Jakarta, 1 August 2022 (TDI): ASEAN Trade in Goods Agreement (ATIGA) reduces the tariffs and non-tariff barriers to trade which brings ASEAN close to its goal of becoming a single market and production base.
The most recent ASEAN for Business Bulletin provides information on ATIGA’s development and effects on the open market in the region.
ATIGA brings ASEAN closer to its goal of becoming a single market and production base by reducing the tariff & non-tariff barriers for trade.
The latest ASEAN for Business Bulletin gives insight about ATIGA’s progress & impact to the region’s open market: https://t.co/UFikm8Wngq pic.twitter.com/WO7h6UzYvn
— ASEAN (@ASEAN) August 1, 2022
The ASEAN Secretariat’s Enterprise and Stakeholder Engagement Division publishes a bulletin called ASEAN for Business. For businesses operating in the region, the bulletin offers concise information on specific issues relating to the ASEAN Economic Community (AEC).
Progress by the implementation of ATIGA
The ASEAN has always proven its commitment to maintaining an open market. To strengthen its commitment to an open and interconnected regional economy, ASEAN signed the ASEAN Trade in Goods Agreement (ATIGA) in 2009, during the worst global economic crisis since the Great Depression.
The Common Effective Preferential Tariff Scheme for the ASEAN Free Trade Agreement (CEPT-AFTA) is consolidated and simplified by the ATIGA.
It encourages trade in the region by lowering tariffs, revising rules of origin, standardizing the customs and clearance process, and reducing or removing non-tariff obstacles.
According to Economic Research Institute for ASEAN and East Asia (ERIA) report, the ATIGA’s commitments to liberalize trade tariffs have mostly been fulfilled, which has helped ASEAN get closer to its goal of creating a “single market and a production base.”
By 2010, Brunei Darussalam, Thailand, Malaysia, Indonesia, Singapore, and the Philippines had removed import tariffs on 99% of tariffs.
In addition, the average tariffs for Cambodia, Lao PDR, Myanmar, and Vietnam decreased from 2.61 percent in 2010 to 0.11 percent in 2022. This led to an even greater reduction in average intra-ASEAN tariffs, which fell from 1.06 percent in 2010 to 0.06 percent in 2022.
Furthermore, the ATIGA boosted the Margin of Preferences (MOP) in highly protected sectors like agricultural products, which resulted in high rates of ATIGA utilization in this sector.
ATIGA looking to eliminate non-tariff barriers. ATIGA tries to make sure that the Rules of Origin (ROOs) are trade-facilitative, simple to follow, and its Operational Certification Procedures (OCP) are user-friendly.
To further clarify the meaning of certain provisions, ATIGA revised OCP provisions and simplified the paperwork requirements, such as, the minimum data requirements for applications of Certificates of Origin (Form D).
All ASEAN member states (AMS) entered the ASEAN Single Window (ASW) Live Operation in 2019. This enables the ATIGA electronic Certificate of Origin (e-Form D) exchanged through the ASW to be used as the basis for preferential tariff treatment.
As a result, trading procedures and paperwork processes might be streamlined, and the traders’ operating costs and time is reduced. 880,000 e-Form D exchanges were made by AMS in 2021 through the ASW.
Through the establishment of the ASEAN-wide Self-Certification (AWSC) program, ATIGA greatly simplified the origin certification process. This allowed qualified exporters to self-certify the origin status of their goods to be eligible for ATIGA tariff benefits.
More than 600 accredited exporters were registered in ASEAN as of July 2022.
Challenges to ATIGA
The implementation of ATIGA continues to face several difficulties. One example is the administrative costs associated with compliance brought on by the usage of hard copy of Certificate of Origin (Forum D).
Additionally, ASEAN Business Sentiment Study 2020/2021 indicated that Micro, Small, and Medium Enterprises (MSMEs) in ASEAN are not well-aware of the pact.
Recognizing these difficulties, the ASEAN Economic Ministers (AEM) give the insight to revise ATIGA to keep it updated, forward-looking, responsive to new developments, and inclusive of MSMEs.
Acknowledging these challenges, ASEAN Economic Ministers (AEM) launched the negotiation to upgrade ATIGA to cut trade costs, remove regulatory obstacles, remove unnecessary obstacles in logistics, and set ASEAN on a more inclusive and sustainable growth path.
