Trade in Goods
The Common Effective Preferential Tariff (CEPT) is an agreed effective tariff, preferential to ASEAN, to be applied to goods originating from ASEAN Member Economies, and which have been identified for inclusion in the CEPT Scheme. This is applied to all manufactured products - including capital goods, processed agricultural products, and those products failing outside the definition of agricultural products as set out in this Agreement. Agricultural products shall be excluded from the CEPT Scheme.
The ASEAN Member Economies agree to the following schedule of effective preferential tariff reductions:
(a) The reduction from existing tariff rates to 20% shall be done within a time frame of 5 years to 8 years, from 1 January 1993, subject to a programme of reduction to be decided by each Member Economy, which shall be announced at the start of the programme.
(b) The subsequent reduction of tariff rates from 20% or below shall be done within a time frame of 7 years. The rate of reduction shall be at a minimum of 5% quantum per reduction. A programme of reduction to be decided by each Member Economy shall be announced at the start of the programme.
(c) For products with existing tariff rates of 20% or below as at 1 January 1993, Member Economies shall decide upon a programme of tariff reductions, and announce at the start, the schedule of tariff reductions. Two or more Member Economies may enter into arrangements for tariff reduction to O%-5% on specific products at an accelerated pace to be announced at the start of the programme.
The above schedules of tariff reduction shall not prevent Member Economies from immediately reducing their tariffs to O%-5% or following an accelerated schedule of tariff reduction.
Type of CEPT List
The commitments are covered in different types of CEPT list:
i. Inclusion List: The Inclusion List refers to products which Member Economies are ready to commit to eliminate import duties, quantitative restrictions and non-tariff barriers.
The schedule is as follows:
- not later than 1 Jan 2010 for ASEAN 6 countries and;
- not later than 1 Jan 2015 for CLMV countries.
The preferential rates will only apply if the product is in the Inclusion List of both economies.
ii. Temporary Exclusion List: The Temporary Exclusion List refers to a list of products which economies are temporarily not ready to commit to the CEPT scheme.
iii. Sensitive and Highly Sensitive List: Comprises unprocessed agricultural products which will be phased into Inclusion List according to the following schedule:
- Beginning 1 Jan 2001 and to be completed not later than 1 Jan 2010 for ASEAN 6 countries
- Beginning 1 Jan 2006 and to be completed not later than 1 Jan 2013 for Vietnam
- Beginning 1 Jan 2008 and to be completed not later than 1 Jan 2015 for Laos and Myanmar
- Beginning 1 Jan 2008 and to be completed not later than 1 Jan 2017 for Cambodia
iv. General Exclusion List: This list of products is permanently excluded from CEPT scheme due to national security, public morals and health reasons.
Priority Integrated Sector
The Priority Integrated Sector (PIS) was announced with the objective of accelerating the liberalisation of about 11 sectors. The "priority sectors" refer to the
(a) sectors listed below:-
(i) agro-based products;
(ii) air travel;
(iii) automotives;
(iv) e-ASEAN;
(v) electronics;
(vi) fisheries;
(vii) healthcare;
(viii) rubber-based products;
(ix) textiles and apparels;
(x) tourism;
(xi) wood-based products; and
(b) such other sectors as may be identified by the Ministers responsible for ASEAN economic integration of this Framework Agreement.
Out of 11 sectors, nine cover trade in goods. For these sectors in the PIS, Member Economies shall eliminate all CEPT tariff lines except for the sensitive, highly sensitive and general exception lists by January 2012.