WTO Trade Facilitation Symposium 8-9 Nov 2011

1. WTO Trade Facilitation Symposium 8-9 Nov 2011 Customs-Related Trade Facilitation in ASEAN Lee Tiow Yong Chair, ASEAN Customs Procedures & Trade Facilitation Working Group

2. Outline • Overview of ASEAN • ASEAN Economic Community • Comparison of WTO TF Agreement and ASEAN TF Measures • Updates on Key ASEAN Customs-related TF Initiatives • Conclusion

3. Growth in ASEAN Trade Sources: ASEAN Finance and Macroeconomic Surveillance Database and IMF-World Economic Outlook April 2010, ASEAN Trade Statistics Database as of September 2010

4. Basic Data of ASEAN Member States Diversity does not stop ASEAN from pursuing trade facilitation

5. Becoming Easier to Trade • Improvement in rankings for “Trading Across Borders” in World Bank Doing Business 2012 report • Out of the 9 countriessurveyed, 6 have improved in their rankings Source: Doing Business 2012: Doing Business in a More Transparent World, The World Bank, , published on Oct 20, 2011

6. ASEAN Economic Community • The Declaration of ASEAN Concord II (signed by ASEAN Leaders in Bali, Indonesia, 7 Oct 03) mandated the establishment of an ASEAN Community with 3 pillars: the ASEAN Security Community, the ASEAN Economic Community (AEC) and the ASEAN Socio-Cultural Community • The end goal of the AEC is to create a stable, prosperous and highly competitive ASEAN economic region in which there is a free flow of goods, services, investment, skilled labour and a freer flow of capital, equitable economic development and reduced poverty and socio-economic disparitiesby 2015 (original date was 2020; subsequently brought forward to 2015) • Declaration on the AEC Blueprint was signed by ASEAN Leaders in Singapore on 20 Nov 07 • AEC is not a customs union

7. ASEAN Economic Community • The AEC Blueprint outlines economic integration measures to be implemented by ASEAN Member States • The AEC has 4 key characteristics: (i) single market & production base; (ii) a highly competitive economic region; (iii) a region of equitable economic development; and (iv) a region fully integrated into the global economy • Strategic Schedule details the implementation timelines for the measures • To monitor compliance, an AEC Scorecard has been developed; detailing timelines, implementation bodies (the ASEAN sectoral committees) and tracking implementation status (at ASEAN-level and national-level)

8. Key Components • Elimination of Tariffs • Elimination of Non-Tariff Barriers • Rules of Origin • Trade facilitation • Customs Integration • ASEAN Single Window • Standards and Technical Barriers to Trade AEC Blueprint Single market and production base 5 core elements • Free flow of goods • Free flow of services • Free flow of investment • Freer flow of capital • Free flow of skilled labour In addition, the single market and production base also include two important components, i.e. the priority integration sectors, and food, agriculture and forestry.

9. Comparison of WTO TF Agreement and ASEAN TF Measures

10. Comparison of WTO TF Agreement and ASEAN TF Measures

11. Comparison of WTO TF Agreement and ASEAN TF Measures

12. Structures for Customs Cooperation ASEAN Finance Ministers Meeting ASEAN Economic Ministers Meeting ASEAN Directors-General of Customs Senior Economic Officials Meeting Coordinating Committee On Customs ASW Steering Committee Customs Procedures & Trade Facilitation Working Group Customs Enforcement & Compliance Working Group Customs Capacity Building Working Group ASW Technical Working Group ASW Legal Working Group

13. Strategic Plan of Customs Development Strategic Plan of Customs Development (SPCD) under the Customs Procedures and Trade Facilitation Working Group • SPCD 1 Tariff Classification • SPCD 2 Customs Valuation • SPCD 3 Origin Determination • SPCD 4 ASEAN e-Customs & ICT Customs Applications • SPCD 5 Customs Clearance • SPCD 6 Customs Transit • SPCD 7 Partnership with Businesses and the Trading Community • SPCD 8 Authorised Economic Operator Programme

14. Examples of ASEAN TF Measures • ASEAN Harmonized Tariff Nomenclature • ASEAN Customs Transit System • ASEAN Self-Certification • ASEAN Single Window

15. ASEAN Harmonized Tariff Nomenclature Implementation of the AHTN 2007 • Implemented by all Member States • Number of tariff lines reduced from 10,689 to 8,300 • CEPT and MFN lines included in the AHTN 2007 • Supplementary Explanatory Notes to the AHTN also strengthened Review of the AHTN 2007 • AHTN Task Force Meetings convened to review AHTN 2007 • Develop AHTN 2012 (in line with WCO HS 2012 amendments) • Agreed to use AHTN for intra-ASEAN and extra-ASEAN trade

16. ASEAN Customs Transit System Based on 5 key elements: • Fully computerised: electronic messages used for (i) communications between traders and Customs for the lodgement of transit declarations and the discharge of completed transit movements; and (ii) the exchange of transit movement data between customs authorities • System open to all "suitable" traders irrespective of their type of business based on an assessment by the Competent Authorities according to minimum agreed criteria based on international best practice • Risk profiling scheme: To allow reliable traders "simplifications” or exemptions from a range of standard requirements • One guarantee valid in all countries to cover the goods throughout the entire journey • Single regional customs document for transit

17. ASEAN Self-Certification of Origin • 23rd AFTA Council in Aug 2009 endorsed the work plan towards the operationalisation of self-certification in ASEAN • Exporters able to self-certify that the goods meet the rules of origin criteria and enjoy the preferential treatment • Promote utilisation of the ASEAN rules of origin and facilitate trade by reducing the upfront administrative burden of applying for the conventional certificate of origin Form D • MOU to implement pilot project signed by participating AEM in August 2010 (Brunei, Malaysia and Singapore) • Pilot project commenced 1 Nov 2010

18. ASEAN Single Window • Definition of ASW under the ASW Agreement • “the environment where National Single Windows (NSW) of Member Countries operate and integrate” • ASW Agreement – Timeline for Implementation of NSW • ASEAN-6 by 2008 • ASEAN-4 by 2012 • Implementation status of NSW: • ASEAN-6 in varying phases of implementation: basic system in place, expand to more ports, increase no. of government agencies connected to NSW, add new functionalities, etc • ASEAN-4 (CLMV) in the preparatory stages of NSW development: steering committees formed

19. ASEAN Single Window • ASW Pilot Project • Component 1: Study the establishment of the most feasible network architecture; does not involve a central server • Component 2: Set up the network infrastructure to implement the Pilot Project • Component 3: Evaluation of outcomes of the Pilot Project and formulate recommendations for the eventual ASW • 7 AMS as participants, 3 AMS as observers • Use of test data for exchanging ASEAN Customs Declaration Document Certificate of Origin Form D • Development of legal framework agreement for ASW • Alignment of ASEAN Data Model to WCO Data Model

20. Examples of Technical Assistance from Dialogue Partners

21. Conclusion • Strong commitments and clear mandates from Leaders • Striking a balance between “flexibilities in implementation” and achieving uniformity • Role of technical assistance • Need to progress from capacity building to actual implementation – proper follow through from regional commitments to national level implementation • Take into account different state of readiness of AMS – pilot project approach, differentiated timeline, etc • Need strong institutional capacity (ASEAN Secretariat) to support implementation of TF measures

22. Thank You