A significant milestone of economic integration in the ASEAN region
is the substantial progress in tariff liberalization, with the average tariff
rate now at less than 5%. The achievement in tariff reduction, however,
has been marred by non-tariff barriers (NTBs). While the commitment
to eliminate NTBs has always been an integral part of the liberalization
program of the ASEAN member states, little progress has been made
to address them.
There are increasing concerns about NTBs. First, they have replaced
tariffs as protective measures for domestic industries (World Bank
2008). Second, the bulk of intra-regional trade transactions among the
ASEAN economies is driven by the global production networks of
multinational companies in the region.2 Efficiency in moving goods
across borders has thus become crucial in capturing and creating trade