ITO Draft

International Trade Organizations, Agreements and Rules of Origin
COURSE DESCRIPTION
This course is designated to present to the students the concept of international law its significance and
implications to the world and to the local community; the various international trade organization and
agreements to which the Philippines is a signatory; the various free trade areas and their respective
rules of origin.
CONTENT:
Comprehensive Tariff Review

A tariff, simply put, is a tax levied on an imported good. There are two types. A “unit” or specific
tariff is a tax levied as a fixed charge for each unit of a good that is imported – for instance $300
per ton of imported steel.
There are several types of tariffs and barriers that a government can employ:
a. Specific tariffs-A fixed fee levied on one unit of an imported good is referred to
as a specific tariff. This tariff can vary according to the type of goods imported.
For example, a country could levy a $15 tariff on each pair of shoes imported, but
levy a $300 tariff on each computer imported.
b. Ad valorem tariffs- An ad valorem tariff is a charge levied on imports, defined in

terms of a fixed percentage of value.
c. Licenses- Import licensing can be defined as administrative procedures requiring

the submission of an application or other documentation (other than those
required for customs purposes) to the relevant administrative body as a prior
condition for importation of goods.
d. Import quotas-An import quota is a type of trade restriction that sets a physical
limit on the quantity of a good that can be imported into a country in a given
period of time. Quotas, like other trade restrictions, are typically used to benefit
the producers of a good in that economy.
e. Voluntary export restraints-Voluntary export restraints (VER) are arrangements

between exporting and importing countries in which the exporting country agrees
to limit the quantity of specific exports below a certain level in order to avoid
imposition of mandatory restrictions by the importing country
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f. Local content requirements- Local content is the value that an extraction
project brings to the local, regional or national economy beyond the resource
revenues. The value brought to the local, regional or national economy from an
extraction project is referred to as the local content.
a. Multilateral Organizations and agreements

Multilateral organizations are formed by three or more nations to work on issues that are
relevant to each of them. They ensure participation by all in the management of world affairs
while ensuring the legitimacy of any relief efforts being implemented.
Examples of Multilateral Organization:

 a. World Health Organization
 b. World Bank
 c. UNICEF (United Nations International Children's Education Fund)
 d. UNDP (United Nations Development Program)
 e. USAID (United States Agency for International Development)
 f. USPHS (U.S. Public Health Service)
The Role of Multilateral Organization:

Multilateral organizations and governments increasingly engage in promoting and supporting
the development, testing and dissemination of social innovations to address the health care
delivery gap. They play an important role in creating an enabling environment.
b. Regional/Bilateral Organizations and Agreements

The term bilateral means "two sided" and refers to organizations that operate directly between
two well-defined parties, typically, two countries. A bilateral agency may restrict its interactions
to only two countries.
A bilateral organization is a government agency or non-profit organization that receives funding
from its home country's government to then be used toward a developing country.
This aid is more specifically targeted than multilateral aid, which may go through an international
organization such as the United Nations.
Who are bilateral partners?
Bilateral partners, such as USAID, CDC, and DFID, are instrumental in supporting MSH's wide
variety of health programs, which have supported maternal, newborn, and child health;
promoted access to medicines and health technologies; strengthened integrated health systems
delivery; and to combat infectious diseases
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c. Rules of Origin
Rules of origin are the criteria needed to determine the national source of a product. Their
importance is derived from the fact that duties and restrictions in several cases depend upon the
source of imports. There is wide variation in the practice of governments with regard to the rules
of origin.
What are the types of rules of origin?
a. Preferential ROO-Preferential rules or origin are those which apply in

reciprocal trade preferences (i.e. regional trade agreements or customs
unions) or in non-reciprocal trade preferences (i.e. preferences in favor of
developing countries or LDCs).
b. Non-preferential Rules of Origin- Non-preferential rules of origin are those
which apply in the absence of any trade preference — that is, when trade
is conducted on a most-favored nation basis. In the Agreement on Rules
of Origin, WTO members agreed to negotiate harmonized non-preferential
rules of origin.
d. TRIPS and TRIMS

The TRIPS Agreement established a minimum level of protection that WTO Members were
required to provide to the intellectual property of other Members. It covers such areas as
copyrights, trademarks, patents, geographical indications (GI), industrial and layout designs,
and undisclosed information (trade secrets).
The Agreement on Trade-Related Investment Measures (TRIMS) recognizes that certain

investment measures can restrict and distort trade. It states that WTO members may not apply
any measure that discriminates against foreign products or that leads to quantitative restrictions,
both of which violate basic WTO principles.
Investment measures are used primarily for planning and monitoring capital investments that
are not capitalized directly, due to their scope or the large percentage of in-house production
involved. Investment measures become relevant to asset accounting at period-end or at fiscal
year closing.
CONTENTS:
THE TARIFF REFORM PROGRAM (TRP)

 Is the review/restructuring of the Philippine tariff system that government undertakes on a continuing
basis to make the tariff structure responsive to the needs of the economy taking into account patterns in
trade and advancements in technology.
 In the 1970’s industrial and trade policies were biased towards import substituting activities which
resulted among others, in the over-protection of certain local, domestic market-oriented industries. Said
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excessive protection, in turn, led to the market distortions that discriminated against investments in
agriculture and exports and encouraged the production of finished consumer goods over intermediate
and capital goods.
HISTORY OF TRP:
• The initiative to reform the tariff system came from the recognition that over two decades of protection
through high tariffs have proved counter-productive rather than supportive of the country’s development
objectives.
• Realizing the need for a change in policy to remedy the situation, government policy shifted the emphasis
from import-substitution to promotion of exports.
• The government embarked on medium-term structural adjustment program starting 1981 with the basic
structure of industry to make it more efficient and competitive internationally.
• The two (2) main instruments of structural adjustment pursued by the government were the:
• Tariff Reform Program
• Import Liberalization Program
TARIFF REFORM PROGRAM (TRP) I- (1981 to 1985) Coverage:
• Note: Import Liberalization Program was briefly derailed by the Balance of Payments (BOP’s) in 1983.
• All headings from Chapters 1 to 99
• The tariff modifications were staged over a five (5) year period to cushion the impact of the changes on
the various sectors of the economy.
• In the institution of tariff reforms, a review of existing protective rates was conducted to remove of phase
out:
– Those which were excessive
– Those which have outlived their usefulness
– Where the burden of protection outweighed the return
• The modifications were expected to induce a shift in the composition of imports of raw materials from
those with advance processing to those which are more basic or in crude form.
• It emphasized inter-industry and inter-sectoral linkages in the economy
IMPACT OF TRP-I ON THE PROTECTION STRUCTURE
• On Nominal Tariffs-
– The tariff band was narrowed from 10% - 100% to 10% - 50%.
– As a consequence, the average Nominal Tariff fell from 42% in 1981 to 28% at the end of TRP I.
• On Effective Protection Rates (EPR)
– EPR (Effective Protection Rates) Defined as the percentage excess of domestic value added, made
possible by the imposition of tariffs and other protective measures on the product and its inputs,
over world market value added.
– Generally, EPR estimates are used to provide information on the amount of government-
provided protection that an industry receives.
– TRP- I restructured the system of protection to industries into one less biased towards any
particular industry or industry group.
– Specifically, the objective was to keep industry EPR’s within the range of 10% - 80% from the
then prevailing schedule of EPR’s which range from excessively high to excessively low levels.
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– TRP-I resulted in the over-all reduction and evening out of EPR’s across industries.
– On the average, the EPR for primary and agricultural industries continued to receive as low of
3%.
– The EPR for manufacturing industries decline from 66% (pre-TRP) to 36%.
TRP II: RATIONALE:
• To reduce the over-all level of protection and dispense tariff protection within and across industries.
• Government was also following through on its policy of de-emphasizing the role of tariffs in industrial and
trade promotion.
• The reforms were aimed at:
– achieving the following more efficient resource allocations
– improved access industry to essential inputs at lower prices
– availability of more affordable and better-quality goods for consumers
– enhanced competitiveness of local industries in the domestic and export markets
COVERAGE (TRP-II)
• the new package of tariff adjustments under TRP II was promulgated under EXECUTIVE ORDER 470 signed
into law by the President on July 20, 1991.
• E.O 470, incorporated a five (5) year phase-in period from 1991 to 1995 and transition rates to provide
local industries reasonable time to make the necessary adjustments.
• The E.O. covered some 80% of the Tariff and Customs Code.
• The number of HS lines was reduced by 10%, from 6,193 tariff lines to 5,561 tariff lines.
• This reduction, which made for easier customs administration, was due to the simplification of tariff
nomenclature (e.g. tariff lines which have the same rates of duty were combined into a single line) but
such nomenclature modification adhered faithfully to the basic text of the international Harmonized
System.
Impact of TRP-II on Protection Rates
• On Nominal Protection Rates (EPR’S)

– The final rates under E.O. 470 clustered around four (4) levels: 30%, 10%, 20% and 30%.
– Fully 95% of total tariff lines were dutiable at these rates in July 1995.
– However, E.O. 470 imposed duties of zero, 5%, 15%, 25% and 50% on limited number of items.
– Under E.O. 470, the average Nominal tariff was reduced from the pre-E.O. level of 28% to only
20% at the end of the period.
– Among the three (3) major industrial sectors, manufacturing registered the biggest reduction in
tariffs, from 27% before E.O. 470 to only 19% by 1995. For Agriculture, the average tariff
declined by 20%, from the pre-E.O. 470 level of 35% to 28% in 1995.
The more moderate reduction in agriculture tariff was a consequence of the decision to protect sensitive
agricultural products by retaining their tariffs at 50%.
– E.O 470 was eventually overtaken by the third TRP.

• On Effective Protection rates:
– Under E.O. 470, a substantial decline in the over-all average EPR level was
noted, from 25% under the pre-E.O. 470 structure to 19% five (5) years after
when the final duties were implemented.
– Along the decline in EPR levels, the structure of protection also changed.
– The tariff restructuring reduced the biased against agriculture relative to
manufacturing.
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– Specifically, effective rates of protection for selected manufacturing industries
which thrived under a highly protected regime were reduced to more
reasonable levels.
OBJECTIVES OF TRP-III
• TRP-III further liberalized the trade environment by reducing the level and spread of tariff rates towards a
uniform level of protection across all sectors.
• It was aimed at:
– Promoting global competitiveness
– Simplifying the tariff structure for ease of customs administration
– Providing a level playing field for local manufacturer’s vis-à-vis foreign competition.
• As stated in E.O. 264, the final rate structure under TRP-III will consist of only two (2) tariff rate of 5% by
the year 2004, to be reached after a penultimate stage of only Two (2) rates: 3% (raw materials and
intermediate goods) and 10% (for finished products ) in 2003.
IMPLEMENTATION OF TRP-III:
 The issuance of E.O. 189 on July 18, 1994 marked the onset of TRP III
 Among the major E.O’s. issued during this phase of the program were:
 E.O. 264 EFFECTIVE August 28, 1995) which contained the tariff modifications on industrial
products
 E.O. 288 (effective January 15, 1996) which set in place the tariff reductions on non-sensitive
agricultural products (those not covered by quantitative restrictions –QR’s)
E.O. 313 (effective May 7, 1996) which provide interim tariff protection to sensitive agricultural products
IMPACT OF TRP-III ON PROTECTION STRUCTURE
• On Nominal Tariffs:
– TRP-III followed the basic 3%-10%-20%-30% tariff structure first set in place under the second
tariff reform program.
– Thus more than 95% of total tariff lines were dutiable at any of these four (4) tariff levels from
1995 to 1997.
– With respect to tariff averages, the average nominal tariff declined from 19.72% in 1994 to
13.43% in 1997.
– The average tariffs for agriculture sector were consistently above the over-all tariff average
reflecting the higher tariff protection accorded to sensitive agricultural products.
• On Effective Protection Rates (EPR)
– Following the tariff restructuring, effective protection levels not only fell but the bias against the
agricultural/fishery/forestry sectors relative to the manufacturing sector was also reduced.
TRP-IV UNDERTAKINGS:
• TRP-IV was initiated by a review and evaluation of the impact of the pace of tariff reductions on the
competitiveness of local industries.
• The review also sought to smoothen the pace of the schedule of tariff reduction for deserving industries
and correct any remaining distortions in the tariff structure.
• The Commission adopted a tariff recalibration scheme to serve as a framework.
This scheme provided for a more flexible 3%, 5%, 7%, 10%, 15%, 20%, 25%, 30% structure in place of the 3%, 10%,
20% and 30% structure.
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Twenty two (22) industries identified as “Philippine Winners” were initially targeted for re-calibration of tariff
rates. The products covered by these industries, selected on the basis of their global competitiveness (actual or
latent), employment and inter-industry linkages were:
1.Copper products
2.Fertilizers
3.Motor vehicles parts and components
4.Iron and steel products
5.Jewelry
6.Electronics
7.Ceramics
8.Marble products
9.Marine products
10.
Processed foods
11.
Petrochemical and oleochemical products
12.
Leather goods
13.
Footwear
14.
Lumber
15.
Particle board and Fiberboard
16.
Veneer and plywood
17.
Textiles and garments
18.
Basketwork
19.
Seaweeds and carageenan
20.
Holiday décor
21.Furniture
22.
Fresh fruits
– The modified tariff schedules for the above items were implemented by E.O. 465 which took effect on
January 22, 1998.
– Following the issuance of E.O. 465, it was considered necessary to evaluate the tariff schedules of residual
items to achieve a total and comprehensive phased tariff reduction program.
– E.O. 486 (effective July 10, 1998) indicated the re-calibrated tariff schedules for the residual items. It also
reduced to 144 the number of tariff lines subject to tariff quotas.
– Government’s intent to reform the tariff structure was embodied in E. O. 334 that provided the tariff
schedules from 2001 to 2004 for all products (excluding certain meat products falling under HS Chapter 2,
rice, corn and sugar). On January 1, 2001, this E. O. provided for the implementation of the tariff band of
0%-5% by 2004 (except for limited range of sensitive agricultural products with a 2004 tariff rate of 30%)
CURRENT GOVERNMENT STRATEGY ON TARIFFS
• In October, 2002 the President ordered a review of the tariff liberalization policies and programs with the
end of view of encouraging manufacturing.
• In January, 2003 the President announced that the government was adopting the policy of slowing down
the pace of the tariff reform program to the ASEAN Free Trade Area (AFTA) and World Trade Organization
(WTO) minimums, and that it was taking full advantage of all exception windows allowed. In addition,
plans to support critical industries such as steel, textile and shipping industries were formulated.
MEASURES THAT THE GOVERNMENT TAKEN THROUGH THE MFN TARIFF STRUCTURE TO LEVEL THE PLAYING
FIELD FOR DOMESTIC INDUSTRIES VIS-A VIS UNBRIDLED GLOBALIZATION
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 Even prior to the recent policy statements on the tariff reform program, the President was fully aware of
the need to further support the crucial agriculture and manufacturing sectors.
 Thus, in March and April 2002, the President issued EO’s 83 and 91 which reduced to 1% the MFN tariff
rates on various imported raw materials, intermediate inputs, machinery and parts upon the request of
the concerned domestic industries.
 This tariff modification was intended to assist domestic industries to be globally competitive vis-à-vis
foreign counterparts and remain viable in the face of economic difficulties.
 The President also signed E.O. 84 in March 2002 which provided the tariff schedule from 2002 to 2004 on
sensitive agricultural products.
 Among the products covered were meat of swine, sheep or goats, fresh, chilled or frozen; meat and edible
meat offal of ducks, geese, turkeys and guinea fowls, fresh, chilled or frozen, cane or beet of sugar, in
solid form, and maize (corn, with tariff rates ranging from 35% to 50% in 2003.
 The tariff structure prescribed by E. O was intended to help the agriculture sector be more efficient and
globally competitive
 On January 10, 2003 the President signed E.O. 164 which maintained the 2002 levels of the tariff rates on
products whose duties were scheduled for reduction in 2003.
 To provide further tariff support to the agriculture and fishery sectors, the President also issued E.O.’s
196 and 197 on April 16, 2003.
 E.O. 196 reduced to 1% the MFN tariff rates on critical inputs to the agriculture and fishery sectors while;
 E. O. 197 raised the tariff s on certain vegetables from 7% to 20%/25%.
 On October 2, 2003, the President issued E.O. 241, the result of a comprehensive tariff review that
prescribed the 2003-2005 MFN tariff schedules for locally-produced industrial finished products.
 On December 30, 2003, E.O. 264 was issued providing the 2004-2005 tariffs for residual products not
covered by E.O. 241.
 A number of E.O’s. followed with the intent to provide an enabling environment for local industries to
attain global competitiveness.
 In 2004 the ASEAN Harmonized Tariff Nomenclature (AHTN) was implemented as a more product-specific
nomenclature was required to facilitate trade among ASEAN members.
 Tariff Lines increased and almost doubled from 2003
 Further, Tariff adjustments took place in 2005.
 E.O. 450 promoted the competitiveness of the paper and aerosol industries.
 E.O. 440 alleviated the impact on VAT on the increasing prices of petroleum products.
 To encourage energy conservation and independence in the transport sector, E.O. Nos. 419 and 449 were
issued
 E.O. Nos. 418, 443 and 477 were likewise issued to support the Clean Air Act and to promote road safety.
 The most recent tariff review was conducted to set the tariff structure from 2006 to 2010.
The results of this review took effect in 2007 with the issuance of E.O. 574.
 From the first TRP to the present tariff structure, staggered cuts were implemented reducing the average
tariff by 80% from 41.37% in 1980 to the current average of 7.82%. (2009)
 Deeper cuts were applied during the first and third TRP but in 2002, government adopted the policy to
decelerate the speed of tariff reduction program to support critical industries.
APPEALS PROCEDURES AVAILABLE TO PARTIES IN REQUESTING TARIFF MODIFICATIONS:
• Petitions for tariff modifications may be filed by interested parties under Section 401 of the TCCP vol. 1, as
amended.
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• The Tariff Commission conducts investigations on the petitions it receives during which public hearings
are held to afford interested parties reasonable opportunities to present their views.
• The Commission submits its findings and recommendations to NEDA which then schedules these for
deliberation by the TRM Technical and Cabinet Committees.
• Final approval is granted by the NEDA Board after which the Commission prepares the implementing
Executive order for signature of the President.
THE PRESENT AVERAGE MFN TARIFFS:
 PURSUANT TO E.O. 574, the overall average nominal tariff is 7.82% in 2007.
 Tariffs on agriculture, fishery and forestry sectors remain the highest averaging about 12%, compared to
less than 3% for mining and 7% for manufacturing.
 Average tariffs for agriculture, fishery and forestry are higher due mainly to the greater tariff protection
accorded to sensitive agricultural products.
 In terms of effective protection, the agriculture, fishery and forestry sectors and the manufacturing sector
generally enjoy the same level of protection.
 Overall and sector wise, effective protection have remained stable since 2005.
 Of the total 11,490 AHTN lines in 2007, approximately 56% have their tariff rates of 0% to 5%.
 Tariff lines dutiable at 7% to 15% comprise 34%
 The remaining 10% are high-tariff lines with the duties above 20%
A. Agriculture and Fisheries Modernization Act of 1997. (AFMA)

Republic Act No. 8435,
- also known as the “Agriculture and Fisheries Modernization Act of 1997.

- Was signed on December 22, 1997
Objectives of AFMA:
a. To modernize the Agriculture and Fisheries sectors by transforming these

sectors from a resource-based to a technology-based industry;
b. To enhance profits and incomes in the agriculture and fishery particularly the
small farmers and fisherfolk by ensuring equitable access to assets, resources
and services, and promoting higher-value crops, value-added processing,
agribusiness activities, and agro-industrialization;
c. To ensure the accessibility, availability and stability of food supply at all times;
d. To encourage horizontal and vertical integration, consolidation and expansion of
agricultural and fishery activities, groups, functions and other services through
the organization of cooperatives, farmers’ and fisherfolks’ associations,
corporations, nucleus estates, and consolidated farms and to enable these
entities to benefit from economies of scale, afford them a stronger negotiation
position, and enable them to pursue more focused, efficient and appropriate
research and development efforts;
e. To provide people empowerment by strengthening people’s organizations,
cooperatives and non-government organizations, and by establishing and
improving mechanisms and processes for their participation in government
decision-making and implementation;
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f. To pursue a market-driven approach to enhance the comparative advantage of
our agriculture and fishery sectors in the world market.
g. To induce the agriculture and fishery sectors to continuously ascend the value-
added ladder by subjecting their traditional or new products to further processing
in order to minimize the marketing of raw, unfinished or unprocessed products;
h. To adopt policies that will provide industry dispersal and rural industrialization by
providing incentives to local and foreign investors for them to establish industries
that have backward linkages to the country’s agricultural and fishery resource
bases;
i. To provide social and economic adjustment measures that increase productivity
and improve market efficiency while ensuring the protection and fishery resource
bases;
j. To improve the quality of life of all sectors.
TRADE AND FISCAL INCENTIVES PROVIDED UNDER AGRICULTURE AND FISHERIES

ACT:
Under Section 109 of R.A 8435, all enterprises engaged in agriculture and fishery duly certified
by Department of Agriculture in consultation with the “Department of Finance and the Board of
Investments are exempted from the payment of tariff duties on all types of Imported:
a. agricultural and fishery inputs,

b. equipment and machinery including, among others,
c. fertilizers,
d. insecticides,
e. tractors,
f. hybrid seed,
g. farm implements and machinery,
h. packaging machinery and materials, and
i. fishing equipment and parts thereof, Provided that the imported agriculture
and fishery input, and/or equipment are for the exclusive use of the importing
enterprise.
ELIGIBLE FOR EXEMPTION OF IMPORT DUTIES OF AGRICULTURE AND FISHERY

INPUTS, EQUIPMENT, MACHINERY AS PROVIDED UNDER SECTION 109 OF R.A. 8435:
a. Agricultural Sectors
b. Cooperatives
c. Farmers and fisherfolks
d. Farmers and fisherfolks organization and associations
e. Fishery enterprises
f. Fishery Sectors, and
g. Import consolidators
A. Jewelry Industry Development Act of 1998 (JIDA)

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Republic Act No. 8502, otherwise known as Jewellery Industry Development Act of
1998, is an act to promote the development of and proving the incentives to the jewellery
manufacturing Industry.
• It was signed into law by then President Fidel V. Ramos on February 13, 1998 and took
effect on July 9, 1998.
• However, the implementing rules and regulations, as promulgated by the Department of

Finance and the Bureau of Customs, took effect only on January 25, 1999.
The State intend to encourage the development of the Jewellery industry by:
1. promoting and encouraging local jewellers to join the formal sector by making the
industry sector a partner in the establishment of an adequate support structure, and by
creating a business environment conducive to the viability, legalization and development
of the jewellery sector.
2. by adopting appropriate tax incentives and programs necessary for the acceleration
and growth of the industry.
3. by promoting and institutionalizing the effective promotion and participations of

associations of the jewellery industry and cooperatives particularly in the advancements
of the skills and craftsmanship of the Filipino workers therein.
Incentives granted under R. A. 8502
1. Materials which include: Precious Metals; Loose gems; precious stones;

jewellery parts; accessories and supplies for use by a jewellery enterprise as
specifically mentioned in Chapter 5 Section 1; chapter 12 section 2; chapters 25,
26 and 27 Section 5; chapters 28,34, and 38 section 6; chapter 70 section 13;
chapter 71 section 14; chapter 83 section 15 and chapter 96 of section 20 of
TCCP.
2. Exemptions from the imposition of excise tax on all goods commonly or commercially
known as jewelry whether real or imitations thereof, all goods thereof or ornamented,
mounted or fitted with precious metals or imitations thereof, as specifically mentioned in
section 150 a of the NIRC of the Philippines as amended.
3. Entitlement to zero duty on imported capital equipment including spare parts and
toolings thereof falling with chapter 69 of section 13 And chapter 90 of section 18 of the
TCCP
4. Additional deductions from taxable income of 50% of expenses incurred in training

schemes approved by the appropriate agency which shall be deductible during the
financial year the expenses were incurred
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5. Gold and silver sales by the Bangko Sentral ng Pilipinas to jewelry industries under
minimal margins.
6. Authority for jewelry enterprises to buy gold and silver directly from other sources
7. Inclusion of locally-manufactured jewelry in the government’s tourist duty-free shops

including the promotion, advertisement and sale thereof
8. Jewelry enterprises availing of incentives provided under the act shall still be eligible to
incentives provided by other special laws such as Republic Act No. 7844 (Export
Development Act of 1994) Executive Order 226 (BOI Omnibus Investments Code)
Republic Act No. 7916 (Special Economic Zone Act of 1995) provided that the activity is
export-oriented and that there is no double availment of the same incentives.
Qualifications of the Jewelry Enterprise to avail of the incentives
1. Jewelry enterprises must be registered with the appropriate government

agency which is the Board of Investment (BOI)
Jewelry Enterprise- as used in this act shall refer to any enterprise engaged in any aspect in
the manufacture of goods commonly or commercially known as fine and imitation jewelry
including those producing, cutting and polishing, shaping and refining, forming or fabricating real
or imitation pearls, precious and semi-precious stones and imitations thereof, and other raw
materials and parts used in the manufacture of jewelry.
Role of Tariff Commission in the Promulgation of this Act.

 Tariff Commission, in coordination with the representatives of the jewelry industry and
the BOI, provided the technical expertise in the Tariff Classification and preparation of
the list of the products and equipment entitled to zero (0) duty under the Act.
It continues to assist in the tariff classification of products and equipment eligible for duty-free
treatment.
The World Customs Organization (WCO) is an independent intergovernmental organization

dedicated exclusively to international customs and border control matter.
It works in areas covering the development of international conventions, instruments, and tools
on topics such as commodity classification, valuation, rules of origin, collection of customs
revenues, supply chain security, international trade facilitation, customs enforcement activities,
combating counterfeiting in support of intellectual property rights, integrity promotion, and
delivering sustainable capacity building to assist with customs reforms and modernization.
Established in 1950 as the Customs Cooperation Council, WCO maintains the international
Harmonized System (HS) goods nomenclature, and administers the technical aspects of the
WTO Agreements on Customs Valuation and Rules of Origin.
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It adopted the informal working name “World Customs Organization” in order to indicate more
clearly its nature and world-wide status.
However, the Convention establishing the Customs Cooperation Council has not been
amended, thus Customs Cooperation Council remains its official name.
WTO has worldwide membership of 179 countries and is headquartered in Brussels, Belgium.
WHAT ARE THE VISION AND OBJECTIVES OF WCO?
WCO is internationally acknowledged as the global

centers of customs expertise and plays a leading role in the discussion, development, promotion
and implementation of modern customs systems and procedures.
Its primary objective is to enhance the efficiency and effectiveness of member customs
administrations, thereby assisting them to contribute successfully to national development
goals, particularly revenue collection, national security, trade facilitation, community protection
and collection of trade statistics.
What are the main functions of the WCO?
a. To examine the technical aspects of customs systems, as well as the economic

factors related thereto, in order to propose practical means of attaining the
highest possible degree of harmony and uniformity;
b. To prepare draft conventions on customs matters;
c. To recommend measures that would ensure the uniform interpretation and

application of conventions;
d. To make recommendations for the settlement of disputes concerning the

interpretation or application of the conventions (WCO is not a court and cannot
side with one party or the other);
e. To furnish interested governments, on its own initiative or upon request,

information or advice on customs matters; and
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f. To cooperate with other intergovernmental organizations on matters within its
competence.
HOW DOES THE WCO FULFILL ITS MANDATE?
a. Establishes, maintains, supports and promotes international instruments for the

harmonization and uniform application of simplified and effective customs
systems and procedures governing the movement of commodities, people and
conveyances across customs frontiers, thus contributing to the development of
trade and the economic and social well-being of nations;
b. Reinforces its member’s efforts to secure, through control and enforcement,

compliance with their legislation, in particular by endeavouring to maximize the
level and effectiveness of the Members’ co-operation with each other and with
international agencies in order to combat customs offenses;
c. Assists its Members in their efforts to meet the challenges of the modern
environment and adapt to changing circumstances, thus promoting
communication and co-operation among Members and with other international
organizations;
d. And, Helps foster human resource development and improve management and
working methods of customs administration.
How does the WCO operate?

The WCO is the only international organizations dealing exclusively with customs matters. It
provides for a forum where delegates representing a large variety of members could tackle
customs issues on equal footing. Each member has one representative and is entitled to one
vote.
WHAT ARE THE DIFFERENT WORKING BODIES IN THE WCO?

a. Council – highest body composed of the Directors-General of Customs from all members
and is assisted by the Finance Committee (17 members) and by the policy Commission (24
members). The council meets once a year with the aim of securing the highest degree of
harmony and uniformity in the customs systems of Member Governments, and especially to
study the problems inherent in the development and improvement of customs techniques and
customs legislation in connection therewith.
b. Finance Committee – acts under the overall direction of the WCO Council with
administrative support provided by the WCO Secretariat.
Tariff and Trade Affairs:
c. Harmonized System Committee – administers the International Convention the HS to

ensure that the HS keeps abreast of technical progress and international trade developments;
14
resolves specific classification problems; and acts as an arbitrator in customs disputes between
countries and makes decisions regarding the tariff code applicable to goods.
a. HS Review Sub-Committee – acts under the overall direction of the HS

Committee on the review and amendments of the HS having regard to the needs
of the users and to changes in technology or in patterns of international trade,
and on the preparation of consequential amendments to the Explanatory Notes
and Compendium of Classification Opinions.
b. Scientific Sub-Committee – assists the HS Committee and the Review Sub –

Committee in their technical work, particularly on the draft HS legal texts and
Explanatory Notes involving scientific issues, and with regard to questions
involving the classification of chemical products and those involving scientific
issues.
c. Harmonized System Working Party – under the overall direction of the HS

Committee, drafts the texts of possible amendments to the HS Nomenclature,
Explanatory Notes and Compendium of Classifications Opinions before their final
adoption by the HS Committee.

a. Technical Committee on Rules of Origin – together with the WTO Committee in Rules of
Origin, is charged with the implementation of the work program on the harmonization of rules of
origin; examines specific technical problems arising in the day-to-day administration of the rules
of origin of Members and give advisory opinions on appropriate solutions based upon the facts
presented; and furnishes information and advice on any matter concerning the origin
determination of goods as may be requested by any Member.
b. Technical Committee on Customs Valuation – is responsible for matters pertaining to

customs valuation; and prepares opinions, commentaries, explanatory notes, case studies and
surveys.
c. Procedures and Facilitation – consists of Permanent Technical Committee, Information

Management Sub-Committee, Revised Kyoto Convention Management Committee, Istanbul
Convention Administrative Committee, Contracting Parties to the ATA Convention ,
d. Air Cargo Security Technical Experts Group-Contract Committee for the WCO/IATA/ICAO
Guidelines on Advanced Passenger Information, UPU/WCO Contract Committee,
Administrative Committee for the Customs Convention on Containers, 1972, and Ad Hoc Group
on Globally Networked Customs.
15
Enforcement and Compliance – consists of Enforcement Committee,
Working Group on Commercial Fraud, Global Information and Intelligence Strategy Project
Group, WCO Counterfeiting and Piracy Group, and Electronic Crime Expert Group.
Capacity Building – consists of Capacity Building Committee and Integrity Sub-Committee.
The Harmonized System and Tariff Commodity Classification Rulings
 Is a multipurpose product nomenclature designed to serve as an integrated

internationally standardized and accepted coding system of classifying traded products
in order to facilitate international trade;
 Developed and is being maintained by the World Customs Organization (WCO)and is
patterned after the Customs cooperation Council Nomenclature (CCCN) and the
standard International Classification (SITC) Revision 2.
 Being used by more than 200 countries for Customs Tariff purposes and for
Collection of international Trade Statistics such as:
1. Tariff Nomenclature
2. Statistics Nomenclature
3. Base for the Harmonization of Economic classification (market surveys and data
collection)
4. Multipurpose Nomenclature by International Unions of shipping and transport
Organizations
5. International language and code for Customs Purposes
6. Base for the determination of the Rules of Origin (ROO) for non-preferential trade
purpose such as the Most-Favoured Nation (MFN) treatment, Anti-dumping and
Countervailing duties, and Safeguard Measures and Origin Marking, and
7. Basis for Trade Negotiations
STRUCTURE OF THE HARMONIZED CODING SYSTEM:

 All traded products can be classified into the HS utilizing the General Rules of
Interpretation (GRI’s)
a. Product listing is arranged according to degree of processing categories (raw
materials, Intermediate products, finished products) with increasing complexities.
b. Organized into 21 sections and subdivided into 97 Chapters (with Chapter 77
reserved for future international use).
c. The product listing is number coded
i. The first four (4) digits having the broadest coverage are referred to as
the Headings which is further subdivided into six (6) digit level called the
subheading.
1. The first two (2) digit in the Code indicate the Chapter Number,
while the nest two (2) digits indicate the position of the heading in
the chapter
16
2. The last two (2) digits indicate the subheading number within the
heading.
d. It is mandatory for the WCO member countries to adopt the HS up to the
six (6) digits subheadings;
i. Any modification should be done beyond the six digits level
ii. In particular, to ensure harmonization, the contracting parties must
employ all four (4) and six (6) digit levels, the General Rules of
Interpretation, and legal Notes without deviation, but where needed are
free to assign two (2) more digits for a total of eight (8) at the tariff rate
line (legal ) level.
iii. The two (2) final level (non-legal) digits are assigned as statistical
reporting numbers if warranted, for a total of ten (10) digits to be listed on
the entries.
What are the Legal Texts that Comprises the Harmonized Commodity and Coding
System?
1. General Rules for the Interpretation of the System-
a. Provides six (6) rules that establish classification principles throughout the
Harmonized system to ensure uniform classification of goods in one and the
same Heading (and subheading), to the inclusion of any others which appear
to merit consideration.
b. They should be applied in Hierarchical order.
2. Sections and Chapter Notes, including subheading Notes :
a. Form an integral part of the HS and have the same legal force as The General
Rules of Interpretation
b. It gives definitions of the term used in the nomenclature, criteria for classification
within each chapter, heading or subheadings, and, enumeration of products that
are classifiable or excluded within the chapters, headings or subheadings.
3. List of headings arranged in Systematic Order (degree of processing) and where
appropriate subdivided into subheadings.
HS Convention is an intergovernmental commitment of the contracting parties to abide by its

provisions, one of which is to agree to use the HS up to the six (6) digit level as the basis for
their national Customs tariff and Statistics Nomenclature
The Philippine Instrument of Accession to the HS Convention was signed on September 23,
1998 and was concurred in by the Philippine Senate on February 5, 2001.
The Instrument of Accession was formally deposited to the WCO on June 25, 2001.
HS Committee and its Functions:

The HS Committee is composed of Representatives from each of the contracting parties which
is convened by the Secretary General twice a year to update the HS regularly to:
17
1. Prepare amendments to the convention having regard, in particular, to the needs of
users and to changes in technology or in patterns of international trade
2. Prepare explanatory notes, classification opinions or other advice or guides to the
interpretation of the HS.
3. Prepare recommendations in order to ensure uniformity in the interpretation and
Applications of the HS.
4. Collate and circulate information concerning the applications of the HS
5. To furnish information or guidance on any matters concerning the classification of goods
in the HS to contracting parties, members of the council and to such intergovernmental
or other international organizations as to the committee may consider.
6. Present reports to every session of the council concerning committee activities, including
proposed amendments to the Explanatory Notes, Classification opinions and other
advices, and
7. Exercise such other powers and functions in relation to the HS as the Council of the
contracting parties may deem necessary.
Why did we adopt the HS?
The Philippines, before the approval of the Instrument of Accession, opted to adopt the HS on a
de facto basis to keep abreast of the latest internationally-accepted nomenclature in goods
classification which is the basis for the conduct of our trade with the rest of the world.
The Philippines formally adopted the HS on July 1, 1988 and implemented the same on October
1988. This is in accordance with the NEDA Board Resolution November 25, 1987 and
Executive Order no 688 dated May 1, 1987 mandating the Tariff commission to align the TCCP
with all future amendments to the CCCN (now HS)
The HS is reflected in Sections 103 and 104 of the TCCP (Vol. 1) as amended, which
provide for the General Rules of Interpretation of the HS and the list of headings and
corresponding rates of import duty, respectively. The HS effects uniformity in the classification
of goods and standardizes commercial documents which is ultimately promotes trade
facilitation.
The 8 Digit Codes in our Tariff Lines.

Every country using the HS is allowed to assign its own coding system beyond the six (6) digit
level to accommodate specific nomenclature for the purpose of reflecting their national
requirements. (differences in tariff rates, incentives)
The ASEAN Member States (AMS), including the Philippines, adopted in 2004 the 8-digit
AHTN.
18
Although no changes can be made to the HS itself, nothing prevents a Contracting Party from
establishing additional subdivisions in its nomenclature to identify certain goods which could not
be given separate status in the HS Nomenclature. It must, however, ensure that the mandatory
subdivisions, (up to the six-digit level subdivisions) remain unchanged.
How are the amendments implemented and how often?
The preamble to the International Convention on the HS emphasizes the importance of ensuring
that the HS is kept up to date in the light of changes in technology and patterns of international
trade.
Article 7 of the HS Convention further states it is for the HS Committee to propose such
amendments to the HS Convention as may be considered desirable, having regard, in
particular, to the needs of the users.
At its first Session, the HS Committee decided to set up the HS Review Sub-committee, which
has the task of revising the HS in accordance with the Committee’s general indications and
preparing the necessary amendments to the HS nomenclature.
The Committee also agreed to allow an interval four (4) to six (6) years between each
recommendation amending the HS Nomenclature under Article 16 of the HS Convention
Amendments and their Adoption:

There are 221 sets of amendments in 2012 amendments:
1. Environmental and social issues –use of the HS as a standard for classifying goods of
importance to the food security information for action program of Food and Agriculture
Organization
2. Identification of Chemicals and pesticides controlled under the Rotterdam Convention
and ozone depleting substances controlled under the Montreal Protocol
3. Identification of Newly important products in international standards.
4. Simplification including the deletion of more than 40 subheadings a low volume of trade
5. Editorial amendments/clarifications
Publications Complementing the HS:

1. Explanatory Notes- do not form an integral part of the HS but they constitute the official
interpretation of the HS at International Level. They must always be read in strict
conformity with the texts of the system itself, from which they cannot be dissociated, and
19
in particular the Interpretative Rules and the Section, Chapter and Subheading Notes.
Together with the HS Nomenclature, amendments are also made when necessary.
2. Alphabetical Index-an alphabetical list of the articles mentioned in the HS and the
Explanatory Notes. It facilitates the location of references in the HS Nomenclature of the
Explanatory Notes to Any of the products or articles mentioned therein.
3. Compendium of Classification Opinions- consist of the classification opinions
adopted by the WCO on the advice of the HS Committee on opinions and arranged in
the order of the headings of the HS Nomenclature.
Asia-Pacific Economic Cooperation

(APEC)
What is Asia-Pacific Economic Cooperation (APEC)?
Association created in 1989 for economies that share the boundaries of the Pacific
Ocean.
Member economies work together to reduce barriers to trade, ease the exchange of
goods, services, resources and technical know-how, and strengthen economic and
technical cooperation between and among members.
Envision full trade and investment liberalization and facilitation by 2010 for industrialized
economies and 2020 for developing members. With respect to tariffs, the goal is zero
tariffs in 2010 and 2020 for developed and developing countries, respectively.
2. What are the four (4) objectives of APEC?
a. Sustain the growth and development of the region for the common good of its people
thus contributing to the growth of the world economy;
b. Enhance the gains of both the regional and world economies by encouraging the flow
of goods, services, capital and technology;
c. Develop and strengthen the open multilateral trading system in the interest of Asia-
Pacific members economies and all other economies;
4. Reduce barriers to trade in goods and services, and minimize hindrance to

investment among its participants in a manner consistent with GATT/WTO principles,
where applicable, and without detriment to other economies
3. What are the programs to achieve APEC’s objectives?
1. Liberalization to dismantle those obstacles to international economic transactions
20
which are imposed as customs barriers;
2. Facilitation of trade and investment to reduce needless divergences in approaches to

domestic policies influencing international commerce;
3. Technical cooperation to share the information and expertise needed to implement

proposals for facilitation and to enhance the availability and efficiency of regional
infrastructure;
4. Economic policy coordination to reduce uncertainties that add to the costs of

international economic transactions.
4. Who are the members of APEC?
To date, APEC has 21 members, namely: Australia, Brunei Durassalam, Canada,

Indonesia, Japan, Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand,
United States, People’s Republic of China, Hong Kong, Chinese Taipei, Mexico, Papua
New Guinea, Chile, Peru, Vietnam and Russia.
5. What were the major results of the APEC
Leaders’ Annual Summits?
Summit (Year)/ Accomplishments/

Venue Commitments/ Ambitions
1993 APEC’s vision of stability, security
Blake Island, and prosperity for the people of
United States, Asia-Pacific
Nov. 20, 1993
1994 The Bogor Declaration of
Bogor, Common Resolve identified the
Indonesia, Nov. Bogor Goals of “free and open
11, 1994 trade and investment in the Asia
Pacific by 2010 for developed
economies and by 2020 for
developing economies”
1995 The Osaka Action Agenda served
Osaka, Japan, as a roadway towards achieving
Nov.16, 1995 the APEC’s Goals
1996, The Manila Action Plan for APEC
Manila, outlined the trade and investment
Philippines, liberalization and facilitation
Nov. 25, 1996 measures to reach the Bogor
Goals
21
1997 The Vancouver Framework
endorsed the proposal for Early
Vancouver, Voluntary Sectoral Liberalization
Canada, Nov. (EVSL) in 15 sectors
25, 1997
1998 Agreed on the first 9 sectors for
Kuala Lumpur, EVSL and sought an EVSL
Malaysia, Nov. agreement with non-APEC
18, 1998 members at the WTO
1999 Paperless trading by 2005 in
Auckland, New developed countries and 2010 in
Zealand, Sept. developing countries
9-10, 1999
2000 Established an electronic
Bandar Seri Individual Action Plan system to
Begawan, provide individual action plans
Brunei online and aims to triple internet
Darussalam, access throughout APEC region
Nov. 12-13, by 2005
2000
2001 Adopted the Shanghai Accord with
Shanghai, focused on Broadening the APEC
China, Oct. 20- Vision, Clarifying the Roadmap to
21, 2001 Bogor and Strengthening the
Implementation Mechanism
2002 Adopted a trade facilitation action
Los Cabos, plans, policies on trade and the
Mexico, Oct. digital economy and transparency
26-27, 2002
2003 Agreed to re-energize the WTO-
Bangkok, Doha Development Agenda
Thailand, Oct. negotiations and stressed the
20-21, 2003 complementary aims of bilateral
and regional trade agreement, the
Bogor Goals and the multilateral
trading system under the WTO
2004 Issued statement of support for
Santiago, Chile, progress in the WTO-Doha
Nov. 20-21, Development Agenda and set
2004 target date for achieving a
breakthrough in negotiations
2005 Adopted the Busan Roadmap,
Busan, Korea, completed the Midterm Stocktake
Nov. 118-19, which found that APEC is well on
2005 its way to meeting the Bogor
Goals, and the APEC Privacy
22
Framework
2006 Endorsed the Ha Noi Action Plan
Ha Noi, which identified specific actions
Vietnam, Nov. and milestones to implement the
18-19, 2006 Bogor Goals and support capacity-
building measures to help APEC
economies
2007 Adopted major report on closer
Sydney, regional economic integration and
Australia, Sept. welcomed the new APEC Trade
8-9, 2007 Facilitation Action Plan to further
reduce trade transactions costs by
5% in 2010
2008 Focused on the social dimensions
Lima, Peru, of trade and in reducing the gap
Nov. 22-23, between developing and
2008 developed members in
accordance with the 2008 theme
“A New Commitment to Asia-
Pacific Development”
2009 Commenced work on an APEC
Singapore, Nov. Services Action Plan and an
14, 2009 Environmental Goods and
Services Work Program
2010 Formulated the APEC Strategy for
Yokohama, Investment and endorsed the
Japan, Nov. 13- APEC New Strategy for
14 Structural Reform
2011 Agreed to facilitate trade in
Honolulu, remanufactured goods by making
Hawaii, United existing and future tariffs and non-
States, Nov. 12- tariff measures applied to goods
13 that are not newly manufactured
transparent
2012 Endorsed an APEC List of 54
Vladivostok, Environmental Goods with a
Russia, Sept. 8- commitment to reduce applied
9, 2012 rates to 5% or less by 2015 to
help stimulate the development
of clean technologies, boost green
businesses and foster sustainable
growth
2013 Bali, Under the APEC 2013 theme
Indonesia, Oct. of “Resilient Asia Pacific,
8, 2013
Engine of Global Growth,”
23
committed to deepen our
efforts towards attaining the
Bogor Goals, promoting
connectivity, and achieving
sustainable growth with
equity.
2014 Beijing, “Shaping the future through
China, Nov. 10- Asia-Pacific partnership.” We
12, 2014
recognize the important role
of tourism in promoting
economic cooperation, trade,
and people-to-people and
cultural exchanges among
APEC member economies,
2015 “Building Inclusive
Manila, Economies, Building a Better
Philippines,
World,” representing our
Nov. 16 and 17,
2015 vision for an Asia-Pacific
region that embraces an
economic growth agenda that
benefits everyone and future
generations – reiterating the
vision our APEC Leaders set
twenty years ago in Subic for
sustainable growth and
equitable development.
2016 Strengthening Regional
Lima, Peru, Economic Integration (REI)
Nov. 17 and 18,
and Quality Growth,
2016
Enhancing the Regional Food
Market, Towards the
Modernization of Micro, Small
and Medium Enterprises
(MSMEs) and Human Capital
Development.
2017 Creating New Dynamism
Danang, Fostering a Shared Future,
Vietnam, Nov.
determined to take bolder
11, 2017
and sustained collective
actions to inject new
24
dynamism into APEC
cooperation to promote
sustainable, innovative and
inclusive growth, deepen
regional economic
integration, realize the full
potential of the business
sector, particularly micro,
small and medium-sized
enterprises (MSMEs), and
enhance food security and
sustainable agriculture.
2018 “Harnessing Inclusive
Port Opportunities, Embracing the
Moresby, Digital Future”, we focused
Papua New this year on our vision for
Guinea, Nov. driving economic prosperity
15, 2018 through creating new
opportunities that are
inclusive and beneficial to the
region with deliberate
emphasis on digitalization.
Our growth story was
pursued through three
priorities: Improving
Connectivity, Deepening
Regional Economic
Integration; Promoting
Sustainable and Inclusive
Growth; and, Strengthening
Inclusive Growth through
Structural Reforms.
2019 “Connecting people, Building
Santiago, Chile, the Future”, APEC was
Dec. 7, 2019
determined to put people at
the center of APEC’s work.
For this reason, in 2019
Chile’s priorities were: Digital
Society; Integration 4.0;
Women, SMEs and Inclusive
25
Growth; and Sustainable
Growth.
2020 The Kuala Lumpur Declaration
Kuala Lumpur, Optimizing Human Potential
Malaysia, Nov. Towards a Resilient Future of
20, 2020 Shared Prosperity: Pivot.
(Virtual) Prioritize. Progress
2021
Wellington,
New Zealand
(digital)
6. What were the operational targets set by the APEC leaders in Osaka to achieve
the goal of free and open trade and investment in the Asia-Pacific region by
2020?
1. Trade in goods: Zero tariffs for all goods and the removal of all quantitative
restrictions.
2. Trade in services: Unlimited on rights of establishment, national treatment or travel

related to the provision of services for visit of up to two (2) years.
3. International investment:
(i) National treatment of all firms and unrestricted rights of establishment in all sectors of
production including national treatment of international investors in terms of fiscal policy
(taxation and/or subsidies); and
(ii) Accession of all APEC governments to existing international conventions for the
settlement of disputes relating to international investment.
4. Transport:
(i) Full harmonization of air traffic control procedures and safety standards;
(ii) Uninhibited (other than for safety reasons) landing rights for carriers with
majority of shares owned by an APEC national, or by nationals of economies
which impose no restrictions on landing rights to APEC-based carriers (i.e.,
“open skies” in the Asia Pacific); and
(iii) Accession of all APEC governments to international legal conventions for the
carriage of goods by air, sea and land.
5. Tourism:
(i) Introduction of smart card passports and electronic processing of international
passengers; and
(ii) Visa-free travel by residents of APEC economies within the region for visits of
up to six (6) months.
26
6. Telecommunications:
(i) Mutual recognition of all technical telecommunications standards;
(ii) Unhampered trans-border transmissions; and
(iii) National treatment for connections to local telecommunications networks.
7. Dispute settlement: Adoption of an APEC Code of Practice for the settlement of

disputes relating to trade policy or international investments based on mediation and the
reinforcement of existing multilateral mechanisms.
8. Competition policy: Rejection of anti-dumping measures by APEC governments

against imports from any other APEC participant following the adoption of an agreed
code of minimum standards for competition policy.
9. Administrative procedures:
(i) Full compatibility and Electronic Data Interchange of customs documentation and
clearance procedures; and
(ii) Full documentation and on-line access to texts of all significant commercial
legislations, regulations, tariffs or quantitative restrictions influencing international
economic transactions of all participants, including patents, standards and testing
procedures.
7. What are the proposed Philippine Action Plans for the Trade and Investment
Liberalization and Facilitation areas in the implementation of the Osaka Action
Agenda?
On tariffs:
a. Reduce tariffs progressively.

1. Gradual phase down/elimination of preferential tariffs under various trade
areas on substantially all goods by the agreed end dates
2. Conduct of a comprehensive tariff review at least every five (5) years
3. 144 tariff line classified as sensitive agricultural products excluded from tariff
reduction
b. Ensure transparency of tariff regime:

Active participation in the APEC Tariff Database to update its tariff data notifications
Association of Southeast Asian Nations
27
A. Overview
Association formed on August 8, 1967 in Thailand by the founding members: Indonesia,

Malaysia, Philippines, Singapore and Thailand. It was later joined by Brunei Darussalam
in 1984, Vietnam in 1995, Laos and Myanmar in 1997, and Cambodia in 1999;
The ASEAN objectives are:
a. to accelerate economic growth,
b. to have social progress and cultural development in the region, and
c. to promote regional peace and stability.
The Fundamental Principles of ASEAN?
In their relations with one another, the ASEAN member States have adopted the
following fundamental principles, as in the Treaty of Amity and Cooperation in
Southeast Asia of 1976:
a. Mutual respect for the independence, sovereignty, equality, territorial integrity,

and national identity of all nations;
b. The right of every state to lead its national existence free from external
interference, subversion or coercion;
c. Non-interference in the internal affairs of one another;

Settlement of differences or disputes by peaceful manner;
Renunciation of the threat or use of force;
d. Effective cooperation among themselves.
B. The ASEAN Free Trade Area
Trade agreement to remove obstacles to free trade among ASEAN Member States
through abolition of Tariffs on traded goods and the scrapping of quantitative restrictions
and other non-tariff barriers that limit the entry of imports;
28
The ASEAN Heads of Government agreed the establishment of the AFTA by the year
2008 at the 4th ASEAN Summit held in Singapore on January 28,1992.
Primary goals of AFTA:
a. Increase ASEAN’s competitive edge as a production base in the world market

through the elimination within ASEAN of Tariffs and non-tariffs barrier’s an;
b. Attract more foreign direct investments to ASEAN.
Common Effective Preferential Tariff (CEPT) Scheme
Main implementing mechanism of AFTA. This means that AMS shall:
a. have a common effective tariffs among themselves in AFTA but the level of tariffs
vi-a-vis non-ASEAN countries shall continue to be determining individually.
b. Cooperative arrangement among AMS to reduce intra-regional tariffs and remove

non-tariff barriers over a 15-year period commencing January 1, 1993.
In September 1994 at the ASEAN Economic Ministers Meeting, the target date of 2008 was
accelerated to 2003. The goal of the scheme is to reduce tariffs on all manufactured
goods to 0%-5% by the year 2003.
Executive Orders have been issued to implement the Philippine CEPT Scheme:
E. O’s Contents
EO. No. 388 Modified the nomenclature and
(Dec. 27, rates of import duty on zinc oxide,
1996) zinc peroxide and dioctyl
orthophthalates under the CEPT-
AFTA
EO. No. 453 modified the rates of duty on
(Oct. 31, 1997) certain imported articles to
implement the 1997 - 2003
Philippine Scheduled of tariff
reduction to products transferred
from the Temporary Exclusions list
(TEL) to the Inclusion List (IL)
under the new timeframe of the
29
Accelerated CEPT-AFTA.
(June 11, certain imported articles to
1998) implement the 1998 - 2003
EO. No.71 modified the rates of duty on
(Jan 15, 1999) certain imported articles to
(April 27, 2000) certain imported articles to
Accelerated CEPT-AFTA and
unification of the CEPT rates on
extracted lines.
(June 12 2000) certain imported articles to
reduction under the Bold Economic
Measure Initiatives of the
EO. No. 49 ) modified the rates of duty on
(Nov. 3 2001 certain imported articles to
reduction under the Bold Economic
Measure Initiatives of the
Accelerated CEPT-AFTA and the
transfer of products from the
unprocessed Agricultural products
30
– TEL and the General Exclusion
(GE) List to the CEPT IL.
EO. No. 163 modified the rates of import duty of
(Jan. 10, 2003 information and communications
technology products to implement
the ASEAN framework agreement.
(Jan. 10, 2003) certain imported articles to
implement the 2002 Philippine
Scheduled of tariff reduction under
the Bold Economic Measure
Initiatives of the Accelerated CEPT-
AFTA and the transfer of products
from the agricultural products SL to
the CEPT –IL.
EO. No. 166 Modified the rates of duty on
implement the ASEAN region
Integration System of Preferences
package of the Philippines.
EO. No. 230 Modified the rates of duty on sugar
(July. 26, to implement preferential rates
2003) under the CEPT-AFTA.
(Dec. 30, certain imported articles to
2003) implement the transfer of the last
tranche of product from the
agricultural product SL to the
CEPT-IL and the modification of the
CEPT rate on oil cake and other
solid residues of maize (corn)
germ, sodium tripolyphosphates
and cassava starch.
implement the commitment reduce
tha tariff rates on 60% of the
productions in the IL to 0% under
the CEPT-AFTA.
EO. No. 316 Temporarily granted a CEPT rate of
(May. 21, 0% on certain imported article to
2004) implement the agreement between
the Philippines and Singapore on
the compensatory adjustment
measures relating to the Philippine
suspension of concessions on
31
certain petro chemical products.
EO. No. 448 Modified the rates of import duty on
(July. 22, certain articles to implement the
2005) ASEAN Integration System of
Preferences.
EO. No. 484 Modified the rates of duty on sugar
(Dec. 29, to implement preferential rates
2005) under the CEPT-AFTA.
EO. No. 486 Lifted the suspension of the
(Jan. 12, 2006) application of the tariff reduction
schedule on petrochemicals and
certain plastic products under the
CEPT-AFTA.
(Jan. 12, 2006 certain imported articles to
implement the commitment to
reduce the tariff rates on 60% of
the products in the IL to 0% under
the CEPT-AFTA.
(April. 23, certain imported articles to
2007) implement the commitment to
reduce the CEPT rates on certain
products to 0% under the ASEAN
integration System of Preferences.
EO. No. 704 Amended Section 4 of EO 486
(Jan. 22, 2008) dated 12 January 2006 lifting the
suspension of the application of the
tariff reduction schedule on
petrochemicals and certain plastic
products under the CEPT-AFTA.
implement the commitment to
reduce the tariff rate 80% of the
product in the IL to 0% under the
CEPT-AFTA.
(Nov. 7, 2008) certain articles to implement the
ASEAN integration System of
Preferences.
(Dec. 23, certain imported articles to
2009) implement the commitment to
eliminate the tariff rates on the
remaining products in the IL in year
32
2010 under the
CEPT-AFTA/ATIGA.
(June. 17, sugar products to implement the
2010) tariff reduction schedule on sugar
products through the invocation of
the protocol to provide special
consideration for rice and sugar
under the CEPT-AFTA/ATIGA.
(June. 18, rice product to implement the tariff
2010) reduction schedule on rice products
through the invocation of protocol
to provide special consideration for
rice and sugar under the CEPT-
AFTA/ATIGA.
ASEAN Trade in Goods Agreement

The ASEAN Trade in Goods Agreement aims:
a. Improvement over the CEPT-AFTA Scheme-It consolidates the ASEAN'S

existing initiatives, obligations, and commitments made with regard to both trade
in goods, (tariffs) and non-tariff elements trade disciplines on Sanitary and
Phytosanitary measures, customs procedures, and trade facilitation, among
others into one (1) comprehensive agreement.
b. With ATIGA, certain ASEAN agreements relating to trade in goods, such as the
CEPT Agreement and selected Protocols, were superseded.
c. Signed in February 2009 and entered into force on May 17, 2010 upon the
notification of the ratification of all AMSs.
Objective of ATIGA:
To achieve free flow of goods in ASEAN as of the principal means to establish a single
market and production base for the deeper economic integration of the region towards
the realization of the ASEAN Economic Community by 2015.
The key elements of ATIGA:
a. ATIGA consolidates, streamlines all the provisions in the CEPT-AFTA (CEPT, TEL,
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SL/HSL Protocol), and formalizes several Ministerial decisions.
b. The ATIGA Annex provides the full tariff reduction schedule of each Member state
and spells out the tariff rates to be applied of each product for each year up to 2015. this
makes tariff reduction scheduled tariff and reductions schedules transparent and
predictable for the business community. A single legal enactment to effectively
implement the stipulated reduction scheduled up to 2015 is also expected.
c. The ATIGA compromises elements to ensure the realization of free flow of goods in
the ASEAN, including the following tariff liberalization, removal of non-tariff barriers, and
phyto-sanitary measures. The ATIGA contains comprehensive coverage of commitment
related to trade in goods, of mechanisms of its implementation as well as institutional
arrangements.
d. With the objectives of eliminating non-tariff barriers, the provisions on non-tariff

measures in the ATIGA have been enhanced further through codifications of measures,
as well as establishment of a mechanism to monitor the committed elimination of non-
tariff measures.
e. The ATIGA places emphasis on trade facilitation measures by including the ASEAN
Framework on Trade Facilitation. Subsequently, ASEAN has developed the trade
Facilitation Work for the period of 2009-2015.
The programs of tariff reduction of elimination of import duties:
a. Member States shall eliminate import duties on all products traded between the
Member States by 2010 for ASEAN-6 (refers to the first six members of ASEAN) and by
2015, with flexibility to 2018, for Cambodia, Laos, Myanmar and Vietnam (CLMV).
b. Each Member State shall reduce and/or eliminate import duties on originating goods
of the other Member States in accordance with the following modalities under Annex 2
(Tariff Schedules) of ATIGA:
1. Import duties on the products listed on schedule shall be eliminated by

2010 for ASEAN-6 and 2015 for CLMV. Import duties on some products of
CLMV, Not exceeding 7% of tariff lines, shall be eliminated by 2018.
The list of the products with the tariff reduction schedule shall be identified
by the said member states not later than January 01, 2014.
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2. Import duties on Information and communications Technology products
listed in Scheduled B of each CLMV Member State Shall eliminated in
three tranches by 2008, 2009 and 2010.
3. Import duties on Priority Integration Sectors’ products listed in Schedule C

of each CLMV Member State shall be eliminated by 2012.
4. Import duties on unprocessed agricultural products listed in schedule D of

each Member State on its own accord shall be reduced or eliminated
between 0% - 5% by 2010 for ASEAN-6 2013 for Vietnam 2015 for Lao
PDR and Myanmar and 2017 for Cambodia. Import duties on sugar
products for Vietnam shall be reduced between 0% - 5% by 2010.
5. Unprocessed agricultural products place in Schedule E of each Member

State on its own accord shall have their respective applied MFN import
duties reduced in accordance with schedule set out therein. AMS may
decide to conduct reviews on unprocessed agricultural products with a
view to improving the market access for these products.
6. The products listed in schedule F of Thailand and Vietnam, shall their out-
quota tariff rate reduce in accordance with the tariff reduction schedules
corresponding to their respective products classification.
7. vii. Import duties on petroleum products listed in Schedule G of Cambodia

and Vietnam, shall be reduced in accordance with the schedule as
mutually agreed by all Member States.
8. The products placed in Schedule H (General Exceptions) of each Member

State shall not be subject to import duties reduction or elimination.
ix. Reduction and elimination of import duties shall be implemented on 1
January of each year, and
9. The base rates from which import duties are to be reduced or eliminated
shall be the CEPT rates at the time of entry into force of this agreement.
c. No Member State shall nullify or impair any tariff concessions applied in

accordance with the tariff schedules
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d. No Member State may increase an existing duty specified in the schedules made
on imports of an originated good.
The status of the Tariff Reduction Program:

1. ASEAN 6 have eliminated import duties on 99.65% of traded tariff lines since 1
January 2010, goods under the Priority Integration Sectors account for 24.15% of tariff
lines, iron and steel account for 14.92%, machinery and mechanical appliances for
8.93%, and chemicals for 8.3%
2. CLMV have reduced 98.86% of their traded tariff lines to 0-5%.
Average intra-ASEAN tariffs for the original signatories of the CEPT-AFTA Agreement
(Brunei Darussalam, Indonesia, Malaysia, the Philippines, Singapore and Thailand)
have gone down from 12.76% in 1993 to 0.05% on 1 January 2010. Average intra-
ASEAN tariffs stood at 4.43% in 2000 (the year when all ten ASEAN Member States
were implementing the CEPT-AFTA) and this has gone down to 1.06% in 2010.
The exclusions/exceptions allowed under ATIGA:

a. General Exceptions- Member State may exclude a product which is considers
necessary to:
1. Protect public morals
2. Protect human animal or plant life or health;
3. Secure compliance with laws or regulations which are not inconsistent with the
provisions of the agreements including those relating to customs enforcement,
the enforcement of monopolies operated under paragraph 4 of Article II and
Article XVII of GATT 1994 the protection of patents, trademarks and copyrights,
and the prevention of deceptive practices;
4. Products of prison labor;
5. Protect of national treasures of artistic, historic or archaeological value;
6. Conserve exhaustible natural resources if such measures are made effective in

conducive and restrictions on domestic production or consumptions;
7. Pursue obligation under any intergovernmental commodity agreement in which

conforms to criteria submitted to the WTO and not disapproved by it or which is
itself so submitted and not disapproved;
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8. Involving restrictions on exports of domestic materials necessary to ensure
essential quantities of such materials to a domestic processing industry during
periods during the domestic price of such materials is held below the world price
as part of governmental stabilization plan, provided that such restrictions shall
not operate to increase the export of the protection afforded to such domestic
industry, and shall not depart from the provisions of this Agreement relating to
non-discrimination; and
9. Essential to the acquisition or distribution of products in general or local shorts

supply, provided that any such measures shall be consistent with the principle
that all Member States are entitled to an equitable share of the international
supply of such products, and that any such measures, which are inconsistent
with the other provisions of this Agreement shall be discontinued as soon as the
conditions giving rise to them have ceased to exist.
b. Security Exceptions:
1. To require any Member State to furnish any information, the disclosure of

which it considers contrary to its essential security interest;
2. To prevent any Member State from taking any action which it considers
necessary for the protection of its essential security interest; or
3. To prevent any Member State from taking any action in pursuance of its
obligation under the United Nations Charter for the maintenance of
international peace and security;
4. The Philippines excludes from ATIGA agreements to all products falling

under chapter 93 (Arms and Ammunition; Parts and Accessories Thereof)
The programs for elimination of tariff rate quotas and non-tariff barriers:
1. Each Member State undertakes not to introduce Tariff Rate Quotas on the
importation of any goods originating in other Member State or of the exportations
of any goods destined for the territory.
2. Vietnam and Thailand Shall eliminate the existing Tariff Rate Quotas as follows;
Thailand shall eliminate in three (3) tranches by January 1, 2008, 2009 and 2010;
and
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Vietnam shall eliminate in three (3) tranches by January 1, 2013, 2014 and 2015,
with flexibility up to 2018.
3. Each Member State undertakes not to adopt or maintain any prohibition or

quantitative restriction on the importation of any goods destined for the territory of
the other Member States, except in accordance with its WTO rights and
obligations or the provisions in this Agreement. To this end, Articles XI of GATT
1994, shall be incorporated into and form part of this Agreement, mutatis
mutandis.
The identified non-tariff barriers shall be eliminated in three (3) tranches as

follows:
1. Brunei, Indonesia, Malaysia, Singapore and Thailand shall eliminate in three (3)
tranches by January 1, 2008, 2009 and 2010;
2. The Philippines shall eliminate in three (3) tranches by January 1, 2010 2011 and
2012; and
3. Cambodia Lao PDR, Myanmar and Vietnam shall eliminate in three (3) tranches
by January 1, 2013, 2014 and 2015 with flexibilities up to 2018.
ASEAN Trade and Respiratory:
Contains trade-related information such as:
(i) tariff nomenclature;
(ii) MFN tariffs, preferential offered under this Agreement and other Agreements
of ASEAN with its Dialogue Partners;
(iii) Rules of Origin iv)
(iv) non-tariff measures
(v) national trade and customs laws and rules;
(vi) procedures and documentary requirements;
(vii) administrative rulings (best practices in trade facilitation applied by each

Member State; and
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(viii) list of authorized traders Of Member State and made accessible to the public
through the internet.
The ASEAN Secretariat maintains and updates the ASEAN Trade Respiratory
based on the notifications submitted by Member States.
The Rules Of Origin for ATIGA

Sets of the criteria used to determine the origin of a good or service and the eligibility of
a product to receive concessions.
Based on the Regional Value Content of not less than 40 % or if all non-originating
materials used in the production of the goods have undergone a Change in Tariff
Classification at four-digit level (i.e., a change in tariff heading) of the HS.
The criteria for a product to be eligible for concession under the ATIGA are:
a. Products on which tariffs of the exporting Member States have reached or are at the
rate of 20%
b. If the product conforms to the origin requirements specified in the ATIGA ROO; and
c. Preferential tariff treatment shall be supported by a Certificate of Origin Form “D” or from
“ATIGA” issued by a government authority designated by the exporting Member State.
ASEAN-AUSTRALIA-NEW ZEALAND FREE TRADE AREA (AANZFTA)
The AANZFTA is a comprehensive and single-undertaking free trade agreement that opens up
and creates new opportunities for approximately 663 million peoples of ASEAN, Australia and
New Zealand - a region with a combined Gross Domestic Product of approximately USD 4
trillion as of 2016.
In line with the ASEAN Community Vision 2025, the AANZFTA aims for sustainable economic
growth in the region by providing a more liberal, facilitative, and transparent market and
investment regimes among the twelve signatories to the Agreement, namely Australia, Brunei
Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, New Zealand, Philippines,
Singapore Thailand, and Viet Nam.
 On 27 February 2009, signed in Cha-am
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 On 1 January 2010, the AANZFTA entered into force for eight of the Parties, namely:
Australia, Brunei Darussalam, Malaysia, Myanmar, Philippines, New Zealand, Singapore
and Viet Nam
 On 12 March 2010, the AANZFTA entered into force for Thailand and subsequently in Lao
PDR and Cambodia on 1 January 2011 and 4 January 2011, respectively. Indonesia ratified
the Agreement on 6 May 2011.
The AANZFTA is a first in many respects, such as:

• the first plurilateral agreement for both ASEAN and Australia;
• the first comprehensive single-undertaking free trade agreement negotiated and signed
by ASEAN with a Dialogue Partner;
• the first region-to-region engagement for ASEAN; and
• the first Agreement that Australia and New Zealand jointly negotiated for.
Benefits of AANZFTA to ASEAN
 Increased market access
 rules of origin will be further enhanced
 advance ruling provision would help shorten the time for checking and assessing goods
at the ports of entry
 Improved market access and national treatment for trade in services
 protection measures for covered investments
facilitate the temporary movement of business person
What does AANZFTA covers?

 The Agreement has eighteen chapters and four annexes, covering
 trade in goods
 services
 investment
 competition
 intellectual property rights
 specific schedules of commitments on tariffs,
 specific services and
 movement of natural persons
Trade In Goods
 Eliminate tariffs for at least 90% of products traded in the region within a specified
timeline
 Australia and New Zealand committed to achieve 100% elimination of tariffs by 2020
Rules of Origin
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 provide flexibility that allows exporters to choose the applicable origin criteria when
exporting goods to other AANZFTA Parties
Customs Procedures
 predictable, consistent and transparent
 simplification of customs procedures
 implementing customs best practices and risk management techniques
 advance ruling provision
Sanitary & Phytosanitary (SPS) Measures

 reaffirms the principles of the World Trade Organization (WTO) Sanitary and
Phytosanitary (SPS) Agreement
 facilitate trade among the Parties while at the same time protecting human, animal or
plant health in the region
Standard Technical Regulations and Conformity Assessment Procedures

 standards, technical regulations and conformity assessment procedures are to be
applied in such a manner so as not to create unnecessary barriers
 promoting mutual understanding and strengthening information exchange
cooperation in the preparation, adoption, and application of standards, technical
regulations, and conformity assessment procedures.
Trade in Services
 services liberalization
 Australia opened up new opportunities for ASEAN service providers in the following
sectors: legal services, nursing and midwifery, services to mining, communication
services, educational services, environmental services, financial services, and transport
services.
 New Zealand created new opportunities in legal services, engineering services,
veterinary services, construction services, educational services, environmental services
and financial services.
Movement of Natural Persons

 sets out the obligations and commitments on the temporary movement of natural
persons including:
a. business visitors
b. installers and servicers
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c. executives of businesses, headquartered in a Party, establishing a branch or
subsidiary, or other commercial presence in another Party
d. intra-corporate transferees
e. contractual service suppliers
Electronic Commerce
 promoting electronic commerce
 domestic laws and regulations that will govern electronic transactions measures based
on international standards for electronic authentication
Investment
 Fair and equitable treatment, and full protection and security
 Non-discriminatory treatment in relation to compensation for losses arising from armed
conflict, civil strife or state of emergency
 Provisions that freely allow transfers relating to covered investments
 Non-discriminatory expropriation of investments that is done only for public purpose and
carried out with due process of law, and receives prompt, adequate and effective
compensation
Economic Cooperation
 maximises the benefits Parties receive from the Agreement by ensuring that Parties
utilise AANZFTA and are able to fulfil and comply with the obligations and commitments
Intellectual Property
 affirms and builds on the rights and obligations of the Parties under the World Trade
Organization Agreement on Trade-Related Aspects of Intellectual Property Rights
(TRIPS)
 nationals of Parties shall be accorded national treatment
 provides for cooperation on intellectual property
Competition
 Parties’ cooperation in the promotion of competition, economic efficiency, consumer
welfare, and the curtailment of anti-competitive practices
Dispute Settlement
 robust and transparent framework for dispute settlement
 to achieve mutually agreed solutions to any dispute
 Parties could also have recourse to the following:
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a. Consultations with any other Party with respect to any dispute arising under
the AANZFTA as provided under Article 6 (Consultations).
b. Good offices, conciliation and mediation that may begin and be terminated at
any time as provided under Article 7 (Goods Offices, Conciliation and
Mediation).
c. Arbitral Tribunals, which may be established in accordance with the
adjudication provisions in Section C of Chapter 17.
ASEAN-CHINA FREE TRADE AGREEMENT
Historical Background
a. late 1980s-China intensified its efforts to establish diplomatic relations with all
the remaining ASEAN member states leading eventually to official relationship
with the ASEAN grouping
b. November 1988 –Chinese Premier Li Peng his visit to Thailand, announced four
principles in establishing, restoring and developing relations with all the ASEAN
states
c. October 03, 1991-Diplomatic relations with Singapore official ties with the
ASEAN grouping
d. 1991 relationship between countries in Southeast Asia and China started to open
e. July 19, 1991-Chinese Foreign Minister Qian Qichen attended the opening
session of the 24th ASEAN Ministerial Meeting in Kuala Lumpur
f. September 1993, -ASEAN Secretary General Dato’ Ajit Singh visited Beijing
and agreed to establish two joint committees, one on cooperation in science
and technology, and the other on economic and trade cooperation.
g. July 23, 1994- formalized the establishment of the two committees in

Bangkok
h. By early 1997- there were already five parallel frameworks for dialogue
between China and ASEAN:
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1. the China-ASEAN political consultation at the senior level;
2. the China-ASEAN Joint Committee on Economic and Trade

Cooperation;
3. the ASEAN- China Joint Cooperation Committee (ACJCC);
4. the China-ASEAN Joint Committee on Scientific and Technological

Cooperation Committee on Scientific and
5. Technological Cooperation
ASEAN-Beijing Committee
h. In December 1997,
President Jian Zeming and all the ASEAN leaders had their first informal
summit (ASEAN+1) and issued a joint statement of establishing partnerships
of good neighborliness and good mutual trust oriented towards the 21st
century
i. 2003 - China signing of a key ASEAN security protocol, the Treaty of Amity
and Cooperation (TAC), and their declaring of each other as key strategic
partners of peace and prosperity.
BACKGROUND OF THE AGREEMENT
1. 5th ASEAN-China Summit

November 6, 2001 in Brunei Darussalam, the ten-member countries of the
ASEAN and China unanimously endorsed the creation of an ASEAN- China Free
Trade Area
2. On November 2004, the ASEAN and China agreed and signed the Framework
Agreement on Trade in Goods, which was put in force on July. Based on the
agreement, the six original ASEAN countries.
With regard to trade in services, the ASEAN and China signed an agreement for the
liberalization of the said sector in July 2007. On the other hand, the agreement on
investments is still under negotiation.
2. July 2007-the ASEAN and China signed an agreement for the liberalization of
trade in services
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RATIONALE OF ASEAN-CHINA FTA:
a. Minimizing barriers
b. Deepen economic linkages among the parties
c. Increasing intra-regional trade and investment
d. Increasing economic efficiency
e. Creating a larger market with greater opportunities and larger economies of scale
for business
f. Enhancing the attractiveness of the Parties to capital and talent.
COVERAGE OF THE AGREEMENT :
a. Early Harvest Programme (EHP)
b. Normal Track
c. Sensitive Track
a. Sensitive List
b. Highly Sensitive List
Early Harvest Program (EHP):
Chapter Description:
a. 01 Live Animals
b. 02 Meat and Edible Meat Offal
c. 03 Fish
d. 04 Dairy Produce
e. 05 Other Animals Products
f. 06 Live Tress
g. 07 Edible Vegetables
h. 08 Edible Fruits and Nuts
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Based on the provisions of the FTA, the following are the dynamics of the
agreement: ASEAN 6 and China:
a. All parties shall reduce tariffs to 0-5% not later than 1 July 2005 for at least 40%
of tariff lines that were placed under the Normal Track;
b. All parties shall reduce tariffs to 0-5% not later than 1 January 2007 for at least
60%of tariff lines under the Normal Track;
c. All parties shall eliminate their tariffs for tariff lines placed in the Normal Track
not later than 1 January 2010.
d. Flexibility shall be given to have tariffs on some tariff lines ( not exceeding 150
lines) eliminated note later than 1 January 2012;
e. All parties shall eliminate all its tariffs for tariff lines placed in the Normal Track
not later than 1 January 2012.
NORMAL TRACK
Cambodia, Lao PDR, Myanmar, Vietnam:
a. Vietnam shall reduce tariffs to 0-5% for at least 50% of its tariff lines under the
Normal Track not later than 1 January 2009.
b. Lao PDR and Myanmar shall reduce tariffs to 0-5% of its tariff lines under the
Normal Track not later than 1 January 2010.
c. Cambodia shall reduce tariffs to 0-5% of its tariff lines under the Normal Track
not later than 1 January 2012;
d. Cambodia, Lao PDR, and Myanmar shall eliminate their respective tariffs not
later than 1 January 2013 on 40% of its tariff lines placed in the Normal Track;
e. Vietnam will determine the percentage of Normal Track tariff lines to be

eliminated by 1 December 2004. Tariffs shall be eliminated not later than 1
January 2013;
f. All parties shall eliminate all its tariffs for tariff lines placed in the Normal Track
not later than 1 January 2015, with flexibility to have tariffs on some tariff lines,
not exceeding 250 tariff lines, eliminated not later than 1 January 2018;
g. All parties shall eliminate all its tariffs for tariff lines placed in the Normal Track
not later than 1 January 2018;
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SENSITIVE TRACK
The number of tariff lines which each Party can place in the Sensitive Track shall be
subject to a maximum ceiling of:
a. ASEAN 6 and China- 400 tariff lines at the HS 6- digit level and 10% of the total
import value, based on 2001 trade statistics;
b. Cambodia, Lao PDR and Myanmar-Not more than 40% of the total number of
tariff lines in the Sensitive Track or 150 tariff lines at the HS 6-digit level,
whichever is lower;
c. Vietnam-Shall be determined not later than 31 December 2004. Tariff lines that
are placed by the Parties in the Sensitive List shall be divided into sensitive and
highly sensitive. Tariff lines that are to be placed in the Highly Sensitive List shall
be subjected to the following conditions:
d. ASEAN 6 and China-Not more than 40% of the total number of lines in the
Sensitive Track or 100 tariff lines at the HS 6-digit level, whichever is lower;
e. Cambodia, Lao PDR, and Myanmar- Not more than 40% of the total number of
tariff lines in the Sensitive Track or 150 tariff lines at the HS 6-digit level,
whichever is lower; and
f. Vietnam shall be determined not later than 31 December 2004. The parties
shall reduce and, where applicable, eliminate the applied MFN tariff rates of tariff
lines in the Sensitive Track according to the following Schedule:
1. ASEAN 6 and China- Shall reduce the applied MFN tariff rates of tariff lines
placed in their respective Sensitive Lists to 20% by 1 January 2012. These
tariff rates shall be subsequently reduced to 0-5% not later than 1 January
2018.
2. Cambodia, Lao PDR, and Myanmar - Shall reduce their applied MFN tariff
rates of tariff lines placed in their respective Sensitive Lists to 20% not later
than 1 January 2015. These said tariff rates shall be subsequently reduced to
0-5% not later than 1 January 2020.
3. Vietnam-Shall reduce its applied MFN tariff rates of tariff lines in placed in its
Sensitive Lists not later than 1 January 2015 to a rate to be determined not
later than 31 December 2004. These tariffs shall be subsequently reduced to
0-5% not later than 1 January 2020.
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4. All parties shall reduce the applied MFN tariff rates of tariff lines placed in
their respective Highly Sensitive Lists to not more than 50% not later than 1
January 2015 for ASEAN 6 and China, and 1 January 2018 for the CLMV
countries.
TRADE IN SERVICES
The second component of the FTA with China is the trade in services, which entered
into force last 1 July 2007.
To expand trade in services in the region through improved market access and national
treatment for those specific sectors and subsectors where the Parties made specific
commitments.
The agreement takes into account that special and differential treatment shall be given
to Cambodia, Lao PDR, Myanmar, and Vietnam, which would allow these countries to
open fewer sectors and liberalize fewer transactions.
First package of the agreement:
a. construction,
b. environmental protection,
c. transportation,
d. sports and commerce
ASEAN commitment to China
a. Finance
b. Telecommunication
c. Education
d. Tourism
e. Construction
f. medical treatment
TRADE IN INVESTMENTS :
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Although the Free Trade Agreement with China contains a provision for an agreement
in investment to be put in place, this particular section is still being developed to date.
AREAS OF COOPERATION
a. areas of agriculture
b. information and communications technology
c. human resources development

investment,
d. development of the Mekong River basin.
e. banking,
f. finance,
g. tourism,
h. industrial cooperation,
i. transport,
j. telecommunications,
k. intellectual property rights,
l. small and medium enterprises environment,
m. bio-technology
n. fishery
o. forestry
p. forestry products
q. mining
r. energy
s. sub-regional development
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Activities to promote cooperation:
a. promotion and facilitation of trade in goods and services, and investment,
1. standards and conformity assessment;
2. technical barriers to trade/ non-tariff measures;
3. customs cooperation
b. increasing the competitiveness of SMEs;
c. promotion of electronic commerce; capacity building;
d. technology transfer
Benefits of the Agreement:
a. 1.7 billion consumers
b. a regional GDP of about US $ 2 trillion
Total trade estimated at US $ 1.23 trillion
ASEAN-INDIA FREE TRADE AGREEMENT (AIFTA)
AIFTA was signed on August 13, 2009 and entered into force on January 1, 2010 for
India, Malaysia, Singapore, and Thailand.
These Parties have completed their ratification procedures and notified other Parties of
their ratification in writing per the requirements of Article 23 of the Trade in Goods (TIG)
Agreement. The remaining ASEAN countries, namely; Brunei, Cambodia, Indonesia,
Laos, Myanmar, Philippines, and Vietnam are working to ratify AIFTA at their earliest
opportunity. The Agreement will enter into force for these Parties on June 1, 2010 or
upon a date by which that Party notifies the completion of its internal ratification
procedures, whichever is earlier.
A. Tariff Reduction and Elimination Modality
The ASEAN-India TIG Agreement covers approximately 90% of the total tariff lines
traded among the Parties. Of the approximately 5,000 items traded between ASEAN
and India, 10% will not be eligible for any tariff reduction and fall under the Exclusion
List.
The remaining 4,000 items fall into one of the following categories: the Normal Track
(divided into two sub-tracks), the Sensitive Track, Special Products, and Highly
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Sensitive List. The base rate, or starting point for duty reduction or elimination, is
indicated for each item in each Party’s schedule.
Normal Track
Normal Tracks 1 and 2 cover 80% of total tariff lines. Tariffs will be completely
eliminated for goods covered under the Normal Track in accordance with the schedule
below:
Normal Track 1
 From January 1, 2010 to December 31, 2013 for Brunei, Indonesia, Malaysia,
Singapore and Thailand, and India for these Parties.
 From January 1, 2010 to December 31, 2018 for the Philippines and India.
 From January 1, 2010 to December 31, 2013 for India, and from January 1, 2010 to
December 31, 2018 for Cambodia, Laos, Myanmar and Vietnam.
Normal Track 2
Singapore and Thailand, and India.
The details regarding the tariff lines under HS Chapters 84, 85 and 87 in the Normal
Track can be accessed at http://commerce.nic.in/trade/international_ta_indasean.asp
Sensitive Track
Under the Sensitive Track, applied MFN tariffs that are above 5% will be reduced to 5%
in accordance with the tariff reduction schedules below:
Singapore and Thailand, and India.
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Parties are allowed to maintain applied MFN tariff rates of 5% for up to 50 tariff lines.
For the remaining tariff lines, applied MFN tariff rates must be reduced to 4.5% upon
entry into force of the Agreement for ASEAN-6
1 and 5 years from entry into force of the Agreement for Cambodia, Laos, Myanmar,
and Vietnam. The AIFTA preferential tariff rate for these tariff lines will be further
reduced to 4% in accordance with the end-date set above.
Applied MFN tariff rates on 4% of the tariff lines placed in the Sensitive Track, as will be
identified by each Party on its own accord and exchanged with other Parties, will be
eliminated by:
 December 31, 2019 for Brunei, Indonesia, Malaysia, Singapore, Thailand, and India.
 December 31, 2022 for the Philippines and India.
 December 31, 2024 for Cambodia, Laos, Myanmar and Vietnam.
The details regarding the tariff lines under HS Chapters 84, 85 and 87 in the Sensitive
Track
Special Products
The Agreement aims to achieve specific duty rates in the range of 37.5% to 50% by the
end of 2019 for certain highly sensitive special products, including crude and refined
palm oil, tea, coffee, pepper and rubber. Where the applied MFN tariff rate for crude and
refined palm oil is lower than the preferential tariff under the AIFTA, the lower applied
rate shall prevail.
Highly Sensitive Lists
Tariff lines under the Highly Sensitive List are classified into three categories:
1. Category 1: reduction of applied MFN tariff rates to 50%;
2. Category 2: reduction of applied MFN tariff rates by 50%; and
3. Category 3: reduction of applied MFN tariff rates by 25%,
The above tariff reduction shall be achieved by December 31, 2019 for Indonesia,
Malaysia and Thailand, December 31, 2022 for the Philippines, and December 31, 2024
for Cambodia and Vietnam.
Exclusion List
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Ten percent of tariff lines are excluded from concessions. The Agreement provides that
the tariff lines under the Exclusion Lists will be reviewed annually with a view to
improving market access.
1. Special arrangements apply for Thailand.
2. Modality for Sensitive Track does not apply to Singapore.
3. The modality for highly sensitive list does not apply for Brunei, Laos, Myanmar
and Singapore.
B. Rules of Origin
General Rules
Under the TIG Agreement, goods not wholly produced or obtained in the exporting Party
will be deemed eligible for preferential concessions where they conform to the rule of
origin of at least 35% Regional Value Content (RVC) plus Change in Tariff Subheading
(CTSH) provided that the final process of the manufacture is performed within the
territory of the exporting Party.
Method of Determining Origin Unique Origin Criteria
1. Wholly obtained or produced
2. 35% RVC+ CTSH
3. Product Specific Rules of Origin- None
The calculation of RVC is as follows:
1. Direct Method
AIFTA Material Cost + Direct Labor Cost + Direct Overhead Cost + Other Cost + Profit x
100 ≥ 35 %
FOB Price
2. Indirect Method
Non-AIFTA Material Cost + Cost of Materials for which origin are unknown x 100 ≤ 65 %
FOB Price
Product Specific Rules (PSRs) are currently under negotiation. PSRs will require that
materials have undergone a change in tariff classification or a specific manufacturing or
53
processing operation, or satisfy an ad valorem criterion or a combination of any of these
criteria.
Rules on Accumulation of Inputs
Originating goods, which are used in a Party as material for manufacture of a product
which is eligible for preferential treatment under the Agreement, shall be considered as
originating in that Party where the manufacturing of the product has taken place.
De Minimis
AIFTA does not provide a de minimis rule for CTH standard.
C. Certification Rules
General Description
AIFTA adopts a government-certification system. Rule 13 of the Rules of Origin

provided under Annex 2 of the legal text requires that a product in order to receive
preferential tariff treatment must be supported by a certificate of origin (Form AI) issued
by a government authority designated by the exporting Party and notified to the other
Parties in accordance with the Operational Certification Procedures as set out in
Appendix D. The exporter must apply in writing to the Issuing Authority of the exporting
Party requesting for the pre-exportation verification of the origin of the product. The
exporter must submit a written application for the certificate of origin (CO) Form AI
together with appropriate supporting documents proving that the products to be
exported qualify for the issuance of a CO. The validity of the Form AI is one year.
Back-to-Back Certificate of Origin
AIFTA allows for the issuance of back-to-back CO Form AI subject to conditions laid
down in Article 11 of Appendix D.
Third-party Invoicing
AIFTA allows for third party invoicing as provided under Article 22 of Appendix D.
Advance Rulings
Not applicable under AIFTA.
Authorized Bodies
The authorized bodies are government bodies authorized to issue COs in accordance
with the laws, regulations and policies applying to that body. The CO issuing authorities
are:
54
(i)the Export Inspection Council of India or any other agency authorized by the
Government of India in accordance with laws and regulations, and
(ii) the following ASEAN authorities:
1. ASEAN Member Issuing Authority Brunei Ministry of Foreign Affairs and
2. Trade Cambodia Ministry of Commerce
3. Indonesia Ministry of Trade (Directorate General of International Trade)
4. Laos Ministry of Commerce
5. Malaysia Ministry of International Trade and Industry (Trade Services Division)
6. Myanmar Ministry of Commerce
7. Philippines Bureau of Customs (Export Coordination Division)
8. Singapore Customs (Documentation Specialist Branch)
9. Thailand Ministry of Commerce (Department of Foreign Trade, Bureau of Trade

Preference Development)
10. Vietnam Ministry of Trade (Export-Import Managing Department)
Document Retention Requirements
The record keeping requirement under AIFTA is two years. Article 16 of Appendix D
provides that the Customs Authority of the importing Party may request an importer for
information or documents relating to the origin of imported good in accordance with its
domestic laws and regulations.
Where transportation is effected through the territory of one or more non-AIFTA parties,
as described under Rule 8(c) of the AIFTA Rules of Origin, the Agreement requires that
the documents listed below be produced before the Customs Authority of the
importing Party:
 a through Bill of Lading issued in the exporting Party;
 a CO Form AI issued by the relevant Issuing Authority of the exporting Party;
 a copy of the original commercial invoice in respect of the product; and
 if any, other relevant supporting documents in evidence that the requirements of Rule of the
AIFTA Rules of Origin are being complied with.
55
ASEAN-Japan Comprehensive Economic Partnership Agreement (A-JCEPA)
- Comprehensive Economic partnership between the Ten (10) ASEAN Member

States and Japan which covers on:
a. Trade in Goods (TIG)
b. Sanitary and Phytosanitary Measures
c. Technical Barriers to Trade
d. Trade in Services
e. Trade in Investments
f. Economic Cooperation and Trade Facilitation
- Provides for the establishment of an FTA between ASEAN and Japan over a
period of ten (10) years taking into account the achievements of bilateral
negotiations between each ASEAN Member State and Japan and the further
progress of the ASEAN integration process.
- The Philippines signed and ratified the agreement on April 02, 2008 and
December 24, 2008, respectively.
Basic principles underlying the ASEAN-Japan Economic Partnership Agreement
- The ASEAN -Japan CEP should involve all ASEAN Member States and Japan
and include a broad range of sectors focusing on liberalization, facilitation and
cooperation activities, noting the principles of reciprocity, transparency and
mutual benefits to both the ASEAN and Japan.
- The integrity, solidarity and integration of ASEAN will be given consideration in

the realization of the ASEAN-Japan CEP.
- The ASEAN-Japan CEP agreement should be consistent with the rules and
disciplines of the WTO-Agreement
- Special and differential treatment should be provided to the ASEAN Member

States in recognition of their different levels of economic development.
Additional flexibility should be accorded to the newer ASEAN Member States.
56
- Flexibility should be given to address the sensitive sectors in each ASEAN
Member States and Japan
- Technical Cooperation and capacity building programs should be considered.
OBJECTIVES OF THE AGREEMENT
a. Strengthen economic integration between ASEAN and Japan through the

creation of a CEP.
b. Enhance the competitiveness of ASEAN and Japan in the world market through
strengthened partnership and linkages
c. Progressively liberalize and facilitate trade in goods and services as well as to

create transparent and liberal investment regime
d. Explore new ideas and developed appropriate measures for further co-operation
and economic integration, and
e. Facilitate the more efficient economic integration of the newer AMS and bridge
the development gap among AMS.
Product coverage under the Trade in Goods Chapter of AJCEPA:
Category Schedule of Tariff Reductions

A Immediate Tariff Elimination
B4* 4 years grace period, zero in 5th year
B5 5 years= 6 equal installments
B5* 5 years; 1 year grace period, 5 equal
annual installments
B5** 5 years grace period, zero in 6th year
B7 7 years= 8 equal annual installments
B10 10 years= 11 equal installments
B10* 10 years, 1 year grace period, 10
equal annual installments
B10** 10 years; 5 years grace period:6 equal
annual installments
R (a) 11 equal annual installments, 5% end
rate
R (b) 1 year grace period; reduced to 20%
in the second year
R (c) 8 years grace period; 5% on the 9th
year
X Excluded from any tariff commitments
57
RULES OF ORIGIN IN AJCEPA
- Products which are wholly obtained or produced in the exporting party shall be
deemed originating and eligible for preferential tariff treatment.
- The general rule of RVC of RVC 40 is applicable to all other goods except where
there is a product specific rule.
- The PSR becomes either the exclusive rule or an alternative to the General Rule
depending on the provisions of the FTA.
ROO criteria- RVC 40 or change in Tariff

General Rule heading
CO Form Form AJ
Reciprocity None
Rule
Areas of Facilitation and cooperation included in the AJCEPA
- trade-related Procedures- Facilitation of trade-related procedures will be

implemented in such areas as customs procedures by computerization,
simplification and harmonization, as far as possible to relevant international
standards
- Business Environment- each party will exert all efforts to improve the business
environment and enhance cooperation in related fields with the view that
satisfactory business environment attracts investors.
- Intellectual property rights- Japan will support ASEAN member States in

developing, improving, enhancing and implementing their intellectual property
right capabilities and in promoting accession to intellectual property right-related
international agreements. Information exchange will also be encouraged.
- Energy-cooperation in oil stockpiling, natural gas utilization and promotion of

energy efficiency.
- Information and Communications Technology- cooperation in developing

information and communications Technology infrastructure. Information
technology-related legal systems, and IT-related human resources and
promoting exchanges of IT researchers and engineers.
58
- Human-Resource Development- cooperation among the relevant organization in
each AMS
- Small and Medium Enterprises-cooperation in exchanging views on policies

relating to small and medium enterprises and expanding business opportunities
of small and medium enterprises.
- Tourism and Hospitality- cooperation in conducting seminars or information

exchange in tourism and Hospitality.
- Transportation and logistics- cooperation geared towards efficient cargo transport

system, safe, efficient and sustainable shipping and air transport.
- Standards and conformance and mutual recognition arrangement- exchange of

information concerning the standards and conformance policies and capacity
building of standardization organizations in each ASEAN Member States.
- Other possible technical cooperation projects including environment, automobile,

bio-technology, science and technology, sustainable forest management,
competition policy, food security and financial services cooperation.
A. ASEAN-Korea Free Trade Area (A-KFTA)
- Trade agreement among Ten (10) ASEAN member countries and Korea
- The framework agreement on Comprehensive Economic Cooperation between

the ASEAN and Korea was signed on December 13, 2005 in Kuala Lumpur,
Malaysia. The agreement on Trade in goods reflecting the parties’
Commitment on goods was signed on August 24, 2006 in Kuala Lumpur,
Malaysia.
- Covers economic cooperation projects on selected areas, i.e., effective trade

and investment facilitation measures and procedures and mechanisms for its
effective implementation.
- Provides for special and differential treatment to newer ASEAN Member to

compensate for different levels of economic development and to enable them
to fully participate and take advantage of the AKFTA benefits.
OBJECTIVES:
a. Strengthen and enhance economic, trade and investment cooperation among

the parties
59
b. Progressively liberalize 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
cooperation and integration.
d. Facilitate the more effective economic integration of the new ASEAN Member
Countries and bridge the development gap among the parties
e. Establish a cooperative framework for further strengthening the economic

relations among the parties.
PRODUCT COVERAGE ON AKFTA
All products except arms and ammunitions, clinical and municipal wastes and
specialized medicine for cancer. AIDS and other dreaded diseases, are covered under
the program of progressive reduction/elimination of tariffs.
TIMELINES IN THE AGREEMENT ON TRADE IN GOODS
Under the trade in Goods agreement, parties commit to progressively reduce/eliminate

tariffs on substantially all goods by:
a. January 1, 2010 fore Korea, Brunei, Indonesia. Malaysia, Philippines and

Singapore
b. January 1, 2016 for Vietnam, and
c. January 1, 2018 for Cambodia, Lao PDR and Myanmar
MODALITY FOR TARIFF REDUCTION AND ELIMINATION UNDER AKFTA
a. Normal Track:
- About 90% of all tariff lines are to be progressively reduced to 0% by 2009 for
Korea and by 2010 for ASEAN 5 ( Brunei, Indonesia, Malaysia, Philippines
and Singapore)
b. Sensitive Track:
- About 7 % of all tariff lines and 7 % of total import value for 2004 are included
in the SL and some 200 tariff lines or 3% of all tariff lines and 3% of total
import value are categorized in the HSL
- For ASEAN-5 and Korea, the following modalities may apply:
60
Sensitive list Highly Sensitive list
Reduction to 20% by Group A: reduction to not
2012 more than 50% by 2016
Reduction to 0-5% by Group B: reduction by
2016 not less than 20% by
2016
Group C: Reduction by
not less than 50% by
2016
Group D: tariff lines

subject to tariff rates
quotas
Group E: Tariff lines

exempted from
concessions (maximum)
of 40 tariff lines)
Reciprocal Tariff Rate treatment under the AKFTA
a. Determination of preferential rate to be applied to an article placed in the ST of

an exporting party (except those excluded from the concession-Group E) for
which the same article is placed in the importing party in its NT. It applies if the
tariff whom reciprocity is sought has been duly notified.
b. The following conditions shall determine the reciprocal tariff rate of exporting
party, or the NT the AKFTA:
1. The reciprocal tariff rate shall either be the tariff rate of the exporting party, or
the NT higher;
2. Notwithstanding sub-paragraph (b) the importing party can be, on its own
discretion, apply NT tariff rate even if such rate is lower than the tariff rate of the
exporting country
3. Shall in no case exceed the applied MFN rate of the same tariff line of the
importing country.
RULES OF ORIGIN IN AKFTA
61
a. Products which are wholly obtained or produced in the exporting country shall
be deemed originating and eligible for preferential tariff treatment
b. The General Rule of RVC 40 is applicable to all other goods except where
there is a product specific rule
c. The PSR becomes either the exclusive rule or an alternative to the General
Rule or a combination with the general rule depending on the provisions of the
FTA
1. ROO Criteria- RVC 40 or change in

General Rule Tariff heading
2. CO Form Form AK
3. Reciprocity Rule Conditions:
1. The product to be
imported is in the
NT of the
Philippines and in
the ST of the
exporting FTA
partner.
2. The ST rate of
FTA partner
should be 10%
and below
3. The applicable
rate is whichever
is higher between
the FTA partner’s
ST and the
Philippines’ NT
rate
4. The applicable
rate should not be
greater than the
Philippines’ MFN
rate.
EO’s issued to implement the Philippines Tariff commitments under the AKFTA
EO Phil. commitment Effectivity
62
Date
638 Reciprocal tariff treatment 11-01-2007
639 Tariff reduction Schedule for 11-02-2007
NTG products
812 90% reduction to 0% for NT with 7-7-2009
flexibility until 2012
895 Transfer to cochin from SL to 9-15-2010
NT
53 Compensation to Korea for 8-12-2012
delayed implement of tariff
commitments
73 Tariff reduction schedules for 4-26-2012
HSL Products
74 Tariff reduction Schedule for SL 4-26-2012
products and accelerated
Reduction for products
transferred from HSL or SL to
NT
B. REGIONAL COMPREHENSIVE ECONOMIC PARTNERSHIP
- a comprehensive economic partnership negotiation among the Ten (10) AMS and its
FTA partners- Australia, China, India, Japan, Korea and New Zealand
OBJECTIVES OF RCEP:
a. To achieve a modern, comprehensive, high quality and mutually beneficial

environment in the region to facilitate the expansion of reciprocal trade and
investment and contribute to global economic growth and development
b. To boost economic growth and equitable economic development, advance

economic cooperation and broaden and deepen integration in the region through
the RCEP, which will build upon our existing economic linkages.
GUIDING PRINCIPLES AND OBJECTIVES IN NEGOTIATING RCEP
a. Scope- broader and deeper engagement with significant improvements over

existing ASEAN FTA’s/CEP’s with dialogue partners.
63
b. Process- to be accomplished in a sequential manner or single undertaking or
through any other agreed modality.
c. Open Accession- to include an open accession clause to enable participation of

any of the ASEAN FTA partners if they are not ready to participate at the outset
as well as any other external economic partners.
d. Transparency- signed agreements to be made public to ensure that stakeholders

understand and take advantage of economic integration and cooperation.
e. Economic and Technical Cooperation- to be an integral part of the agreement to

support ASEAN Member States and maximize their benefits from the
implementation of the agreement.
f. Facilitation- to include practical measures and cooperative efforts to facilitate

trade and investment, including reduction of transaction costs for businesses
recognizing that regulatory and administrative requirements and processes may
constitute significant barriers to trade and investments.
g. Economic Integration- equitable economic development and strengthening

economic cooperation between ASEAN Member States as well as Between
ASEAN and its partners.
h. Special and Differential Treatment- provide for special and differential treatment
to ASEAN Member States, especially Cambodia, Lao PDR, Myanmar and Viet
Nam
i. Consistency with the WTO Agreement
j. Periodic Review- Be subject to periodic review to ensure effective and beneficial

implementation.
MAJOR EVENTS IN RCEP
a. In November 2011, The ASEAN Framework for RCEP was adopted by ASEAN
leaders in Bali , Indonesia.
b. On November 20, 2012 at the 21st ASEAN Summit, the leaders of ASEAN and its
FTA partners adopted the Joint Declaration on the Launch of Negotiations for the
RCEP in Phnom Penh, Cambodia. Leaders committed to commence
negotiations in early 2013 to conclude by the end of 2015. The guiding principles
and Objectives in Negotiating were adopted by the Economic Ministers in Siem
Reap, Cambodia on August 30, 2012.
c. The First RCEP Trader Negotiating Committee Meeting was held in May 2013 in
Bander Seri Begawan, Brunei Darrusalam. The Trade Negotiating Committee
64
agreed, among others, that the working groups created must finalize their
respective scoping papers consistent with the guiding principles and objectives in
Negotiating Committee meeting is in September 2013 in Brisbane, Australia.
Philippines-European Free Trade Association Free Trade Area (PH-EFTA FTA)
It is second bilateral agreement that the Philippines has entered into. The Agreement
with EFTA States (Iceland, Liechtenstein, Norway and Switzerland) was signed in Bern,
Switzerland on April 28,2016.
As a comprehensive agreement, the FTA covers trade in goods (includes separate

chapters for industrial goods, agricultural goods, fish and other marine products, rules of
origin, trade facilitation, SPS and TBT), trade in services, investment, competition, the
protection of intellectual property rights, government procurement, trade and
sustainable development, institutional provisions and dispute settlement.
1. What are the objectives of the PH-EFTA FTA?
a. To achieve the liberalization of trade in goods;
b. To achieve the liberalization of trade in services;
c. To mutually enhance investment opportunities;
d. To prevent, eliminate or reduce unnecessary technical barriers to trade and to

further the implementation of the WTO Agreement on the Application of Sanitary
and Phytosanitary Measures and the WTO Agreement on Technical Barriers to
Trade;
e. To promote competition in their economies, particularly as it relates to the

economic relations between the Parties;
f. To achieve further liberalization on a mutual basis of the government

procurement markets of the Parties;
g. To ensure adequate and effective protection of intellectual property rights, in

accordance with international standards;
h. To develop international trade in such a way as to contribute to the objective of

sustainable development and to ensure that this objective is integrated and
reflected in the Parties’ trade relations; and
i. To contribute to the harmonious development and expansion of work trade.
65
2. What were the major events in the PH-EFTA FTA negotiations?
In November 2013, the Philippines formally sat down with the EFTA States and
announced its interest to undertake negotiations for a Free Trade Agreement.
In June 23,2014, in the Westman Islands, Iceland, the Philippines and EFTA signed a
Joint Declaration on Cooperation (JDC) and established a Joint EFTA-Philippines
Committee.
A scoping paper was signed by the parties prior to negotiation rounds in Geneva,
Switzerland on November 24,2014.
Five rounds of negotiations were conducted from March 2015 to February 2016.
On 28 April 2016 in Bern, Switzerland, the Philippines signed a free trade agreement
with the EFTA Member States.
3. What is the entry into force of the Agreement?
The Parties are currently undertaking their respective domestic processes for the
ratification and entry into force of the Agreement.
PH-EFTA shall enter into force on the first day of the third month following the date on
which at least one EFTA State and the Philippines have deposited their instrument of
ratification, acceptance or approval with the Depositary. The Government of Norway
shall act as Depositary.
In relation to an EFTA State depositing its instrument of ratification, acceptance nor

approval after this Agreement has entered into force, this Agreement shall enter into
force on the first day of the third month following the deposit of its instrument.
If its respective legal requirements permit, a Party may apply this Agreement
provisionally, pending its entry into force for that Party. Provisional application of this
Agreement shall be notified to the Depositary.
4. What is the product coverage of this FTA?
All products at national level (8/9 digit) from HS Chapters 1-97 are covered for tariff
elimination or reduction, except those excluded products like live animals, meat and
meat offal, vegetables, tunas and tilapia for the Philippines.
5. What are the tariff commitments under the PH-EFTA FTA?
The EFTA States abolish all customs duties on imports of industrial products, including
fish and other marine products, originating in the Philippines. The Philippines will
gradually eliminate/reduce customs duties on industrial products, including fish and
66
other marine products, originating on an EFTA State. Philippine was able to exclude
products from any tariff concessions on fisheries and petrochemical products.
While market access on industrial and fishery products were negotiated with the
Philippines by the EFTA Member States as a bloc, agricultural market access was
negotiated bilaterally. Philippines gained significant concessions on agricultural
products particularly those:
That are currently being exported to the EFTA Member States, such as desiccated
coconut, prepared or preserved pineapples, tropical fruits and raw sugar; and (2) with
high potential export interest such as tropical fruits wine.
The Philippines granted the EFTA Member States agricultural market access (on a
bilateral basis) on a number of goods such as temperate fruits, mineral and aerated
waters, food preparations, chocolate, cheese and wine, among others.
6. What is the applicable Rule of Origin under this FTA?
There are product-specific rules of origin. The exporter does not need to secure a
certificate of origin from the customs authorities. Instead, the exporter can issue an
origin declaration stating that it has complied with the rules of origin under the
Agreement
7. What are the criteria for products to be eligible for concession under PH-
EFTA FTA?
A.) Product should be in the inclusion List;
B.) Product should be wholly obtained or produced in the exporting party or satisfies the
Product Specific Rule (PSR) to be deemed originating; and
C.) Exporter’s origin declaration.
Philippines-Japan Economic Partnership Agreement- P-JEPA

P-JEPA is the first bilateral economic agreement entered into by the Philippines.
Signed on September 9, 2006 in Helsinki, Finland, ratified on October 8, 2008 pursuant to
Senate Resolution No. 131 and implemented on December 11, 2008.
Described as a “new age of FTA” as it goes beyond tariff reduction and elimination on traded
goods. Other provisions include:
a. Movement of natural persons and services
67
b. Investments and cooperation on areas such as technology transfer
c. Human and resource development
d. Environment
e. Competition policy
OBJECTIVES OF P-JEPA:
a. Liberalize and facilitate trade in goods and services between the parties
b. Facilitate the mutual recognition of the results of the conformity assessment
procedures for products or processes
c. Increase investment opportunities and strengthen protection for investments and
investments activities in the parties
d. Enhance protection of intellectual and strengthen cooperation in the field thereof
to promote trade and investments in the parties
e. Promote transparency in government procurement in the parties
f. Promote competition by addressing anti-competitive activities and cooperate in
the field of competition
g. Establish a framework for further bilateral cooperation and improvement of
business environment
h. Promote transparency in the implementation of laws and regulations respecting
matters covered by the agreement, and
i. Create effective procedures for the implementation and operation of the
agreement and for the resolution of dispute
PRODUCT COVERAGE OF P-JEPA AND ITS IMPLEMENTATION PERIOD
1. Except for Rice and salt, all products falling under Chapter 1-97 at the HS 2002
nomenclature are covered
2. Implementation period is ten (10) from date of entry into force of the agreement.
PHILIPPINES OFFER LIST IN P-JEPA

CATEG NO. OF HS % TO
ORY 2020 TOTAL
MODALITY TARIFF TARIFF
LINES LINES
A Immediate tariff Eliminations 3,947 66.14
B4 4 years= 5 equal annual installments 97 1.63
B4** One single installment on the fourth year 2 0.03
upon entry into force
B5 5 years=6 equal annual installments 230 3.85
B5* 5 years, 1 year grace period, 5 equal 220 3.69
installments
B5** One single installment at the beginning of 14 0.23
the 6th year
B7 7 years, 8 equal annual installments 2 0.03
B 10 10 year=11 equal installments 1,077 18.05
B01* 10 years, 1 year grace period, 10 equal 154 2.58
installments
B10** 10 years, 5 years grace period, 6 equal 103 1.73
installments
R renegotiations 24 0.40
S Special Tariff Treatment 92 1.54
X Excluded from any commitment of 6 0.10
68
preferential treatment or renegotiation
total 5,975 100
RULES OF ORIGIN UNDER P-JEPA
1. Criteria in determining if a product is originating

a. Good is wholly-obtained or produced entirely in the party.
b. Good is produced entirely in the party exclusively from originating materials of
the party
c. Good satisfies the product specific rules set out in annex 2 of the agreement
requiring that the materials used undergo a change in tariff classification or a
specific manufacturing or processing operations, and all other applicable
requirements of Chapter 3, when the good is produced entirely in the party using
non-originating materials
2. Qualifying value content must be not less than the percentage specified by the
rule for the good
1. ROO criteria None: each product has

its own Product
Specification Rule (PSR)
2. Certificate of origin Form “JP”
(CO)
3. Reciprocity rule none
B. RULES OF ORIGIN
Rules of Origin are sets of principles to determine the economic content and nationality of the
product. There are used to ascertain the origin of the goods . i. e., not where the goods has
been shipped from, but where the goods has been deemed to have been produced or
manufactured.
Other uses of ROO includes:
a. To implement measures and instruments of commercial policy, such as anti-

dumping and quotas.
b. To determine whether the imported products shall be subjected to MFN or
preferential treatment
c. For purposes of trade statistics and issuance of certificate of origin
d. For the application of labeling and marking requirements
e. For public procurement
f. For process patent
TWO (2) types of Rules of Origin
a. Non-preferential ROO- used to implement measures and instruments of

commercial policy, such as quotas anti-dumping, safeguards, subsidy, anti-
circumvention, trade statistics, origin labelling and marking.
69
b. Preferential ROO- used to establish whether a product is qualified for preferential
tariff treatment. They are an integral component of international trading
arrangements, whether regional or bilateral, under specific FTA in order to avoid
transshipment.
BASIS CRITERIA IN DETERMINING THE COUNTRY OF ORIGIN OF A GOOD
a. Wholly Obtained.
As the term implies, wholly obtained good refers to a product occurring naturally within a country
and to a good made entirely from said product. For this type of good, origin is obviously derived
from the country from which the good is obtained.
The following categories of products are considered wholly obtained in the exporting country:
a. Agricultural product harvested there

b. Animals born and raised there
c. Products obtained from animals referred to (b) above
d. Products obtained from hunting or fishing
e. Products obtained of sea fishing and other products taken from the sea by its
vessel
f. Products made onboard its factory ships exclusively from the products referred to
in (f) above
g. Mineral products extracted from its soil of its seabed
h. Used articles collected there fit inly for the recovery of raw materials
i. Waste and scrap resulting from manufacturing operations conducted there
j. Products obtained there exclusively from the products specified In (i) above
b. Substantial transformation
This require that a good be transported into a new and different article having a distinctive
name, character por use. Under this rule, a good is a product of the country where it last
underwent substantial transformation.
THREE (3) MAJOR RULES APPLIED IN SUBSTANTIAL TRANSFORMATION
1. Regional Value Content (RVC) Requirement- value added can be expressed

either as a minimum value added content expressed in percentage of total
product cost; or a maximum allowable cost percentage assigned to the
value of imported material including those of undetermined origin.
2. Change in Tariff Classification Criteria. This includes:
70
a. Change of chapter- implies that for the origin to be conferred, the non-
originating material used to produce a good should be classified outside the
HS Chapter (2-digit level) where the final good whose origin is being
determined is classified.
b. Change of Tariff Heading- connotes that to obtain origin, the non-originating

material used to produce a goods should have been classified in a tariff
heading (4-digit level) outside the heading where the goods under
consideration is classified. Changes between the subheadings of the main
heading where the good is located will not confer origin under this rule.
c. Change in Tariff Subheading- suggest that to obtain origin, the non-originating

material used for the good under consideration must come from a different
subheading (6-digit level) other than the subheading, within the same
heading, where the good in question is located.
d. Change of Tariff Heading Split- same implication as change in tariff heading

except that an existing HS heading is (split) into two or more tariff lines.
e. Change in Tariff Subheading Split- same effect as change in Tariff

subheading except that an existing subheading is (split) into two or more tariff
lines.
3. Specific Process Rule

Some goods are required to meet special-specific rules in the Exporting FTA party. In many
cases, these rules specify a process that must be undergone in order for a good to be
considered originating.
TWO (2) METHODS USD IN DETERMINING REGIONAL VALUE CONTENT (RVC)
a. Direct/Build-up Method- the sum of the value originating materials, overhead cost
and profit is divided by the free-on-board value of the finished products
b. Indirect/build-down Method- the sum of the value of the non-originating imported

materials, parts and components including those of unknown origin is divided by
the free-on-board value of the finished good.
TWO (2) TYPES OF ACCUMULATION
1. Full Accumulation- accumulation of the full value of the product from a party in an
FTA territory.
71
2. Partial Accumulation- parties are allowed to accumulate inputs with other
member countries to hurdle the ROO criterion. Tariff preference is given to the
final exporting country.
OTHER RULES APPLIED IN DETERMINING THE COUNTRY OF ORIGIN
1. Exception Rule- this prohibits a tariff shift from a particular classification, e.g.
RVC (40) or change in Tariff heading, except from 4809 under the AANZFTA.
2. Alternative Rule- would confer origin under two different circumstances, e.g.
wholly obtained or change from youth to maturity (live horses)
3. Supplementary Rule- there are requirements, which could be in terms of
production process or characteristics of the final product which are imposed in
addition to another rule in order to complete the conferment of origin for a
[articular period.
4. Residual Rule- this is to cover those goods to which the specific rules will not
apply.
“DE MINIMIS “IN RULES OF ORIGIN
An FTA may incorporate a de minimis provision that allows a good to qualify as an originating
good provided that the total value of all non-originating materials which do not satisfy the
change in tariff classification requirement does not exceed a set percentage of the free-on-
board value of the final good, usually ranged from 7%-15%.
PROCESSES THAT DO NOT CONFER ORIGIN

Regardless of criterion used to confer origin, the following operations are considered to be
insufficient working or processing that does not confer originating status of a product.:
1. Operations to ensure preservation of products in good condition during transport

and storage (drying, chilling, adding salt, etc)
2. Simple operations consisting of sifting, sorting, classifying or matching, washing,
painting or cutting,
3. Changes of packing and breaking up and assembling of consignment
4. Simple slicing, packing or repacking or placing in bottle. Flasks, bags, boxes and
all other simple packing materials
5. Affixing of marks, labels or other like distinguishing signs on products or their
packaging
6. Simple mixing of products
7. Simple assembly of parts of products to constitute a complete product
8. Combination of two or more operations specified in (1) to (7)
9. Slaughter of animals
72
TWO KINDS OF CERTIFICATE OF ORIGIN
1. Non-preferential Treatment- CO for General Merchandise: WHITE CO

2. Preferential Treatment:
a. Generalized system of Preference GSP (Form A)
b. ATIGA: Form D
c. ACFTA: Form E
d. AKFTA: Form AK
e. PJEPA: Form JP
f. AANZFTA: Form AANZ
g. AJCEPA: Form AJ
h. AIFTA: Form AI
IMPLICATIONS TO ORIGIN CONFERMENT TO INDUSTRY

Implications of origin conferment to industry includes:
a. Cheaper input costs

b. Price advantage on export
c. Wider market access
The WTO Agreement of ROO aims at harmonization of non-preferential rules of origin that are
clear and predictable, and are administered in the transparent, consistent, uniform. Impartial
and reasonable manner. It sets out a work program for the harmonization of rules of origin to be
undertaken after the entry into force of the WTO in conjunction with the WCO.
C. TECHNICAL COMMITTEE ON RULES OF ORIGIN
This was created under the auspices of WCO and is open to all WTO Members.
FUNCTIONS;
a. To carryout harmonization work

b. To deal with any matter concerning technical problems related to rules of origin.
The Technical committee meets ONCE a year wherein other WCO Members and WTO
secretariat may attend as OBSERVERS.
Each member has the right to be represented in the Technical committee on Rules of Origin by
nominating ONE delegate and ONE or more alternatives to be its representatives. At the
Technical Committee on Rules of Origin meetings, representatives may be assisted by advisers
and WTO Secretariat may be allowed as OBSERVER.
73
Member of the WCO which are not Members of WTO may be represented at the Technical
Committee on Rules of Origin meetings by ONE Delegate and ONE or more alternates in an
observer status.
Overview of Competition Policy and Law

Competition Policy-
Refers to all laws, government policies and regulations aimed at establishing competition and maintaining
the same. It includes measures intended to pro mote, advance and ensure competitive market conditions
by the removal of control, as well as to redress anti-competitive results of public and private restrictive
practices. It aims to achieve the following objectives:
A. Promote economic efficiency, which comprises three (3) components:

1. Productive efficiency
2. Allocative efficiency
3. Dynamic efficiency
B. Correct Market Failure
C. Enhance consumer welfare
D. Achieve higher economic growth
E. Promote competitiveness in both domestic and foreign markets
Competition Law
A framework of rules and regulations designed to foster the competitive environment in a national
economy. It consists of measures intended to promote a more competitive environment as well as
enactments designed to prevent a reduction on competition.
The Five (5) Basic Market Structures in which the degree of competition affects prices, output and
profits
a. Perfect Competition- an ideal or extreme form of competition. It occurs when a market

consists of many firms selling an identical product to many buyers. Any firm that wishes
to do so can enter or leave the market.
b. Monopoly- a market with a sole supplier of goods, service or resources for which there is
no close substitute. In addition, there are barriers to entry of new firms.
c. Natural Monopoly- arises from natural barriers to entry (such as the unique source of
supply) or situation in which one firm can supply the entire market at a lower price than
two or more firms could offer.
74
d. Monopolistic Competition- similar to perfect competition, but rather than firms
producing identical products, there are many firms competing against each other by
producing similar but slightly different products.
e. Oligopoly- is characterized by a small number of firms where quantity sold by any one
firm is influenced by its choice in respect of strategic variables ( such as prices, product
design, research and development, advertising, and sales locations) and these choices are
strongly influenced by other firms in the industry. Why or why not
MARKET FAILURE
Market Failure occurs when the market is unable to achieve an efficient and equitable allocation of
resources.
Sources of market Failure
a. Public Goods
b. Income distribution
c. Monopoly
d. Externalities
e. Information Asymmetries
Main areas/concern which competition policy and law need to address:
a. Preventing enterprises entering into agreements which do not have any beneficial features
and which will restrict competition, either among themselves or between them and third
parties;
b. Controlling attempts of monopolists or dominant firms among abusing their market
position and preventing new firms from entering the market;
c. Ensuring that workable competition is maintained in oligopolistic industries
d. Monitoring mergers between independent enterprises, where the effect of the merger may
result in market concentration and reduction in competition.
I- Competition Policy and Law in ASEAN
ASEAN ECONOMIC COMMUNITY BLUEPRINT

Crafted and adopted by the ASEAN leaders in Singapore during the 13th ASEAN Summit on November
20, 2007, the ASEAN Economic Community (AEC) Blueprint serves as the master plan to establish the
AEC by the year 2015.
75
In the AEC Blueprint, the AMS committed to endeavor to introduce nationwide competition policy by
2015. The rationale is to ensure a level playing field an develop a culture of fair business competition for
enhanced economic performance in the ASEAN region in the long run.
ASEAN Experts Group on Competition
The ASEAN Experts Group on Competition (AEGC) is a formal body established by the ASEAN
Economic Ministers (AEM) in August 2007. Comprised of representatives from the competition
authorities of all AMSs nominated by their Senior Economic Officials, AEGC acts as a regional forum to
discuss and coordinate competition policies with the goal of promoting a healthy and fair competitive
environment in the ASEAN region. It also aims to promote a competition culture in ASEAN through
exchange of information. Networking and dialogue
Benefits of cooperation in competition policy in ASEAN member States
a. Promote a culture of competition in the ASEAN region

b. Facilitate co-operation or at least a high degree of consistency in the implementation of
competition policy in the ASEAN region
c. Provide AMS competition regulatory bodies with an avenue for maintaining regular
contacts and addressing practical competition concerns
d. Build an effective legal framework to enforce competition policy against businesses that
engage in cross border business practice which restrict competition
e. Improve the efficiency and effectiveness of national competition regulatory bodies
through the sharing and exchange of non-confidential information, knowledge and
resources
f. Develop agreements on the basic elements of a common framework for national
competition policy within the ASEAN region.
COMPETITION AUTHORITIES/BODIES IN ASEAN
Country Competition Authority

Brunei Darussalam Department of Economic
Planning and Development
Prime Minister’s Office
Cambodia Ministry of Commerce
Indonesia Commission for the
Supervision of Business
Competition
Lao PDR Ministry of Industry and
Commerce
Malaysia Malaysia Competition
76
Commission
Myanmar Ministry of national Planning
and Development
Philippines Department of Justice-Office
for Competition- DOJ-OFC
Singapore Competition Commission
Singapore
Thailand Office of Trade Competition
Commission
Vietnam Vietnam Competition
Authority
Vietnam Competition Council
II- COMPETITION POLICY AND LAW IN THE PHILIPPINES

Executive Order No. 143 series of 1999, was signed on August 21, 1999 purposely to
streamline/reorganize the Tariff Commission. In light of a freer and more liberal trading environment,
TC’s functions on Tariff and competition policy was strengthened and emphasized.
Mandated by law, the Commission undertook advocacy campaign programs and capacity building for the
development of competition policy and law in the Philippines and for the publication of certain
competition policy studies and briefing materials.
Functions of Executive Order No. 45:
a. Investigate all cases involving violations of competition laws and prosecute violators to
prevent, restrain and punished monopolization, cartels and combinations in restraint of
trade.
b. Enforce competition policies and laws to protect consumers from abusive, fraudulent or
harmful corrupt business practices
c. Supervise competition in Markets by ensuring the prohibitions and requirements of
competition laws are adhered to, and to this end, call on other government agencies
and/or entities for submission of reports and provisions for assistance.
d. Monitor and implement measures to promote transparency and accountability in markets,
e. Prepare, publish and disseminate studies and reports on competition to inform and guide
the industry and consumers, and
f. Promote international cooperation and strengthen Philippine Trade relations with other
countries, economies, and institutions in trade agreements
GUIDELINES TO IMPLEMENT EXECUTIVE ORDER NO. 45.

a. Section 19 of the Constitution (February 1987)
b. Acts to Prohibit Monopolies and Combinations in Restraint of Trade (December 1,
1925)
c. Revised Penal Code as amended ( December 8, 1930)
d. Public Service Act as amended (November 7, 1936)
77
e. New Civil Code (June 18, 1949), and
f. Amending the Law Prescribing the Duties and Qualifications of Legal Staff in the
Office of the Secretary of Justice (June 20, 1964)
FUNCTIONAL UNITS AND WORKING GROUPS CREATED BY DOJ-OFC
a. Consumer Protection and Welfare, with the Department of Trade and Industry a Co-
Chair.
b. Business and Economics, with the Securities and Exchange Commission as Co-Chair
c. Enforcement and Legal, with the Bureau of Internal Revenue as Co-Chair
d. Advocacy and Partnership with the Tariff Commission as Co-Chair
e. Policy and Planning, with the Philippine Institute of Development Studies as Co-Chair,
and
f. Administration
COMPETITION-RELATED PROVISIONS IN FTA’s PARTICIPATED IN BY

THE PHILIPPINES
a. Philippines-Japan Economic Partnership Agreement (PJEPA) Chapter 12
b. ASEAN-Japan Comprehensive Economic Partnership Agreement (AJCEPA) Chapter
8, Article 53, paragraph (l), and
c. ASEAN- Australia and New Zealand Free Trade Area (AANZFTA) Chapter 14.
78

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International Trade Organizations, Agreements and Rules of Origin

Comprehensive Tariff Review

b. Ad valorem tariffs- An ad valorem tariff is a charge levied on imports, defined in

c. Licenses- Import licensing can be defined as administrative procedures requiring

e. Voluntary export restraints-Voluntary export restraints (VER) are arrangements

a. Multilateral Organizations and agreements

Examples of Multilateral Organization:

The Role of Multilateral Organization:

b. Regional/Bilateral Organizations and Agreements

What are the types of rules of origin?

a. Preferential ROO-Preferential rules or origin are those which apply in

d. TRIPS and TRIMS

The Agreement on Trade-Related Investment Measures (TRIMS) recognizes that certain

THE TARIFF REFORM PROGRAM (TRP)

TARIFF REFORM PROGRAM (TRP) I- (1981 to 1985) Coverage:

IMPACT OF TRP-I ON THE PROTECTION STRUCTURE

• On Nominal Protection Rates (EPR’S)

– E.O 470 was eventually overtaken by the third TRP.

IMPACT OF TRP-III ON PROTECTION STRUCTURE

A. Agriculture and Fisheries Modernization Act of 1997. (AFMA)

- also known as the “Agriculture and Fisheries Modernization Act of 1997.

a. To modernize the Agriculture and Fisheries sectors by transforming these

TRADE AND FISCAL INCENTIVES PROVIDED UNDER AGRICULTURE AND FISHERIES

a. agricultural and fishery inputs,

ELIGIBLE FOR EXEMPTION OF IMPORT DUTIES OF AGRICULTURE AND FISHERY

A. Jewelry Industry Development Act of 1998 (JIDA)

• However, the implementing rules and regulations, as promulgated by the Department of

3. by promoting and institutionalizing the effective promotion and participations of

Incentives granted under R. A. 8502

1. Materials which include: Precious Metals; Loose gems; precious stones;

4. Additional deductions from taxable income of 50% of expenses incurred in training

7. Inclusion of locally-manufactured jewelry in the government’s tourist duty-free shops

Qualifications of the Jewelry Enterprise to avail of the incentives

1. Jewelry enterprises must be registered with the appropriate government

Role of Tariff Commission in the Promulgation of this Act.

The World Customs Organization (WCO) is an independent intergovernmental organization

WHAT ARE THE VISION AND OBJECTIVES OF WCO?

WCO is internationally acknowledged as the global

What are the main functions of the WCO?

a. To examine the technical aspects of customs systems, as well as the economic

b. To prepare draft conventions on customs matters;

c. To recommend measures that would ensure the uniform interpretation and

d. To make recommendations for the settlement of disputes concerning the

e. To furnish interested governments, on its own initiative or upon request,

HOW DOES THE WCO FULFILL ITS MANDATE?

a. Establishes, maintains, supports and promotes international instruments for the

b. Reinforces its member’s efforts to secure, through control and enforcement,

How does the WCO operate?

WHAT ARE THE DIFFERENT WORKING BODIES IN THE WCO?

c. Harmonized System Committee – administers the International Convention the HS to

WHAT ARE THE DIFFERENT WORKING BODIES IN THE WCO?

a. HS Review Sub-Committee – acts under the overall direction of the HS

b. Scientific Sub-Committee – assists the HS Committee and the Review Sub –

c. Harmonized System Working Party – under the overall direction of the HS

WHAT ARE THE DIFFERENT WORKING BODIES IN THE WCO?

b. Technical Committee on Customs Valuation – is responsible for matters pertaining to

c. Procedures and Facilitation – consists of Permanent Technical Committee, Information

The Harmonized System and Tariff Commodity Classification Rulings