when exporting goods within the bloc, a product must meet the following conditions:

 The product must be on the tariff reduction list of the exporting and importing countries and must have a tariff (import) rate equal to or lower than 20%;

 The product must have a tax reduction program approved by the AFTA Council;

 The product must be an ASEAN product, meaning it must satisfy the requirement of having an origin from an ASEAN member country (domestic content) of at least 40%.

The formula for 40% ASEAN content is as follows:

A+B

FOB price

x 100% = T %

T must 60%

In there:

A: Is the input value of raw materials, parts or products imported from countries outside ASEAN, calculated at CIF price at the time of import.

B: Is the input value of raw materials, parts or products of unidentified origin, calculated at the price determined before being processed in the territory of ASEAN member countries.

If a product meets these three requirements, it will enjoy full preferential treatment from the importing countries. To determine whether a product is eligible for preferential tariffs under the CEPT program, each member country must annually publish a CEPT preferential exchange document that shows the tariff rates of CEPT products and products that are eligible for preferential treatment.

However, the rate of tariff reduction of member countries is not the same. For example, if Singapore is a completely free market, Thailand

remains a country with the highest average tariff rate. The situation is further complicated by the fact that most ASEAN countries are members of the World Trade Organization, so some countries, such as the Philippines, have invoked the Uruguay Round Agreement on Agricultural Products to delay their participation in tariff reduction, and some countries, such as Indonesia, have even implicitly declared that they will withdraw the list of processed agricultural products from the CEPT schedule.

5.2. Contents of eliminating non-tariff barriers (NTBs) and quantitative restrictions (QR)

To complete AFTA, Article 5 of the CEPT Agreement also sets the goal of eliminating non-tariff barriers and quantitative restrictions, import quotas, import licenses with quantitative restrictions, etc. within 5 years after a product enjoys tariff preferences. The CEPT Agreement stipulates:

 Member countries shall eliminate all quantitative restrictions on products in the CEPT on the basis of enjoying the preferences applicable to that product.

 Other non-tariff barriers will be gradually eliminated within 5 years after the product enjoys incentives;

 Foreign exchange restrictions currently applied by countries will be given special priority for CEPT products.

 Move towards unifying quality standards, publicizing policies and recognizing each other's quality certifications

 In case of emergency (sudden increase in imports that harms domestic production or threatens the balance of payments), countries can apply precautionary measures to limit or stop imports.

 With the objective of the Agreement, in 1995 ASEAN countries established a working group on non-tariff barriers to identify and develop a program to eliminate non-tariff barriers affecting regional trade. Based on the results of the working group, the countries identified many measures that have a broad and major impact on trade in goods.

The main barriers in the ASEAN region are customs surcharges and trade barriers (TBT). On that basis, at the eighth AFTA Council meeting, ASEAN countries agreed to decide that the deadline for eliminating trade barriers is the end of 2003.

5.3. Cooperation in the field of Customs:

Customs cooperation is a very important step in the implementation process of CEPT/AFTA. The contents of this cooperation include:

Countries will develop a green corridor system : The 1st AFTA Council CEPT Meeting adopted the Recommendation of the ASEAN Directors-General of Customs Meeting to develop a customs Green Channel system and implement it from January 1, 1996.

ASEAN countries will unify Customs procedures : ASEAN member countries agree on two essential issues in unifying Customs procedures:

 Common customs declaration form for goods under the CEPT Agreement: All goods traded under the CEPT Agreement must have a certificate of origin (C/O) form D to determine that the goods have at least 40% ASEAN content. After that, the goods must complete customs procedures. Since the customs declarations of member countries are similar, the procedure can be simplified by combining the above three types of declarations into a common declaration form for goods under the CEPT Agreement.

 Common import-export procedures: To develop common import-export procedures within ASEAN, member countries are focusing on the following issues:

 Procedures before filling out export declaration.

 Procedures before filling out import declaration

 Goods inspection issues.

 Shipment issues where the Certificate of Origin is issued later and with retroactive effect.

 Issues related to refund.

Countries will unify common tariff schedules : ASEAN member countries use tariff schedules according to the Harmonized System of the Customs Cooperation Council (HS) at different levels, from 6 to 10 digits. The 26th ASEAN Economic Ministers Meeting in September 1995 decided to unify tariff schedules within ASEAN at the 8-digit level.

ASEAN countries will unify the Customs valuation system : ASEAN member countries committed to implementing the customs valuation method according to GATT-GTV (GATT transactions value) at the Uruguay Round of GATT (except for Vietnam because Vietnam has not yet become a member of GATT/WTO) in 2000 as stated in the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade in 1994 to calculate customs valuation.

Chapter II. CURRENT SITUATION OF VIETNAM'S GOODS EXPORT TO ASEAN MARKET FROM 1996 UP TO PRESENT:

I. CURRENT STATUS OF VIETNAM'S EXPORT OF GOODS TO EACH ASEAN MEMBER COUNTRY FROM 1996 UP TO PRESENT

Currently, Vietnam has exported goods to all 10 ASEAN countries. However, the export turnover and proportion to these countries have significant differences, in which exports to Singapore are the largest. Below, we will study Vietnam's export of goods to each ASEAN country according to the decreasing proportion in Vietnam's total export to the ASEAN market in 2005.

1. Singapore:

Singapore is Vietnam's largest trading partner and most important investor among ASEAN countries. Singapore is also the country with the most developed economy in the bloc: In 2005, GNP per capita reached 25,191.2 USD, with a high economic growth rate of 7-9%/year [19].

Singapore officially established diplomatic relations with Vietnam in August 1973 and the two sides signed a number of agreements to create a favorable economic cooperation environment. The two sides also established the Vietnam - Singapore Business Cooperation Council. Singapore has always led ASEAN countries in trade with Vietnam with over 55% of Vietnam's trade turnover with the entire bloc [20]. Singapore is also the largest import market from Vietnam among ASEAN countries.

Table 1 : Export turnover of goods to Singapore during 1996-2005

Unit: Million USD

Year

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

Turnover

export

380.3

592.8

678.8

889.4

1,157.3

1,451.6

960.7

1,025.0

1,370.0

1749.5

Speed

growth

55.9%

14.5%

31.0 %

30.1%

25.4%

- 33.7%

6.7%

33.8%

27.7%

Maybe you are interested!

(Source: Baby Commerce)

Through the above table, we can see that Vietnam's export turnover to Singapore has increased over the years. However, the increase rate over the years has not been even, especially in 2002 when the turnover decreased to 960.7 million USD, the main reason for this decrease is due to the change in Singapore's import structure, gradually reducing imports of raw materials, finished products, and increasing imports with high added value.

Vietnamese exports to Singapore are divided into 3 groups.

main:

Group 1: Group of unprocessed products (including vegetable oil)

Group 2: Primary products and industrial goods

Group 3: Industrial goods group

In which, group 1 accounts for the highest proportion and will continue to grow in the future.

next year. Below is a table of data on the 20 largest export items from Vietnam to Singapore in the first quarter of 2006:

Table 2:

10 items with the largest export turnover from Vietnam to Singapore

in the first quarter of 06

STT

Product name	Import turnover Quarter I/06 (SGD)	Compared to same year 2005
1	Petroleum products	926,085,000	38.7%
2	Office equipment spare parts	74,174,000	68.2%
3	Telecommunication equipment	59,304,000	94.1%
4	Data processing machine	57,730,000	37.7%
5	Solenoid valve	41,110,000	184.0%
6	Drugs	40,861,000	-22.2%
7	Multi-purpose petroleum products	34,097,000	98.4%
8	drink with caution	28,096,000	91.9%
9	Household and commercial machines	27,020,000	-49.4%
10	Basic polyethylene	25,581,000	30.6%

(Source: Be Thuong Mai ) The total export turnover of the 10 above items is 1,314,058,000 SGD, accounting for

60.2% of total export turnover of Vietnam to Singapore in the first quarter of 2006, increased by 36.9% compared to the same period in 2005. If we consider the structure of export and import goods between Vietnam and Singapore, we can see that crude oil accounts for a very large proportion, which is decisive for the increase and decrease of export and import between the two countries. Specifically, export turnover

Comment