1) Joseph Weiler, International and Regional Trade Law: The Law of the These, in turn, may give it a comparative
y give it a comparative advantage in other economic
World Trade Organization, Unit I (2013), pp. 5-6, 12-13, 16-19
The Economics of International Trade
Comparative Advantage
- Paul Samuelson: the principle of comparative advantage was the only big
idea that Economics had produced that was both true and surprising.
- One of the oldest theories in economics; favorite of David Ricardo
- What is it?
The theory underpins the economic case for FREE TRADE.
But it is often misunderstood or misrepresented by opponents of free
trade.
It shows how countries can gain from trading with each other even if one
of them is more efficient it has an ABSOLUTE ADVANTAGE in
every sort of economic activity.
Comparative advantage is about identifying which activities a country (or
firm or individual) is most efficient at doing.
the ability of an individual or group to carry out a particular economic
activity (such as making a specific product) more efficiently than another
activity
- What is its main effect?
In essence, the theory of comparative advantage says that it pays
countries to trade because they are different.
It is impossible for a country to have no comparative advantage in
anything.
It may be the least efficient at everything, but it will still have a
comparative advantage in the industry in which it is relatively least bad.
- What is a possible future effect?
There is no reason to assume that a countrys comparative advantage will
be static.
If a country does what it has a comparative advantage in and sees its
INCOME grow as a result, it can afford better education and
INFRASTRUCTURE.
Page !1 of ! 47
activities in future.
Scenario: Imagine two countries, Alpha and Omega.
- Each country has 1,000 workers and can make two goods, computers and
cars.
- Alphas economy is far more productive than Omegas.
- To make a car, Alpha needs two workers, compared with Omegas four.
- To make a computer, Alpha uses 10 workers, compared with Omegas 100.
- If there is no trade, and in each country half the workers are in each
industry, Alpha produces 250 cars and 50 computers and Omega produces
125 cars and 5 computers.
What if the two countries specialise?
- Although Alpha makes both cars and computers more efficiently than
Omega (it has an absolute advantage), it has a bigger edge in computer
making.
- So it now devotes most of its resources to that industry, employing 700
workers to make computers and only 300 to make cars.
- This raises computer output to 70 and cuts car production to 150.
- Omega switches entirely to cars, turning out 250.
Effect:
- World output of both goods has risen.
- Both countries can consume more of both if they trade, but at what PRICE?
- Neither will want to import what it could make more cheaply at home.
- So Alpha will want at least 5 cars per computer, and Omega will not give
up more than 25 cars per computer.
- Suppose the terms of trade are fixed at 12 cars per computer and 120 cars
are exchanged for 10 computers.
- Then Alpha ends up with 270 cars and 60 computers, and Omega with 130
cars and 10 computers.
- Both are better off than they would be if they did not trade.
- This is true even though Alpha has an absolute advantage in making both
computers and cars.
- The reason is that each country has a different comparative advantage.
- Alphas edge is greater in computers than in cars.
- Omega, although a costlier producer in both industries, is a less expensive
maker of cars.
- If each country specialises in products in which it has a comparative
advantage, both will gain from trade.

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International Trade Law and the WTO Economic integration, as defined here, can take several forms that represent
Stages of Economic Integration varying degrees of integration.

What does economic integration mean? Free Trade Area tariffs (and quantitative restrictions) between the
In everyday usage: the word integration denotes the bringing together of participating countries are abolished, but each country
parts into a whole. retains its own tariffs against non-members.
In the economic literature: the term economic integration does not have
Customs Union involves, (1) suppression of discrimination in the field
such a clear-cut meaning. of commodity movements within the union and (2) the
- Some authors include social integration in the concept, equalization of tariffs in trade with non-member
- others subsume different forms of international cooperation under this countries.
heading, and
- the argument has also been advanced that the mere existence of trade Common Market abolition of (1) trade restrictions and (2) restrictions on
factor movements
relations between independent national economies is a sign of integration.
Economic Union combines the suppression of restrictions on commodity
Authors proposed definition of economic integration: as a process and as a and factor movements with some degree of
state of affairs. harmonization of national economic policies, in order
- Regarded as a process, it encompasses measures designed to abolish to remove discrimination that was due to disparities in
discrimination between economic units belonging to different national these policies
states;
- viewed as a state of affairs, it can be represented by the absence of Complete Economic unification of monetary, fiscal, social, and
various forms of discrimination between national economies. Integration countercyclical policies; requires the setting-up of a
supra-national authority whose decisions are binding
for the member states
In interpreting our definition, distinction should be made between integration
and cooperation.
What is the theory of economic integration concerned with?
Integration Cooperation (1) with the economic effects of integration in its various forms and
(2) with problems that arise from divergences in national monetary, fiscal,
comprises measures that entail includes actions aimed at and other policies.
the suppression of some forms of lessening discrimination
discrimination How should the theory of economic integration regarded?
(1) as a part of international economics and
Ex. removal of trade barriers Ex. international agreements on (2) as one that enlarges the field of international trade theory by
trade policies (a) exploring the impact of a fusion of national markets on growth and
(b) examining the need for the coordination of economic policies in a
abolition of discrimination within union
an area
Finally, the theory of economic integration should incorporate elements
of location theory, too. Why?
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- The integration of adjacent countries amounts to the removal of artificial
barriers that obstruct continuous economic activities through national
frontiers, and
- the ensuing relocation of production and regional agglomerative and
deglomerative tendencies cannot be adequately discussed without making
use of the tools of location analysis.

Page !4 of ! 47
Chapter 1 Basics c)Although negotiated and signed by governments, the goal is
to
I. What is the WTO? (1) help producers of goods and services, exporters, and
A. Background importers conduct their business,
1. Born on 1 January 1995 (2) while allowing governments to meet social and
2. Trading system, however, came about in 1948 environmental objectives.
a) Thank GATT I found you - GATT provided rules for the 3. Overriding Purpose: help trade flow as freely as possible
system a) Why? This is important for economic development and well-
3. GATT (trade in goods) vs WTO (trade in goods, services and being
inventions, creations and designs [intellectual property]) b) What does it mean?
(1) removing obstacles,
B. Generally (2) ensuring individuals, companies and governments know
1. It is the organization that deals with the rules of trade between what the trade rules are around the world, and
nations at a global or near global level. (3) giving individuals, companies and governments the
2. Its an organization for liberalizing trade. confidence that there will be no sudden changes of
3. Its a forum for governments to negotiate trade agreements. policy.
4. Its a place for them to settle trade disputes. c) Bottomline: Be Transparent. Be Predictable.
5. It operates a system of trade rules.
E. It helps settle disputes.
C. It is a negotiating forum. 1. Why is it necessary?
1. The WTO is a place where member governments go, to try to sort a) Trade relations often involve conflicting interests.
out the trade problems they face with each other. b) Agreements, including those painstakingly negotiated in the
2. The WTO was born out of negotiations. WTO system, often need interpreting.
a) Mainly the 1986-94 negotiations aka the Uruguay Round 2. What is the purpose behind the dispute settlement process written
b) Also earlier negotiations under the General Agreement on in WTO agreements?
Tariffs and Trade a) The most harmonious way to settle these differences is
3. Everything the WTO does is the result of negotiations. through some neutral procedure based on an agreed legal
foundation.
D. Its a set of Rules.
II. Principles of the Trading System [foundation of the multilateral
1. Its rules support maintaining trade barriers.
trading system]
a) Ex. protection of consumers
A. What do WTO agreements usually deal with? Agriculture, textiles
b) Ex. prevent the spread of disease and clothing, banking, telecommunications, government purchases,
2. At its heart are the WTO Trade agreements. industrial standards and product safety, food sanitation regulations,
a) These documents provide the legal ground-rules for intellectual property, and much more
international commerce.
b) They are essentially contracts, binding governments to keep B. Trade without discrimination
their trade policies within agreed limits. 1. Most-favoured-nation: treating other people equally
Page !5 of ! 47
a) What is it? (3) Under GATT and now the WTO, the MFN club is no
(1) Under the WTO agreements, countries cannot normally longer exclusive.
discriminate between their trading partners. (4) The MFN principle ensures that each country treats its
(2) Grant someone a special favour (such as a lower customs over-140 fellow members equally.
duty rate for one of their products) and you have to do
the same for all other WTO members. 2. National treatment: treating foreigners and locals equally
(3) Rule: Every time a country lowers a trade barrier or a) What is it?
opens up a market, it has to do so for the same goods (1) Giving others the same treatment as ones own
or services from all its trading partners whether rich nationals
or poor, weak or strong. b) How is it applied?
b) How important is it? (1) Imported and locally-produced goods should be treated
(1) It is the first article of the GATT. equally at least after the foreign goods have entered
(2) It is also the priority of the General Agreement on Trade the market.
in Services (GATS, Art. 2) and Agreement on Trade- (2) The same should apply
Related Aspects of IP rights (TRIPS, Art. 4). (a) to foreign and domestic services, and
c) Exceptions (only under strict conditions) (b) to foreign and local trademarks, copyrights and
(1) Countries can set up a free trade agreement that applies patents.
only to goods traded within the group discriminating c) How important is it?
against goods from outside. (1) Article 3 of GATT,
(2) Countries can give developing countries special access to (2) Article 17 of GATS and
their markets. (3) Article 3 of TRIPS
(3) A country can raise barriers against products that are d) When does it apply?
considered to be traded unfairly from specific countries.
(1) Treatment only applies once a product, service or item of
(4) In services, countries are allowed, in limited intellectual property has entered the market.
circumstances, to discriminate.
(2) Effect: Charging customs duty on an import is not a
d) Why most favoured? violation of national treatment even if locally-produced
(1) Each member treats all the other members equally as products are not charged an equivalent tax.
most-favoured trading partners.
(2) If a country improves the benefits that it gives to one C. Freer trade: gradually, through negotiation
trading partner, it has to give the same best treatment to
1. How is it achieved? By lowering trade barriers
all the other WTO members so that they all remain
most- favoured. 2. What kind of trade barriers?
e) MFN history a) customs duties (or tariffs) and
(1) Most-favoured nation (MFN) status did not always mean b) measures such as import bans or quotas that restrict quantities
equal treatment. selectively
(2) The first bilateral MFN treaties set up exclusive clubs c) red tape
among a countrys most- favoured trading partners. d) exchange rate policies
3. How many rounds of trade negotiations have there been?

Page !6 of ! 47
 a) 8 since the GATTs creation in 1947-48.
b) 9th round is underway (Doha Development Agenda)
4. What is the focus of these negotiations?
a) Lowering tariffs on imported goods
b) Expanded to: non-tariff barriers
c) Expanded to: services and IP
5. What is the benefit of WTO agreements?
a) Opening markets can be beneficial, but it also requires
adjustment.
b) The WTO agreements allow countries to introduce changes
gradually, through progressive liberalization.
c) Developing countries are usually given longer to fulfil their
obligations.
D. Predictability: through binding and transparency
1. Sometimes, promising not to raise a trade barrier can be as
important as lowering one - why?
a) Because the promise gives businesses a clearer view of their
future opportunities.
2. What is the importance of stability and predictability?
a) investment is encouraged,
b) jobs are created and
c) consumers can fully enjoy the benefits of competition
choice and lower prices
3. What is the objective of a multilateral trading system?
a) It is an attempt by governments to make the business
environment stable and predictable.
4. How?
a) In the WTO, when countries agree to open their markets for
goods or services, they bind their commitments. What
does bind mean?
(1) For goods, these bindings amount to ceilings on customs
tariff rates.
(2) Sometimes, countries tax imports at rates that are lower
than the bound rates.
(a) Frequently, this is the case in developing countries.
1 Exporting at below cost to gain market share
Page !7 of ! 47
(b) In developed countries, the rates actually charged and
the bound rates tend to be the same.
(3) Can a country change its bindings?
(a) Yes, but only after negotiating with its trading
partners, which could mean compensating them for
loss of trade.
b) Discourage the use of quotas and other measures used to
set limits on quantities of imports administering quotas
can lead to more red-tape and accusations of unfair play.
c) Make countries trade rules as clear and public
(transparent) as possible.
(1) Many WTO agreements require governments to disclose
their policies and practices publicly within the country or
by notifying the WTO.
d) Regular surveillance of national trade policies through the
Trade Policy Review Mechanism provides a further means of
encouraging transparency both domestically and at the
multilateral level
E. Promoting fair competition
1. The WTO is a system of rules dedicated to open, fair and
undistorted competition
2. What is the objective of MFN, national treatment, dumping1,
subsidies?
a) Secure fair conditions of trade
3. What are the rules for?
a) the rules try to establish
(1) what is fair or unfair, and
(2) how governments can respond,
(a) in particular by charging additional import duties
calculated to compensate for damage caused by
unfair trade
F. Encouraging development and economic reform
1. Developing countries need flexibility in the time they take to
implement the systems agreements.
2. The agreements themselves inherit the earlier provisions of
GATT that allow for special assistance and trade concessions for
developing countries.
3. What happened in the Uruguay Round?
a) Developing countries were prepared to take on most of the
obligations that are required of developed countries.
b) But the agreements did give them transition periods to adjust
to the more unfamiliar and, perhaps, difficult WTO
provisions particularly so for the poorest, least-
developed countries.
c) A ministerial decision adopted at the end of the round says
better-off countries should accelerate implementing market
access commitments on goods exported by the least-
developed countries, and it seeks increased technical
assistance for them.
4. Whats happening in the Doha Round?
a) The discussion now involves developing countries concerns
about the difficulties they face in implementing the Uruguay
Round agreements. Hahaha!

Page !8 of ! 47
 the general incidence of the duties and regulations of
3) Weiler, Unit II, pp. 5-6 commerce
A. GATT Article XXIV: 4-10 applicable in the constituent territories prior to
- the formation of such union or
1. Paragraph 4: - the adoption of such interim agreement, as the case
a) What do the contracting parties recognize? may be;
(1) the desirability of increasing freedom of trade by the
development of closer integration between the (2) [subparagraph b]with respect to a free-trade area, or
economies of the countries parties to such agreements an interim agreement leading to the formation of a
How? through voluntary agreements, free-trade area?
(2) that the purpose of a customs union or of a free-trade area the duties and other regulations of commerce
should be to facilitate trade between the constituent - maintained in each of the constituent territories and
territories - applicable at the formation of such free-trade area or
not to raise barriers to the trade of other contracting parties the adoption of such interim agreement to the trade of
with such territories contracting parties
not included in such area or
2. Paragraph 5: not parties to such agreement
a) What shall these provisions NOT prevent? shall not be higher or more restrictive than
(1) the formation of a customs union or of a free-trade area - the corresponding duties and
or - other regulations of commerce
(2) the adoption of an interim agreement necessary for the existing in the same constituent territories
formation of a customs union or of a free-trade area; prior to the formation of the
- free-trade area, or
b) As between? - interim agreement as the case may be; and
(1) as between the territories of contracting parties,
(3) [subparagraph c]any interim agreement referred to
c) What are the conditions/provisos in subparagraphs (a) and (b)?
(1) [subparagraph a]with respect to a customs union, or shall include a plan and schedule
an interim agreement leading to a formation of a for the formation of such a customs union or of such a free-
customs union? trade area
the duties and other regulations of commerce within a reasonable length of time.
- imposed at the institution of any such union or
interim agreement 3. Paragraph 6:
- in respect of trade with contracting parties not parties a) What shall apply if, in fulfilling the requirements of
to such union or agreement subparagraph 5 (a), a contracting party proposes to
shall not increase any rate of duty inconsistently with the
- on the whole provisions of Article II?
be higher or more restrictive than The procedure set forth in Article XXVIII shall apply.
Page !9 of ! 47

b) What shall be considered in providing for compensatory
adjustment?
Due account shall be taken of the compensation already
afforded by the reduction
- brought about in the corresponding duty of the other
constituents of the union.
4. Paragraph 7:
a) [subparagraph a] What is obligation of any contracting
party deciding to enter into a customs union or free-trade
area, or an interim agreement leading to the formation of
such a union or area?
(1) Promptly notify the CONTRACTING PARTIES and
(2) Make available to them such information regarding
the proposed union or area
(a) For what? As will enable the contracting parties to
make such reports and recommendations to
contracting parties as they may deem appropriate.
b) [subparagraph b] What must CONTRACTING PARTIES
do with respect to an interim agreement?
(1) Study plan and schedule included in an interim
agreement referred to in paragraph 5
(a) How?
i) in consultation with the parties to that agreement
and
ii) taking due account of the information made
available in accordance with the provisions of
subparagraph (a)
c) After that, what happens if the CONTRACTING
PARTIES find
(1) that such agreement is not likely to result in the
formation of a customs union or of a free-trade area
within the period contemplated by the parties to the
agreement or
(2) that such period is not a reasonable one?
Page !10 of !47
(a) The CONTRACTING PARTIES shall make
recommendations to the parties to the agreement.
(b) The parties shall not maintain or put into force, as the
case may be, such agreement if they are not
prepared to modify it in accordance with these
recommendations.
d) What must be done if there is any substantial change in
the plan or schedule referred to in paragraph 5 (c)?
(1) It shall be communicated to the CONTRACTING
PARTIES.
(2) What may they do? They may request the contracting
parties concerned to consult with them
(a) What instance? If the change seems likely to
jeopardize or delay unduly the formation of the
customs union or of the free-trade area
5. Paragraph 8: For the purposes of this Agreement:
a) [subparagraph a] What is customs union understood to
mean?
(1) the substitution of a single customs territory for two or
more customs territories,
(2) For what purposes?
(a) [subparagraph a(1)] so that duties and other
restrictive regulations of commerce are eliminated
i) With respect to what?
(1) with respect to substantially all the trade
between the constituent territories of the
union or
(2) at least with respect to substantially all the
trade in products originating in such
territories
ii) Any exceptions?
(1) except, where necessary, those permitted
under Articles XI, XII, XIII, XIV, XV and
XX are eliminated, and,
(b) [subparagraph a(2)] so that substantially the same
duties and other regulations of commerce are applied
 i) By whom? by each of the members of the union 7. Paragraph 10
ii) To whom? to the trade of territories not included a) The CONTRACTING PARTIES may approve proposals
in the union; (1) which do not fully comply with the requirements of
iii) Any limits? Subject to the provisions of paragraphs 5 to 9 inclusive,
paragraph 9, (2) provided that such proposals lead to the formation of a
customs union or a free-trade area in the sense of this
(b) [subparagraph b] What is a free trade area understood to Article.
mean? b) How? by a two-thirds majority
(1) a group of two or more customs territories in which the
duties and other restrictive regulations of commerce are
eliminated
(2) With respect to what? on substantially all the trade
between the constituent territories in products originating
in such territories
(3) Any exceptions? except, where necessary, those
permitted under Articles XI, XII, XIII, XIV, XV and XX

6. Paragraph 9:
a) The preferences referred to in paragraph 2 of Article I 2
(i) shall not be affected by the formation of a customs union
or of a free-trade area
(ii) but may be eliminated or adjusted by means of
negotiations with contracting parties affected.*
(b) This procedure of negotiations with affected contracting
parties shall, in particular, apply to the elimination of
preferences
(i) required to conform with the provisions of paragraph 8
(a)(i) and paragraph 8 (b).

2 2. The provisions of paragraph 1 of this Article shall not require the elimination of any preferences in respect of import duties or charges which do not exceed the levels provided
for in paragraph 4 of this Article and which fall within the following descriptions:

(a) Preferences in force exclusively between two or more of the territories listed in Annex A, subject to the conditions set forth therein;
(b) Preferences in force exclusively between two or more territories which on July 1, 1939, were connected by common sovereignty or relations of protection or suzerainty and
which are listed in Annexes B, C and D, subject to the conditions set forth therein;
(c) Preferences in force exclusively between the United States of America and the Republic of Cuba;
(d) Preferences in force exclusively between neighbouring countries listed in Annexes E and F.

Page !11 of ! 47

B. Understanding on the Interpretation of Article XXIV of the
General Agreement on Tariffs and Trade 1994
Preliminary Considerations
I. Having regard to the provisions of Article XXIV of GATT 1994;
II. Recognizing
A. that customs unions and free trade areas
1. since the establishment of GATT 1947, have greatly increased in
number and importance
2. today, cover a significant proportion of world trade;
B. the contribution to the expansion of world trade
1. that may be made by closer integration between the economies of
the parties to such agreements;
C. that such contribution is
1. increased,
a) if the elimination between the constituent territories of duties
and other restrictive regulations of commerce extends to all
trade, and
2. diminished
a) if any major sector of trade is excluded;
D. the need for a common understanding of the obligations of Members
under paragraph 12 of Article XXIV
III. Reaffirming
A. that the purpose of such agreements should be
1. to facilitate trade between the constituent territories and
2. not to raise barriers to the trade of other Members with such
territories; and
B. that in their formation or enlargement,
1. the parties to them should avoid creating adverse effects on the
trade of other Members
a) to the greatest possible extent,;
Page !12 of !47
IV. Convinced also of the need to reinforce the effectiveness of the role of the
Council for Trade in Goods in reviewing agreements notified under
Article XXIV, by
A. clarifying the criteria and procedures for the assessment of new or
enlarged agreements, and
B. improving the transparency of all Article XXIV agreements;
Hereby agree as follows:
1. Customs unions, free-trade areas, and interim agreements leading to the
formation of a customs union or free-trade area must satisfy provisions of
paragraphs 5, 6, 7 and 8 of Aricle XXIV.
A. Why? To be consistent with Article XXIV
2. XXIV: 5
1. What does the evaluation under paragraph 5(a) of Article XXIV
pertain to? The general incidence of the duties and other
regulations of commerce
2. Applicable when? Those applicable before and after the formation
of a customs union
3. What shall they be based on? an overall assessment of weighted
average tariff rates and of customs duties collected
4. In respect to what? In respect of duties and charges
5. What shall the assessment be based upon? On import statistics for a
previous representative period
6. Where shall the statistics come from? To be supplied by the customs
union
7. What format of statistics? On a tariff-line basis and in values and
quantities, broken down by WTO country of origin.
8. What shall the Secretariat compute? The weighted average tariff
rates and customs duties collected
1. How?
1. In accordance with the methodology used in the assessment
of tariff offers in the Uruguay Round of Multilateral Trade
Negotiations.
2. For this purpose, the duties and charges to be taken into
consideration shall be the applied rates of duty.
 9. What else may be required for the purpose of the overall assessment
of the incidence of other regulations of commerce for which
quantification and aggregation are difficult?
1. The examination of
1. individual measures,
2. regulations,
3. products covered and
4. trade flows affected
10. What does reasonable length of time referred to in paragraph 5(c) of
Article XXIV mean?10 years or less; it should exceed 10 years only
in exceptional cases.
- What should be done in cases where Members parties to an
interim agreement believe that 10 years would be insufficient?
They shall provide a full explanation to the Council for Trade in
Goods of the need for a longer period.
3. XXIV: 6
1. What does this paragraph establish? The procedure to be followed
when a Member forming a customs union proposes to increase a
bound rate of duty.
2. What is reaffirmed by this paragraph? That the procedure set forth3
must be
1. commenced before tariff concessions are modified or
2. withdrawn upon the formation of a customs union or an interim
agreement leading to the formation of a customs union
3. How shall these negotiations be entered into?
1. in good faith
2. with a view to achieving mutually satisfactory compensatory
adjustment
3. What shall be considered in such negotiations, as required by
paragraph 6 of Article XXIV?
reductions of duties on the same tariff line made by other
constituents of the customs union upon its formation.
4. What if such reductions are not sufficient to provide the necessary
compensatory adjustment? The customs union would offer
3in Article XXVIII, as elaborated in the guidelines adopted on 10 November 1980 (BISD 27S/26-28) and in the Understanding on the Interpretation of Article XXVIII of
GATT 1994,
Page !13 of !47
compensation, which may take the form of reductions of duties
on other tariff lines.
Who shall take consideration of such offer? Such an offer
shall be taken into consideration by the Members having
negotiating rights in the binding being modified or
withdrawn.
5. What if the compensatory adjustment remain unacceptable? Then
negotiations should be continued.
6. What if, despite such efforts, agreement in negotiations on
compensatory adjustment cannot be reached within a reasonable
period from the initiation of negotiations?
1. The customs union shall, nevertheless, be free to modify or
withdraw the concessions;
2. Affected Members shall then be free to withdraw
substantially equivalent concessions in accordance with
Article XXVIII.
4. Is the provision of compensatory adjustments mandatory? No.
GATT 1994 imposes no obligation on Members benefiting from a
reduction of duties consequent upon the formation of a customs
union, or an interim agreement leading to the formation of a customs
union, to provide compensatory adjustment to its constituents.
4. Review of Customs Unions and Free-Trade Areas
1. What shall be done with all notifications made under paragraph 7(a)
of Article XXIV?
1. Shall be examined by a working party
2. How? In the light
1. of the relevant provisions of GATT 1994 and
2. of paragraph 1 of this Understanding.
2. After examination, what must be done?
1. The working party shall submit a report to the Council for Trade
in Goods on its findings in this regard.
2. T h e C o u n c i l f o r Tr a d e i n G o o d s m a y m a k e s u c h
recommendations to Members as it deems appropriate.
 3. In regard to interim agreements, what may the working party make in
its report?
1. appropriate recommendations
1. on the proposed time-frame and
2. on measures required to complete the formation of the
customs union or free-trade area.
2. if necessary, provide for further review of the agreement
4. What must be done with respect to substantial changes in the plan
and schedule?
1. Members parties to an interim agreement shall notify substantial
changes in the plan and schedule included in that agreement to
the Council for Trade in Goods and,
2. if so requested, the Council shall examine the changes.
5. What if an interim agreement notified under paragraph 7(a) of
Article XXIV does not include a plan and schedule, contrary to
paragraph 5(c) of Article XXIV?
1. The working party shall in its report recommend such a plan and
schedule.
2. The parties shall not maintain or put into force, as the case may
be, such agreement if they are not prepared to modify it in
accordance with these recommendations.
3. Provision shall be made for subsequent review of the
implementation of the recommendations.
6. What are the reportorial requirements?
1. Customs unions and constituents of free-trade areas shall report
periodically to the Council for Trade in Goods,
2. Report on what?
1. on the operation of the relevant agreement
2. Any significant changes and/or developments in the
agreements, as they occur
3. What is the basis of this requirement?
1. As envisaged by the CONTRACTING PARTIES to GATT
1947
2. in their instruction to the GATT 1947 Council concerning
reports on regional agreements (BISD 18S/38)
5. Dispute Settlement
Page !14 of !47
1. When may the provisions of Articles XXII and XXIII of GATT 1994 as
elaborated and applied by the Dispute Settlement Understanding be
invoked?
1. With respect to any matters arising from the application of those
provisions of Article XXIV
1. relating to customs unions, free-trade areas or interim
agreements leading to the formation of a customs union or
free-trade area
6. Article XXIV:12
1. What are the duties of Each Member?
1. fully responsible under GATT 1994 for the observance of all
provisions of GATT 1994, and
2. shall take such reasonable measures as may be available to it to
ensure such observance by regional and local governments and
authorities within its territory
2. When may the provisions of Articles XXII and XXIII of GATT 1994 as
elaborated and applied by the Dispute Settlement Understanding be
invoked?
1. In respect of measures affecting its observance taken by
regional or local governments or authorities within the territory
of a Member.
3. What must be done when the Dispute Settlement Body has ruled that
a provision of GATT 1994 has not been observed?
1. The responsible Member shall take such reasonable measures
as may be available to it to ensure its observance.
4. When do the provisions relating to compensation and suspension of
concessions or other obligations apply?
1. In cases where it has not been possible to secure such
observance
5. What does each Member undertake to do?
1. accord sympathetic consideration to and
2. afford adequate opportunity for consultation regarding
1. any representations made by another Member
2. concerning measures affecting the operation of GATT 1994
3. taken within the territory of the former
F. GATS Article V
 in accordance with the level of development of the
Article V countries concerned,
Economic Integration - both overall and in individual sectors and subsectors.
1. This Agreement shall not prevent any of its Members from
(1) being a party to or (b) Notwithstanding paragraph 6,
(2) entering into in the case of an agreement of the type referred to in paragraph 1
an agreement liberalizing trade in services involving only developing countries,
between or among the parties to such an agreement, more favourable treatment may be granted to
provided that such an agreement: juridical persons owned or controlled by natural persons
(a) has substantial sectoral coverage, and of the parties to such an agreement.
(b) provides for the absence or elimination of substantially all
discrimination, 4. Any agreement referred to in paragraph 1
in the sense of Article XVII, shall be designed to facilitate trade between the parties to the
between or among the parties, agreement and
in the sectors covered under subparagraph (a), shall NOT
through: - in respect of any Member outside the agreement
(i) elimination of existing discriminatory raise the overall level of barriers to trade in services
measures, and/or within the respective sectors or subsectors
(ii) p r o h i b i t i o n o f n e w o r m o r e compared to the level applicable
discriminatory measures, prior to such an agreement.
either
- at the entry into force of that agreement or 5. If,
- on the basis of a reasonable time-frame, - in the conclusion,
except for measures permitted under Articles XI, XII, XIV and XIV enlargement or any significant modification of any agreement under
bis. paragraph 1,
- a Member intends to withdraw or modify a specific commitment
2. In evaluating whether the conditions under paragraph 1(b) are met, - inconsistently with the terms and conditions set out in its Schedule,
consideration may be given it shall provide at least 90 days advance notice of such
to the relationship of the agreement modification or withdrawal and
to a wider process of economic integration or trade liberalization the procedure set forth in paragraphs 2, 3 and 4 of Article XXI shall
among the countries concerned. apply.
3.
(a) Where developing countries are parties to an agreement 6. A service supplier of any other Member
of the type referred to in paragraph 1, that is a juridical person
- flexibility shall be provided for regarding the conditions constituted under the laws of a party to
set out in paragraph 1, an agreement referred to in paragraph 1
- particularly with reference to subparagraph (b) thereof, - shall be entitled to treatment granted under such agreement,
Page !15 of !47
 provided that it engages in substantive business operations from such agreement.
in the territory of the parties to such agreement.

7.
(a) Members which are parties to any agreement referred to in paragraph
1
shall promptly notify
- any such agreement and any enlargement or
- any significant modification of that agreement
to the Council for Trade in Services.

They shall also make available to the Council

such relevant information
as may be requested by it.

The Council may establish a working party

- to examine such an agreement or enlargement or modification of
that agreement and
- to report to the Council on its consistency with this Article.

(b) Members which are parties to any agreement referred to in paragraph

1
- which is implemented on the basis of a time-frame
shall report periodically to the Council for Trade in Services on its
implementation.

The Council may establish a working party to examine such reports

if it deems such a working party necessary.

(c) Based on the reports of the working parties referred to in

subparagraphs (a) and (b),
the Council may make recommendations to the parties
as it deems appropriate.

8. A Member which is a party to any agreement referred to in paragraph 1

may not seek compensation for trade benefits
that may accrue to any other Member

Page !16 of !47

 G. Differential and More Favourable Treatment, Reciprocity and - on products imported from one another;
Fuller Participation of Developing Countries (Decision of 28 - in accordance with criteria or conditions which may be
November 1979 (L/4903)), also known as the Enabling Clause prescribed by the CONTRACTING PARTIES,

Following negotiations within the framework of the Multilateral Trade (d) Special treatment on the least developed among the developing
Negotiations, the CONTRACTING PARTIES decide as follows: countries
1. Notwithstanding the provisions of Article I of the General Agreement, - in the context of any general or specific measures
contracting parties may accord - in favour of developing countries.
differential and more favourable treatment to developing
countries4 , 3. Any differential and more favourable treatment provided under this
without according such treatment to other contracting parties. clause:
(a) shall be designed
2. The provisions of paragraph 1 apply to the following5: to facilitate and promote the trade of developing countries and
(a) Preferential tariff treatment not to
- accorded by developed contracting parties (a) raise barriers to or
- to products originating in developing countries (b) create undue difficulties for
- in accordance with the Generalized System of Preferences6, - the trade of any other contracting parties;
(b) Differential and more favourable treatment (b) shall not constitute an impediment to
- with respect to the provisions of the General Agreement (1) the reduction or elimination of tariffs and
- concerning non-tariff measures (2) other restrictions to trade on a most-favoured-nation basis;
- governed by the provisions of instruments
- multilaterally negotiated (c) in the case of such treatment accorded by developed contracting
- under the auspices of the GATT; parties to developing countries
shall be
(c) Regional or global arrangements entered into (a) designed and,
- amongst less-developed contracting parties (b) if necessary, modified,
for the mutual reduction or elimination of tariffs and, - to respond positively to the development, financial and trade
for the mutual reduction or elimination of non-tariff needs of developing countries.
measures,

4 The words "developing countries" as used in this text are to be understood to refer also to developing territories.
5 It would remain open for the CONTRACTING PARTIES to consider on an ad hoc basis under the GATT provisions for joint action any proposals for differential and more
favourable treatment not falling within the scope of this paragraph.
6 Asdescribed in the Decision of the CONTRACTING PARTIES of 25 June 1971, relating to the establishment of "generalized, non-reciprocal and non discriminatory preferences
beneficial to the developing countries" (BISD 18S/24).
Page !17 of !47
4. Any contracting party
- taking action to introduce an arrangement pursuant to paragraphs 1, 2
and 3 above or
- subsequently taking action to introduce modification or withdrawal
of the differential and more favourable treatment so provided
- shall:7
(a)
- notify the CONTRACTING PARTIES and
- furnish them with all the information they may deem appropriate
relating to such action;
(b) afford adequate opportunity for prompt consultations
- at the request of any interested contracting party
- with respect to any difficulty or matter that may arise.
The CONTRACTING PARTIES shall,
if requested to do so by such contracting party,
consult with all contracting parties concerned with respect to the matter
with a view to reaching solutions satisfactory to all such contracting parties.
- the particular development, financial and trade needs of the least-developed
countries,
the developed countries shall exercise the utmost restraint
in seeking any concessions or contributions for commitments made by them
to reduce or remove tariffs and other barriers to the trade of such countries,
and the least-developed countries shall not be expected
to make concessions or contributions
that are inconsistent with the recognition of their particular situation and
problems.
7.
- The concessions and contributions made and
- the obligations assumed
by developed and less-developed contracting parties
under the provisions of the General Agreement
should promote the basic objectives of the Agreement,
including those embodied in the Preamble and in Article XXXVI.

5. The developed countries Less-developed contracting parties expect that their capacity to
- do not expect reciprocity - make contributions or negotiated concessions or
- for commitments made by them - take other mutually agreed action
- in trade negotiations to reduce or remove tariffs and other barriers under the provisions and procedures of the General Agreement
- to the trade of developing countries, would improve with
i.e., the developed countries do not expect the developing countries, - the progressive development of their economies and
- in the course of trade negotiations, - improvement in their trade situation and
to make contributions which are inconsistent with their individual they would accordingly expect to participate more fully
development, financial and trade needs. in the framework of rights and obligations
- Developed contracting parties shall therefore not seek, under the General Agreement.
- neither shall less-developed contracting parties be required to make,
concessions that are inconsistent with the latter's development, financial 8. Particular account shall be taken
and trade needs. of the serious difficulty
of the least-developed countries
6. Having regard to in making concessions and contributions
- the special economic difficulties and in view of

7 Nothing in these provisions shall affect the rights of contracting parties under the General Agreement.
Page !18 of !47
 - their special economic situation and
- their development, financial and trade needs.

9. The contracting parties will collaborate in arrangements

for review of the operation of these provisions,
bearing in mind
the need for individual and joint efforts
by contracting parties to meet
- the development needs of developing countries and
- the objectives of the General Agreement.

Page !19 of !47

The Asean Declaration (Bangkok Declaration) Bangkok, 8 August 1967
AFFIRMING that all foreign bases
- The Presidium Minister for Political Affairs/ Minister for Foreign Affairs - are temporary and remain only with the expressed concurrence of the
of Indonesia, countries concerned and
- the Deputy Prime Minister of Malaysia, - are not intended to be used directly or indirectly to
- the Secretary of Foreign Affairs of the Philippines, subvert the national independence and freedom of States in the area or
- the Minister for Foreign Affairs of Singapore and prejudice the orderly processes of their national development;
- the Minister of Foreign Affairs of Thailand:
DO HEREBY DECLARE:
- MINDFUL of the existence of mutual interests and common problems
among countries of South-East Asia and FIRST, the establishment of an Association for Regional Cooperation among
- convinced of the need to strengthen further the countries of South-East Asia to be known as the Association of South-East
the existing bonds of regional solidarity and cooperation; Asian Nations (ASEAN).
SECOND, that the aims and purposes of the Association shall be:
DESIRING to
- establish a firm foundation for common action 1. To COLLABORATE more effectively for
to promote regional cooperation in South-East Asia the greater utilization of their agriculture and industries,
in the spirit of equality and partnership and the expansion of their trade,
- thereby contribute towards peace, progress and prosperity in the region; - including the study of the problems of international commodity trade,
the improvement of their transportation and communications facilities
CONSCIOUS that in an increasingly interdependent world, and
the cherished ideals of peace, freedom, social justice and economic well-being the raising of the living standards of their peoples;
are best attained by fostering
- good understanding, 2. To ACCELERATE
- good neighbourliness and - the economic growth, social progress and cultural development in the
- meaningful cooperation region
among the countries of the region - through joint endeavours in the spirit of equality and partnership
already bound together by ties of history and culture; - in order to strengthen the foundation for a prosperous and peaceful
community of South-East Asian Nations;
CONSIDERING
that the countries of SouthEast Asia share a primary responsibility for - 3. To
- strengthening the economic and social stability of the region and - MAINTAIN close and beneficial cooperation
- ensuring their peaceful and progressive national development, and with existing international and regional organizations
that they are determined to ensure their stability and security with similar aims and purposes, and
- from external interference in any form or manifestation - explore all avenues for even closer cooperation among themselves.
- in order to preserve their national identities
- in accordance with the ideals and aspirations of their peoples; 4. To PROVIDE ASSISTANCE to each other

Page !20 of !47

in the form of training and research facilities to all States in the South-East Asian Region
in the educational, professional, technical and administrative spheres; subscribing to the aforementioned aims, principles and purposes.

5. To PROMOTE FIFTH, that the Association represents the collective will of the nations of
1. regional peace and stability through South-East Asia to
abiding respect for justice and the rule of law in the relationship - bind themselves together in friendship and cooperation and,
among countries of the region and - through joint efforts and sacrifices, secure for their peoples and for
adherence to the principles of the United Nations Charter; posterity the blessings of peace, freedom and prosperity.
2. active collaboration and mutual assistance on matters of common
interest DONE in Bangkok on the Eighth Day of August in the Year One Thousand
in the economic, social, cultural, technical, scientific and Nine Hundred and Sixty-Seven.
administrative fields;
3. South-East Asian studies

THIRD, that to carry out these aims and purposes, the following machinery
shall be established:
(a) Annual Meeting of Foreign Ministers,
which shall be by rotation and referred to as ASEAN Ministerial
Meeting. Special Meetings of Foreign Ministers may be convened as
required.

(b) A Standing committee,

under the chairmanship of the Foreign Minister of the host country or his
representative and
having as its members the accredited Ambassadors of the other member
countries,
- to carry on the work of the Association in between Meetings of
Foreign Ministers.

(c) Ad-Hoc Committees and Permanent Committees of specialists and

officials on specific subjects.
(d) A National Secretariat in each member country
- to carry out the work of the Association on behalf of that country and
- to service the Annual or Special Meetings of Foreign Ministers, the
Standing Committee and such other committees as may hereafter be
established.

FOURTH, that the Association is open for participation

Page !21 of !47
From Settlements to SEA to Regionalism - To save succeeding generations from the scourge of war
- To reaffirm faith in fundamental human rights, equality of rights of
I. Pre-Colonial Political Units in SEA men and women and of nations large and small
Patchwork but continuous, scattered settlements - scatteredness not - To unite the strength to maintain intl peace and security
due to language communication UN Charter provisions for regional arrangements [basis for regional
Cultural features for developing relationships in SEA arrangements in SEA]
- Social Organization - Art. 52
Cognatic kinship - Art. 53
- mode of social relations - Art. 54
- disregarding generational lines (men and women could inherit - Why is there a tendency towards regionalism in SEA?
equally) Motivation of group survival
- emphasis on personal accomplishments, superior attributes and Need to manage difficult problems for sheer survival
personal loyalty Increase in quality of life
- No fixed boundaries, no rules of succession, no bureaucratic sturcture Establishment of political stability
- Economic Development (fairly extensive trade relations, wet rice Increase of economic capabilities
culture, iron technology) + Complex Political Systems Establishment of harmonious relations with neighboring states through
cooperation
II. SEA as a concept achievement of regional peace and security
All economic, social and political intrastate exchanges were ongoing maintenance of intl peace and security
before colonial powers arrived.
Colonial powers brought in territorial boundaries A. Definition of Concepts
- effect: redistribution of people and development of new areas 1. Regionalism
US made studies on social, economic, political problems of Southeast a) Thought or theory that underlies the behavior of states
Asia and the titles would refer to the region as Southeast Asia; an - to group themselves together or
Indian writer, Roosevelt and Churchill started to use it as well Lord - to be identified by an outsider to behave as such,
Mountbatten was the Supreme Allied Commander of the South East Asia
Command - to defeat the Japanese (Second World War)
for the common good
Boundaries of the region changed over the years and throughout the 2. Region
wars
a) an analytic concept created by the selection of features
relevant
III. The Concept of and Experiences in International Organizations (IOs)
(1) to the interest of the student or
- IO: product of history of international cooperation among states, mostly for (2) to the problem at hand
peace and conflict resolution
- Concept of internationalism includes intl cooperation, intl law, intl b) applies to
pursuit of peace, supranational world govt (1) area under consideration
- Kant (universal and perpetual peace through world government) > (2) number and kind of phenomena which will be included
League of Nations > UN (June 26, 1945) c) not strictly a geographic entity but is composed of countries
which are drawn together due to similarity of interests
UNs initial objectives: [peace-building, peace-keeping, peace-making]
Page !22 of !47
 (1) What holds them together is the political will to C. Asia-Pacific Union (July 4, 1949)
cooperate in a rational way, rather than engage in D. Baguio Conference (May 26 - 30, 1950)
destructive competition. E. SEA Treaty Organization (September 1954)
d) Note: region is homogeneous only in terms of the applied F. Asian-African Conference (Bandung Conference, April 18 - 24,
criteria 1955)
(1) homogeneity implies similarity rather than identity G. Association of SEA (July 31, 1961)
(because units are hardly ever identical) H. MAPHILINDO (August 5, 1963)
3. Regional Association
a) an arrangement Formation of ASEAN
(1) wherein several states group themselves together I. Bangkok Declaration of 1967
(2) to engage in mutual cooperation II. ASEAN From 6 to 10
(3) for the attainment of some common good III. Organizational Structure
b) Structure varies A. ASEAN Heads of Government
(1) from flexibility and preservation of the members B. ASEAN Ministerial Meeting
sovereignty to the transfer of some aspects of sovereignty C. ASEAN Economic Ministers
to a central structure or supranational body D. Sectoral Ministers Meeting
(2) from accommodation of heterogeneous value systems to E. Other Non-Economic ASEAN Ministerial Meetings
legalistic prescriptions of behavior/code of conduct
F. Joint Ministerial Meeting
G. Secretary-General of ASEAN
4. Peace
H. ASEAN Standing Committee
a) a situation or condition
I. Senior Officials Meeting
(1) where parts of a unit or social organization
J. Senior Economic Officials Meeting
(2) are in harmonious relationships
K. Other ASEAN Senior Officials Meeting
(3) over a reasonable period of time
L. Joint Consultative Meeting
b) A definition may not be made by stating what is absent, but
M. ASEAN National Secretariats
by stating the conditions that are present by which the thing
is defined N. ASEAN Committees in Third Countries
O. ASEAN Secretariat
5. Cooperation
a) act of working together
(1) by certain units
(2) toward a common end

IV. Development of Regional Organizations in Asia

A. The Asian Relations Conference (March 28 - April 2, 1947, New
Delhi)
B. New Delhi Conference (January 20, 1949)

Page !23 of !47

Agreement on the Common Effective Preferential Tariff Scheme for the 1. in the Agreement on ASEAN PTA signed in Manila on 24
ASEAN Free Trade Area (1992) February 1977, and
2. in the Protocol on Improvements on Extension of Tariff
Article I Definitions Preferences under the ASEAN Preferential Trading Arrangements
1. CEPT (PTA), signed in Manila on 15 December 1987
an agreed effective tariff
- preferential to ASEAN 6. Exclusion List
to be applied to goods originating from ASEAN Member States 1. list containing products that are excluded
and 2. from the extension of tariff preferences under the CEPT Scheme
which have been identified for inclusion in the CEPT Scheme
- in accordance with Articles 2(5) and 3 7. Agricultural Products
1.
2. Non-Tariff Barriers 1. agricultural raw materials/unprocessed products
measures other than tariffs 1. covered under Chapters 1-24 of the Harmonised System
- which effectively prohibit or restrict import or export products (HS), and
- within Member States 2. similar agricultural raw materials/unprocessed products
1. in other related HS Headings; and
3. Quantitative Restrictions 2. products which have undergone simple processing
1. Prohibitions or restrictions on trade 1. with minimal change in form from the original products
2. with other Member States
1. whether made effective through Article II General Provisions
1. quotas,
2. licenses, 1. All Member States shall participate in the CEPT Scheme.
3. other measures with equivalent effect,
1. including administrative measures and requirements 2. Identification of products to be included in the CEPT Scheme shall be
which restrict trade. on a sectoral basis, i.e., at HS 6-digit level.

4. Foreign Exchange Restrictions 3. Exclusions at the HS 8/9 digit level for specific products are permitted for
1. measures taken by Member States those Member States, which are temporarily not ready to include such
2. in the form of products in the CEPT Scheme.
1. restrictions and
2. other administrative procedures in foreign exchange For specific products,
3. which have the effect of restricting trade - which are sensitive to a Member State,
- pursuant to Article 1 (3) of the Framework Agreement on
5. Preferential Trading Arrangements Enhancing ASEAN Economic Cooperation,
1. stipulated a Member State may exclude products from the CEPT Scheme,

Page !24 of !47

 subject to a waiver of any concession herein provided for such 6. All products under the PTA
products. - which are not transferred to the CEPT Scheme [in the list for tariff
reductions of the CEPT scheme ]
A review of this Agreement shall be carried out in the eighth year - shall continue to enjoy the MOP
to decide on the final Exclusion List or any amendment to this - existing as at 31 December 1992.
Agreement.
7. Member States,
[AMENDMENT! 1995] - whose tariffs for the agreed products are reduced from 20% and below to
3. x x x 0%-5%,
These temporarily excluded products - even though granted on an MFN basis,
are to be gradually included into the CEPT - shall still enjoy concessions.
by 1 January 2000. - Member States with tariff rates at MFN rates of 0%-5%
shall be deemed to have satisfied the obligations under this Agreement
4. A product shall be deemed to be originating from ASEAN Member and
States, shall also enjoy the concessions.
if at least 40% of its content originates from any Member State.
Article III Product Coverage
5. All manufactured products, including
- capital goods, and This Agreement shall apply to
- [AMENDMENT! 1995] processed agricultural products and - all manufactured products, including
- those products falling outside the definition of agricultural products, as set capital goods, and
out in this Agreement, processed agricultural products, and
shall be in the CEPT Scheme. - those products falling outside the definition of agricultural products as set
out in this Agreement.
- These products shall automatically be subject
- to the schedule of tariff reduction, Agricultural products shall be excluded from the CEPT Scheme.
- as set out in Article 4 of this Agreement. [as revised in Article 3 of this
Protocol] Article IV Schedule of Tariff Reduction

- In respect of PTA items, A. Schedule of Tariff Reduction

- the schedule of tariff reduction 1. Member States agree to the following schedule of effective preferential
provided for in [the revised] Article 4[(A) set out in Article 3 of this tariff reductions:
Protocol] of this Agreement
- shall be applied, (a) The reduction from existing tariff rates to 20% shall be done within a
taking into account the tariff rate time frame of 5 years to 8 years, from 1 January 1993,
after the application of the existing margin of preference (MOP) as at 3 1 subject to a programme of reduction to be decided by each Member
December 1992. State,

Page !25 of !47

 which shall be announced at the start of the programme.
Member States are encouraged to adopt an annual rate of reduction,
- which shall be (X-20)%/5 or 8,
- where X equals the existing tariff rates of individual Member States.
2.
(b) The subsequent reduction of tariff rates from 20% or below shall be done
within a time frame of 7 [5] 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 State shall be
announced at the start of the programme.
of Brunei Darussalam, Indonesia, Malaysia, Philippines, Singapore
and Thailand
shall be eliminated not later than 1 January 2010.
Import duties on products in the Inclusion Lists
of Cambodia, Lao PDR, Myanmar and Viet Nam
shall be eliminated not later than 1 January 2015,
with flexibility however allowed for import duties
on some sensitive products
to be eliminated not later than 1 January 2018.

(c) For products with existing tariff rates of 20% or below as at 1 January 3. The provisions of Articles 4(C)(1) and 4(C)(2) of the Agreement
1993, shall not apply to the list of products of Member States
Member States shall contained in Annexes 1 and 2 of the Protocol
- decide upon a programme of tariff reductions, and on the Special Arrangement for Sensitive and Highly Sensitive
- announce at the start, the schedule of tariff reductions. Products.
Two or more Member States may enter into
arrangements for tariff reduction to 0%-5% on specific products The tariff reduction schedule for these products
at an accelerated pace to be announced at the start of the programme. shall be governed by Article III of the Protocol
[The above schedules of tariff reduction on the Special Arrangement for Sensitive and Highly Sensitive Products.
shall not prevent Member States from
- immediately reducing their tariffs from 0%-5% or Article V Other Provisions
- following an accelerated schedule of tariff reduction]
A. Quantitative Restrictions and Non-Tariff Barriers
B. Enjoyment of Concessions
2. Subject to Articles 4 (1) (b) and 4 (1) (c) of this Agreement, products 1. Member States shall eliminate all quantitative restrictions
which reach, or are at tariff rates of 20% or below, shall automatically - in respect of products
enjoy the concessions. - under the CEPT Scheme
- upon enjoyment of the concessions
3. The above schedules of tariff reduction shall not prevent Member States - applicable to those products.
from
- immediately reducing their tariffs to 0%-5% or 2. Member States shall eliminate other non-tariff barriers
- following an accelerated schedule of tariff reduction. - on a gradual basis
- within a period of five years
[2003 AMENDMENT!] - after the enjoyment of concessions
C. Elimination of Import Duties - applicable to those products.
1. Import duties on products in the Inclusion Lists

Page !26 of !47

B. Foreign Exchange Restrictions in such a manner as to cause or threaten to cause serious injury
Member States shall make exceptions to their foreign exchange restrictions to sectors producing like or directly competitive products
relating to in the importing Member States,
- payments for the products under the CEPT Scheme, as well as the importing Member States may,
- repatriation of such payments to the extent and for such time as may be necessary
- without prejudice to their rights under to prevent or to remedy such injury,
- Article XVIII of the General Agreement on Tariff and Trade (GATT) suspend preferences
and - provisionally and
- relevant provisions of the Articles of Agreement of the International - without discrimination,
Monetary Fund (IMF). subject to Article 6 (3) of this Agreement.
Such suspension of preferences shall be consistent with the GATT.
C. Other Areas of Cooperation
Member States shall explore further measures 2. Without prejudice to existing international obligations,
on border and non-border areas of cooperation a Member State,
to supplement and complement the liberalisation of trade. which finds it necessary
to create or intensify
These may include, among others, - quantitative restrictions or
- the harmonisation of standards, - other measures limiting imports with a view to
- reciprocal recognition of tests and certification of products, - forestalling the threat of or
- removal of barriers to foreign investments, - stopping a serious decline of
- macroeconomic consultations, - its monetary reserves,
- rules for fair competition, and shall endeavour to do so in a manner,
- promotion of venture capital. which safeguards the value of the concessions agreed upon.

D. Maintenance of Concessions 3. Where emergency measures are taken pursuant to this Article,
Member States shall not nullify or impair - immediate notice of such action shall be given to the Council referred
- any of the concessions as agreed upon through the application of methods to in Article 7 of this Agreement, and
of customs valuation, - such action may be the subject of consultation as provided for in
- any new charges or measures restricting trade, Article 8 of this Agreement.
except in cases provided for in this Agreement.
Article VII Institutional Arrangements
Article VI Emergency Measures
1. The ASEAN Economic Ministers (AEM) shall,
1. If, for the purposes of this Agreement,
as a result of the implementation of this Agreement, establish a ministerial-level Council comprising
import of a particular product eligible under the CEPT Scheme is - one nominee from each Member State and
increasing - the Secretary- General of the ASEAN Secretariat.
Page !27 of !47
 The ASEAN Secretariat shall provide the support to the ministerial-
level Council for
- supervising, coordinating and reviewing the implementation of
this Agreement, and
- assisting the AEM in all matters relating thereto.
In the performance of its functions,
the ministerial-level Council shall also be supported
by the Senior Economic Officials Meeting (SEOM).
2. Member States which enter into bilateral arrangements on tariff
reductions
pursuant to Article 4 of this Agreement
shall notify all other Member States and the ASEAN Secretariat
of such arrangements.
which consider that any other Member State
has not carried out its obligations under this Agreement,
resulting in the nullifications or impairment
of any benefit accruing to them,
may,
with a view to achieving satisfactory adjustment of the matter,
make representations or proposal
to the other Member States concerned,
which shall give due consideration
to the representations or proposal made to it.
3. Any differences between the Member States
concerning the interpretation or application o f this Agreement shall,
as far as possible,
be settled amicably between the parties.

3. The ASEAN Secretariat shall monitor and report to the SEOM If such differences cannot be settled amicably,
on the implementation of the Agreement it shall be submitted
pursuant to the Article III (2) (8) of the Agreement - to the Council referred to in Article 7 of this Agreement, and
on the Establishment of the ASEAN Secretariat. - if necessary, to the AEM.
Member States shall cooperate with the ASEAN Secretariat Article IX General Exceptions
in the performance of its duties.
Nothing in this Agreement shall prevent any Member State
Article VIII Consultations from taking action and adopting
measures,
1. Member States shall accord adequate opportunity for consultations which it considers necessary for
regarding any representations made by other Member States - the protection of its national security,
with respect to any matter affecting the implementation of this - the protection of public morals,
Agreement. - the protection of human, animal or plant life and health, and
- the protection of articles of artistic, historic and archaeological value.
The Council referred to in Article 7 of this Agreement,
may seek guidance from the AEM Article IX-A Accession of New Members
in respect of any matter for which it has not been possible
to find a satisfactory solution during previous consultations. New Members of ASEAN shall accede to this Agreement
on terms and conditions,
2. Member States,
Page !28 of !47
- which are consistent with the Framework Agreement on Enhancing
ASEAN Economic Cooperation (1992) and the Agreement, and
- which have been agreed between them and the existing Members of
ASEAN.

Article X Final Provisions

1. The respective Governments of Member States shall undertake the

appropriate measures to fulfil the agreed obligations arising from this
Agreement.
2. Any amendment to this Agreement shall be made by consensus and shall
become effective upon acceptance by all Member States.
3. This Agreement shall be effective upon signing.
4. This Agreement shall be deposited with the Secretary-General of the
ASEAN Secretariat, who shall likewise promptly furnish a certified copy
thereof to each Member State.
5. No reservation shall be made with respect to any of the provisions of
this Agreement. In witness Whereof, the undersigned, being duly
authorised thereto by their respective Governments, have signed this
Agreement on Common Effective Preferential Tariff (CEPT) Scheme for
the Free Trade Area (AFTA).

This Protocol
- shall enter into force upon the deposit of instruments of ratification or
acceptance
- by all signatory governments with the Secretary-General of ASEAN
- which shall be done not later than 1 January 1996.
- shall be deposited with the Secretary-General of ASEAN,
- who shall promptly furnish a certified copy thereof to each Member
Country.

Page !29 of !47

ASEAN Charter
ADHERING to the principles of democracy, the rule of law and good
WE, THE PEOPLES of the Member States of the Association of Southeast governance, respect for and protection of human rights and fundamental
Asian Nations (ASEAN), as represented by the freedoms;
- Heads of State or Government of Brunei Darussalam,
- the Kingdom of Cambodia, RESOLVED to ensure sustainable development for the benefit of present and
- the Republic of Indonesia, future generations and to place the well-being, livelihood and welfare of the
- the Lao Peoples Democratic Republic, peoples at the centre of the ASEAN community building process;
- Malaysia,
- the Union of Myanmar, CONVINCED of the need to strengthen existing bonds of regional solidarity
- the Republic of the Philippines, to realise an ASEAN Community that is politically cohesive, economically
- the Republic of Singapore, integrated and socially responsible in order to effectively respond to current
- the Kingdom of Thailand and and future challenges and opportunities;
- the Socialist Republic of Viet Nam:
COMMITTED to intensifying community building through enhanced regional
cooperation and integration, in particular by establishing an ASEAN
NOTING with satisfaction the significant achievements and expansion of Community comprising the ASEAN Security Community, the ASEAN
ASEAN since its establishment in Bangkok through the promulgation of The Economic Community and the ASEAN Socio-Cultural Community, as
ASEAN Declaration; provided for in the Bali Declaration of ASEAN Concord II;
RECALLING the decisions to establish an ASEAN Charter in the Vientiane HEREBY DECIDE to establish, through this Charter, the legal and
Action Programme, the Kuala Lumpur Declaration on the Establishment of institutional framework for ASEAN,
the ASEAN Charter and the Cebu Declaration on the Blueprint of the ASEAN
Charter;
AND TO THIS END, the Heads of State or Government of the Member States
of ASEAN, assembled in Singapore on the historic occasion of the 40th
MINDFUL of the existence of mutual interests and interdependence among anniversary of the founding of ASEAN, have agreed to this Charter.
the peoples and Member States of ASEAN which are bound by geography,
common objectives and shared destiny;
CHAPTER I PURPOSES AND PRINCIPLES
INSPIRED by and united under One Vision, One Identity and One Caring and
Sharing Community; ARTICLE 1 PURPOSES

UNITED by a common desire and collective will to live in a region of lasting The Purposes of ASEAN are:
peace, security and stability, sustained economic growth, shared prosperity
and social progress, and to promote our vital interests, ideals and aspirations; 1. To
maintain and enhance peace, security and stability and
RESPECTING the fundamental importance of amity and cooperation, and the further strengthen peace-oriented values in the region;
principles of sovereignty, equality, territorial integrity, non-interference,
consensus and unity in diversity; 2. To enhance regional resilience
Page !30 of !47
- by promoting greater political, security, economic and socio-cultural
cooperation; 9. To promote sustainable development so as to ensure
- the protection of the regions environment,
3. To preserve Southeast Asia - the sustainability of its natural resources,
- as a Nuclear Weapon-Free Zone and - the preservation of its cultural heritage and the high quality of life of its
- free of all other weapons of mass destruction; peoples;

4. To ensure that the peoples and Member States of ASEAN live 10. To develop human resources
- in peace with the world at large through closer cooperation
- in a just, democratic and harmonious environment; - in education and life-long learning, and
- in science and technology,
5. To create a single market and production base for the empowerment of the peoples of ASEAN and
- which is stable, prosperous, highly competitive and economically for the strengthening of the ASEAN Community;
integrated
- with effective facilitation for trade and investment 11. To enhance the well-being and livelihood of the peoples of ASEAN
- in which there is by providing them with equitable access to opportunities
free flow of goods, services and investment; for human development, social welfare and justice;
facilitated movement of business persons, professionals, talents and
labour; and 12. To strengthen cooperation
freer flow of capital; in building a safe, secure and drug-free environment
for the peoples of ASEAN;
6. To alleviate poverty and narrow the development gap within ASEAN
through mutual assistance and cooperation; 13. To promote a people-oriented ASEAN
in which all sectors of society are encouraged
7. To to participate in, and benefit from,
- strengthen democracy, the process of ASEAN integration and community building;
- enhance good governance and the rule of law, and to
- promote and protect human rights and fundamental freedoms, 14. To promote an ASEAN identity
with due regard to the rights and responsibilities of the Member States of through the fostering of greater awareness
ASEAN; of the diverse culture and heritage of the region; and

8. To respond effectively, 15. To maintain the centrality and proactive role of ASEAN
in accordance with the principle of comprehensive security, as the primary driving force in its relations and cooperation
to all forms of with its external partners in a regional architecture
- threats, that is open, transparent and inclusive.
- transnational crimes and
- transboundary challenges;
Page !31 of !47
ARTICLE 2 PRINCIPLES
1. In pursuit of the Purposes stated in Article 1,
ASEAN and its Member States
reaffirm and adhere to the fundamental principles
contained in the
- declarations,
- agreements,
- conventions,
- concords,
- treaties and
- other instruments of ASEAN.
2. ASEAN and its Member States shall act in accordance with the following
Principles:
(a) respect for the independence, sovereignty, equality, territorial integrity
and national identity of all ASEAN Member States;
(b) shared commitment and collective responsibility in enhancing regional
peace, security and prosperity;
(c) renunciation of aggression and of the threat or use of force or other
actions in any manner inconsistent with international law;
(d) reliance on peaceful settlement of disputes;
(e) non-interference in the internal affairs of ASEAN Member States;
(f) respect for the right of every Member State to lead its national existence
free from external interference, subversion and coercion;
(g) enhanced consultations on matters seriously affecting the common
interest of ASEAN;
(h) adherence to the rule of law, good governance, the principles of
democracy and constitutional government;
Page !32 of !47
(i) respect for fundamental freedoms, the promotion and protection of
human rights, and the promotion of social justice;
(j) upholding the United Nations Charter and international law, including
international humanitarian law, subscribed to by ASEAN Member States;
(k) abstention from participation in any policy or activity, including the
use of its territory, pursued by any ASEAN Member State or non-ASEAN
State or any non-State actor, which threatens the sovereignty, territorial
integrity or political and economic stability of ASEAN Member States;
(l) respect for the different cultures, languages and religions of the peoples
of ASEAN, while emphasising their common values in the spirit of unity
in diversity;
(m) the centrality of ASEAN in external political, economic, social and
cultural relations while remaining actively engaged, outward-looking,
inclusive and non-discriminatory; and
(n) adherence to multilateral trade rules and ASEANs rules-based
regimes for effective implementation of economic commitments and
progressive reduction towards elimination of all barriers to regional
economic integration, in a market-driven economy.
CHAPTER II LEGAL PERSONALITY
ARTICLE 3 LEGAL PERSONALITY OF ASEAN
ASEAN, as an inter-governmental organisation, is hereby conferred legal
personality.
CHAPTER III MEMBERSHIP
ARTICLE 4 MEMBER STATES
The Member States of ASEAN are
- Brunei Darussalam,
- the Kingdom of Cambodia,
- the Republic of Indonesia,
- the Lao Peoples Democratic Republic, CHAPTER IV ORGANS
- Malaysia, ARTICLE 7 ASEAN SUMMIT
- the Union of Myanmar,
- the Republic of the Philippines, 1. The ASEAN Summit shall comprise the Heads of State or Government
- the Republic of Singapore, of the Member States.
- the Kingdom of Thailand and
- the Socialist Republic of Viet Nam. 2. The ASEAN Summit shall:
(a) be the supreme policy-making body of ASEAN;
ARTICLE 5 RIGHTS AND OBLIGATIONS
1. Member States shall have equal rights and obligations under this (b) deliberate, provide policy guidance and take decisions on
Charter. key issues pertaining to the realisation of the objectives of ASEAN,
important matters of interest to Member States and
2. Member States shall take all necessary measures, all issues referred to it by
including the enactment of appropriate domestic legislation, - the ASEAN Coordinating Council,
to effectively implement the provisions of this Charter and - the ASEAN Community Councils and
to comply with all obligations of membership. - ASEAN Sectoral Ministerial Bodies;

3. In the case of a serious breach of the Charter or noncompliance, (c) instruct the relevant Ministers in each of the Councils concerned to
the matter shall be referred to Article 20. hold ad hoc inter-Ministerial meetings, and
address important issues concerning ASEAN that cut across the
ARTICLE 6 ADMISSION OF NEW MEMBERS Community Councils.

1. The procedure for application and admission to ASEAN shall be Rules of procedure for such meetings
prescribed by the ASEAN Coordinating Council. shall be adopted by the ASEAN Coordinating Council;
2. Admission shall be based on the following criteria: (d) address emergency situations affecting ASEAN by taking appropriate
(a) location in the recognised geographical region of Southeast Asia; actions;
(b) recognition by all ASEAN Member States;
(c) agreement to be bound and to abide by the Charter; and (e) decide on matters referred to it under Chapters VII and VIII;
(d) ability and willingness to carry out the obligations of Membership.
(f) authorise the establishment and the dissolution of Sectoral
3. Admission shall be decided by consensus by the ASEAN Summit, Ministerial Bodies and other ASEAN institutions; and
upon the recommendation of the ASEAN Coordinating Council.
(g) appoint the Secretary-General of ASEAN,
4. An applicant State shall be admitted to ASEAN with the rank and status of Minister,
upon signing an Instrument of Accession to the Charter. who will serve

Page !33 of !47

 with the confidence and at the pleasure of the Heads of State or
Government
upon the recommendation of the ASEAN Foreign Ministers Meeting.
3. ASEAN Summit Meetings shall be:
(a) held twice annually, and
be hosted by the Member State holding the ASEAN Chairmanship;
and
(b) convened, whenever necessary, as special or ad hoc meetings to be
chaired by the Member State holding the ASEAN Chairmanship, at
venues to be agreed upon by ASEAN Member States.
ARTICLE 8 ASEAN COORDINATING COUNCIL
1. The ASEAN Coordinating Council shall comprise the ASEAN Foreign
Ministers and meet at least twice a year.
2. The ASEAN Coordinating Council shall:
(a) prepare the meetings of the ASEAN Summit;
(b) coordinate
(b) the implementation of agreements and decisions of the ASEAN
Summit;
(c) with the ASEAN Community Councils to enhance policy
coherence, efficiency and cooperation among them;
(d) the reports of the ASEAN Community Councils to the ASEAN
Summit;
(e) consider
(e) the annual report of the Secretary-General on the work of
ASEAN;
(f) the report of the Secretary-General on the functions and
operations of the ASEAN Secretariat and other relevant bodies;
(f) approve the appointment and termination of the Deputy Secretaries-
General upon the recommendation of the Secretary-General; and
(g) undertake other tasks provided for in this Charter or such other
functions as may be assigned by the ASEAN Summit.
3. The ASEAN Coordinating Council shall be supported by the relevant
senior officials.
Page !34 of !47
ARTICLE 9 ASEAN COMMUNITY COUNCILS
1. The ASEAN Community Councils shall comprise the
- ASEAN Political-Security Community Council,
- ASEAN Economic Community Council, and
- ASEAN Socio-Cultural Community Council.
2. Each ASEAN Community Council shall have under its purview the
relevant ASEAN Sectoral Ministerial Bodies.
3. Each Member State shall designate its national representation for each
ASEAN Community Council meeting.
4. In order to realise the objectives of each of the three pillars of the ASEAN
Community, each ASEAN Community Council shall:
(a) ensure the implementation of the relevant decisions of the ASEAN
Summit;
(b) coordinate the work of the different sectors under its purview, and on
issues which cut across the other Community Councils; and
(c) submit reports and recommendations to the ASEAN Summit on
matters under its purview.
5. Each ASEAN Community Council
- shall meet at least twice a year and
- shall be chaired by the appropriate Minister from the Member State holding
the ASEAN Chairmanship.
6. Each ASEAN Community Council shall be supported by the relevant
senior officials.
ARTICLE 10 ASEAN SECTORAL MINISTERIAL BODIES
1. ASEAN Sectoral Ministerial Bodies shall: (a) function in accordance
with their respective established mandates; (b) implement the agreements
and decisions of the ASEAN Summit under their respective purview; (c)
strengthen cooperation in their respective fields in support of ASEAN
integration and community building; and (d) submit reports and
recommendations to their respective Community Councils.
2. Each ASEAN Sectoral Ministerial Body may have under its purview the (d)
relevant senior officials and subsidiary bodies to undertake its functions - present the views of ASEAN and
as contained in Annex 1. The Annex may be updated by the Secretary- - participate in meetings with external parties
General of ASEAN upon the recommendation of the Committee of in accordance with approved policy guidelines and mandate given
Permanent Representatives without recourse to the provision on to the Secretary-General; and
Amendments under this Charter.
(e) recommend the appointment and termination of the Deputy
ARTICLE 11 SECRETARY-GENERAL OF ASEAN AND Secretaries-General to the ASEAN Coordinating Council for
ASEAN SECRETARIAT approval.

1. The Secretary-General of ASEAN shall be 3. The Secretary-General shall also be the Chief Administrative Officer of
- appointed by the ASEAN Summit for a non-renewable term of office of ASEAN.
five years,
- selected from among nationals of the ASEAN Member States based on 4. The Secretary-General shall be assisted by four Deputy Secretaries-
alphabetical rotation, General with the rank and status of Deputy Ministers. The Deputy
with due consideration to Secretaries-General shall be accountable to the Secretary-General in
- integrity, carrying out their functions.
- capability and professional experience, and
- gender equality. 5. The four Deputy Secretaries-General
shall be of different nationalities from the Secretary-General and
2. The Secretary-General shall: shall come from four different ASEAN Member States.
(a) carry out the duties and responsibilities of this high office in
accordance with the provisions of this Charter and relevant ASEAN 6. The four Deputy Secretaries-General shall comprise:
instruments, protocols and established practices; (a) two Deputy Secretaries-General
- who will serve a non-renewable term of three years,
(b) - selected from among nationals of the ASEAN Member States based
- facilitate and monitor progress in the implementation of ASEAN on alphabetical rotation,
agreements and decisions, and - with due consideration to integrity, qualifications, competence,
- submit an annual report on the work of ASEAN to the ASEAN experience and gender equality; and
Summit; (b) two Deputy Secretaries-General
- who will serve a term of three years,
(c) participate in meetings of - which may be renewed for another three years.
- the ASEAN Summit, - These two Deputy Secretaries-General shall be openly recruited based
- the ASEAN Community Councils, on merit.
- the ASEAN Coordinating Council, and
- ASEAN Sectoral Ministerial Bodies and 7. The ASEAN Secretariat shall comprise
- other relevant ASEAN meetings; the Secretary-General and
Page !35 of !47
 such staff as may be required. (d) coordinate and support the national preparations of ASEAN meetings;
(e) promote ASEAN identity and awareness at the national level; and
8. The Secretary-General and the staff shall: (f) contribute to ASEAN community building.
(a) uphold the highest standards of integrity, efficiency, and competence
in the performance of their duties; ARTICLE 14 ASEAN HUMAN RIGHTS BODY
(b) not seek or receive instructions from any government or external 1. In conformity with the purposes and principles of the ASEAN Charter
party outside of ASEAN; and relating to the promotion and protection of human rights and
(c) refrain from any action which might reflect on their position as fundamental freedoms, ASEAN shall establish an ASEAN human rights
ASEAN Secretariat officials responsible only to ASEAN. body.
2. This ASEAN human rights body shall operate in accordance with the
9. Each ASEAN Member State undertakes terms of reference to be determined by the ASEAN Foreign Ministers
- to respect the exclusively ASEAN character of the responsibilities of Meeting.
the Secretary-General and the staff, and
- not to seek to influence them in the discharge of their responsibilities. ARTICLE 15 ASEAN FOUNDATION
1. The ASEAN Foundation shall
ARTICLE 12 COMMITTEE OF PERMANENT REPRESENTATIVES - support the Secretary-General of ASEAN and
TO ASEAN collaborate with the relevant ASEAN bodies
1. Each ASEAN Member State shall appoint a Permanent Representative to - to support ASEAN community building
ASEAN with the rank of Ambassador based in Jakarta. - by promoting
greater awareness of the ASEAN identity,
2. The Permanent Representatives collectively constitute a Committee of people-to-people interaction, and
Permanent Representatives, which shall: (a) support the work of the close collaboration among the business sector, civil society,
ASEAN Community Councils and ASEAN Sectoral Ministerial Bodies; academia and other stakeholders in ASEAN.
(b) coordinate with ASEAN National Secretariats and other ASEAN
Sectoral Ministerial Bodies; (c) liaise with the Secretary-General of 2. The ASEAN Foundation shall be accountable to the Secretary-General of
ASEAN and the ASEAN Secretariat on all subjects relevant to its work; ASEAN,
(d) facilitate ASEAN cooperation with external partners; and (e) perform - who shall submit its report to the ASEAN Summit through the
such other functions as may be determined by the ASEAN Coordinating ASEAN Coordinating Council.
Council.
CHAPTER V ENTITIES ASSOCIATED WITH ASEAN
ARTICLE 13 ASEAN NATIONAL SECRETARIATS
Each ASEAN Member State shall establish an ASEAN National Secretariat
ARTICLE 16 ENTITIES ASSOCIATED WITH ASEAN
which shall:
1. ASEAN may engage with entities which support the ASEAN Charter, in
particular its purposes and principles. These associated entities are listed
(a) serve as the national focal point; in Annex 2.
(b) be the repository of information on all ASEAN matters at the national 2. Rules of procedure and criteria for engagement shall be prescribed by the
level; Committee of Permanent Representatives upon the recommendation of
(c) coordinate the implementation of ASEAN decisions at the national level; the Secretary-General of ASEAN.
Page !36 of !47
3. Annex 2 may be updated by the Secretary-General of ASEAN upon the
recommendation of the Committee of Permanent Representatives without
recourse to the provision on Amendments under this Charter.
CHAPTER VI IMMUNITIES AND PRIVILEGES
ARTICLE 17 IMMUNITIES AND PRIVILEGES OF ASEAN
1. ASEAN shall enjoy in the territories of the Member States such
immunities and privileges as are necessary for the fulfilment of its
purposes.
2. The immunities and privileges shall be laid down in separate agreements
between ASEAN and the host Member State.
ARTICLE 18 IMMUNITIES AND PRIVILEGES OF THE
SECRETARY-GENERAL OF ASEAN AND STAFF OF
THE ASEAN SECRETARIAT
1. The Secretary-General of ASEAN and staff of the ASEAN Secretariat
participating in official ASEAN activities or representing ASEAN in the
Member States shall enjoy such immunities and privileges as are
necessary for the independent exercise of their functions.
2. The immunities and privileges under this Article shall be laid down in a
separate ASEAN agreement.
ARTICLE 19 IMMUNITIES AND PRIVILEGES OF THE
PERMANENT REPRESENTATIVES AND OFFICIALS
ON ASEAN DUTIES
1. The Permanent Representatives of the Member States to ASEAN and
officials of the Member States participating in official ASEAN activities
or representing ASEAN in the Member States shall enjoy such
immunities and privileges as are necessary for the exercise of their
functions.
2. The immunities and privileges of the Permanent Representatives and
officials on ASEAN duties shall be governed by the 1961 Vienna
Convention on Diplomatic Relations or in accordance with the national
law of the ASEAN Member State concerned.
Page !37 of !47
CHAPTER VII DECISION-MAKING
ARTICLE 20 CONSULTATION AND CONSENSUS
1. As a basic principle, decision-making in ASEAN shall be based on
consultation and consensus.
2. Where consensus cannot be achieved, the ASEAN Summit may decide
how a specific decision can be made.
3. Nothing in paragraphs 1 and 2 of this Article shall affect the modes of
decision-making as contained in the relevant ASEAN legal instruments.
4. In the case of a serious breach of the Charter or noncompliance, the
matter shall be referred to the ASEAN Summit for decision.
ARTICLE 21 IMPLEMENTATION AND PROCEDURE
1. Each ASEAN Community Council shall prescribe its own rules of
procedure.
2. In the implementation of economic commitments, a formula for flexible
participation, including the ASEAN Minus X formula, may be applied
where there is a consensus to do so.
CHAPTER VIII SETTLEMENT OF DISPUTES
ARTICLE 22 GENERAL PRINCIPLES
1. Member States shall endeavour to resolve peacefully all disputes in a
timely manner through dialogue, consultation and negotiation.
2. ASEAN shall maintain and establish dispute settlement mechanisms in all
fields of ASEAN cooperation.
ARTICLE 23 GOOD OFFICES, CONCILIATION AND MEDIATION
1. Member States which are parties to a dispute may at any time agree to
resort to good offices, conciliation or mediation in order to resolve the
dispute within an agreed time limit.
2. Parties to the dispute may request the Chairman of ASEAN or the
Secretary-General of ASEAN, acting in an ex-officio capacity, to provide
good offices, conciliation or mediation.
ARTICLE 24 DISPUTE SETTLEMENT MECHANISMS IN
SPECIFIC INSTRUMENTS
1. Disputes relating to specific ASEAN instruments shall be settled through
the mechanisms and procedures provided for in such instruments.
2. Disputes which do not concern the interpretation or application of any
ASEAN instrument shall be resolved peacefully in accordance with the
Treaty of Amity and Cooperation in Southeast Asia and its rules of
procedure.
3. Where not otherwise specifically provided, disputes which concern the
interpretation or application of ASEAN economic agreements shall be
settled in accordance with the ASEAN Protocol on Enhanced Dispute
Settlement Mechanism.
ARTICLE 28 UNITED NATIONS CHARTER PROVISIONS AND
OTHER RELEVANT INTERNATIONAL
PROCEDURES
Unless otherwise provided for in this Charter, Member States have the right of
recourse to the modes of peaceful settlement contained in
- Article 33(1) of the Charter of the United Nations or
- any other international legal instruments to which the disputing Member
States are parties.

ARTICLE 25 ESTABLISHMENT OF DISPUTE SETTLEMENT

MECHANISMS

Where not otherwise specifically provided, appropriate dispute settlement

mechanisms, including arbitration, shall be established for disputes which
concern the interpretation or application of this Charter and other
ASEAN instruments.

ARTICLE 26 UNRESOLVED DISPUTES

When a dispute remains unresolved, after the application of the preceding

provisions of this Chapter, this dispute shall be referred to the ASEAN
Summit, for its decision.

ARTICLE 27 COMPLIANCE

1. The Secretary-General of ASEAN, assisted by the ASEAN Secretariat or

any other designated ASEAN body, shall monitor the compliance with the
findings, recommendations or decisions resulting from an ASEAN
dispute settlement mechanism, and submit a report to the ASEAN
Summit.
2. Any Member State affected by non-compliance with the findings,
recommendations or decisions resulting from an ASEAN dispute
settlement mechanism, may refer the matter to the ASEAN Summit for a
decision.

Page !38 of !47

ASEAN ECONOMIC COMMUNITY BLUEPRINT
I. INTRODUCTION
1. Kuala Lumpur in December 1997 :The ASEAN Leaders at their Summit
decided to transform ASEAN into a stable, prosperous, and highly
competitive region with equitable economic development, and reduced
poverty an d socio-economic disparities (ASEAN Vision 2020).
2. Bali Summit in October 2003: ASEAN Leaders declared that the ASEAN
Economic Community (AEC) shall be the goal of regional economic
integration (Bali Concord II) by 2020. In addition to the AEC, the
ASEAN Security Community and the ASEAN Socio-Cultural
Community are the other two integral pillars of the envisaged ASEAN
Community. All the three pillars are expected to work in tandem in
establishing the ASEAN Community in 2020.
3. Kuala Lumpur in August 2006: Subsequently, the ASEAN Economic
Ministers Meeting (AEM) held, agreed to develop a single and
coherent blueprint for advancing the AEC by identifying the
characteristics and elements of the AEC by 2015 consistent with the Bali
Concord II with clear targets and timelines for implementation of
various measures as well as pre-agreed flexibilities to accommodate the
interests of all ASEAN Member Countries.
4. The 12th ASEAN Summit in January 2007: the Leaders affirmed their
strong commitment to accelerate the establishment of an ASEAN
Community by 2015 as envisioned in the ASEAN Vision 2020 and the
ASEAN Concord II, and signed the Cebu Declaration on the Acceleration
of the Establishment of an ASEAN Community by 2015. In particular, the
Leaders agreed to by 2015 and to transform ASEAN into a region with
free movement of goods, services, investment, skilled labour, and freer
flow of capital.
II. CHARACTERISTICS AND ELEMENTS OF AEC
5. The AEC is the realisation of the end goal of economic integration as
espoused in the Vision 2020, which is based on a convergence of interests
of ASEAN Member Countries to deepen and broaden economic
integration through existing and new initiatives with clear timelines.
In establishing the AEC, ASEAN shall act in accordance to the principles
Page !39 of !47
of an open, outward-looking, inclusive, and market-driven economy
consistent with multilateral rules as well as adherence to rules-based
systems for effective compliance and implementation of economic
commitments.
6. The AEC will establish ASEAN as a single market and production
base
making ASEAN more dynamic and competitive with new mechanisms
and measures to strengthen the implementation of its existing economic
initiatives;
accelerating regional integration in the priority sectors;
facilitating movement of business persons, skilled labour and talents;
and
strengthening the institutional mechanisms of ASEAN.
As a first step towards realising the ASEAN Economic Community,
ASEAN has been implementing the recommendations of the High
Level Task Force (HLTF) on ASEAN Economic Integration
contained in the Bali Concord II.
7. At the same time, the AEC will address the development divide and
accelerate integration of Cambodia, Lao PDR, Myanmar and Viet Nam
(CLMV) through the Initiative for ASEAN Integration and other regional
initiatives. Other areas of cooperation are also to be incorporated such as
- human resources development and capacity building;
- recognition of professional qualifications;
- closer consultation on macroeconomic and financial policies;
- trade financing measures;
- enhanced infrastructure and communications connectivity;
- development of electronic transactions through e-ASEAN;
- integrating industries across the region to promote regional sourcing; and
- enhancing private sector involvement for the building of the AEC.
8. Based on the above and taking into consideration the importance of
external trade to ASEAN and the need for the ASEAN Community as a
whole to remain outward looking, the AEC envisages the following key
characteristics:
(a) a single market and production base,
 (b) a highly competitive economic region,
(c) a region of equitable economic development, and
(d) a region fully integrated into the global economy.
These characteristics are inter-related and mutually reinforcing.
Incorporating the required elements of each characteristic in one
Blueprint shall ensure the consistency and coherence of these
elements as well as their implementation and proper coordination
among relevant stakeholders.
A. Single Market and Production Base
9. An ASEAN single market and production base shall comprise five core
elements:
(i) free flow of goods;
(ii) free flow of services;
(iii) free flow of investment;
(iv) freer flow of capital; and
(v) free flow of skilled labour.
In addition, the single market and production base also include two
important components, namely,
- the priority integration sectors, and
- food, agriculture and forestry.
A1. Free flow of goods
10. Free flow of goods is one of the principal means by which the aims of a
single market and production base can be achieved. A single market
for goods (and services) will also facilitate the development of
production networks in the region and enhance ASEANs capacity to
serve as a global production centre or as a part of the global supply
chain.
11. Through ASEAN Free Trade Area (AFTA), ASEAN has achieved
significant progress in the removal of tariffs.
- However, free flow of goods would require
not only zero tariffs but
but the removal of non-tariff barriers as well.
- In addition, another major component that would facilitate free flow of
goods is trade facilitation measures such as
Page !40 of !47
integrating customs procedures,
establishing the ASEAN Single Window,
continuously enhancing the Common Effective Preferential Tariffs
(CEPT) Rules of Origin including its Operational Certification
Procedures, and
harmonising standards and conformance procedures
12. The Common Effective Preferential Tariffs for ASEAN Free Trade Area
(CEPT-AFTA) Agreement will be reviewed and enhanced to become a
comprehensive agreement in realising free flow of goods and applicable
to ASEAN needs for accelerated economic integration towards 2015.
13. Elimination of Tariffs. Tariffs on all intra-ASEAN goods will be
eliminated in accordance with the schedules and commitments set out in
the CEPT-AFTA Agreement and other relevant Agreements/Protocols.
Actions:
i. Eliminate import duties on all products,
- except for those phased in from the Sensitive and Highly Sensitive Lists by
2010 for ASEAN-6 and by 2015,
- with flexibilities for some sensitive products by 2018,
for CLMV in accordance with the provisions of the Protocol to Amend
the CEPT Agreement for the Elimination of Import Duties;
ii. Eliminate import duties on products in the Priority Integration Sectors
by
2007 for ASEAN-6 and
2012 for CLMV
- in accordance with the provisions of the ASEAN Framework
(Amendment) Agreement for the Integration of Priority Sectors;
iii.
- Complete the phasing in of the remaining products in the Sensitive List
(SL) into the CEPT Scheme and
- reduce tariffs on these products to 0-5%
by 1 January 2010 for ASEAN-6,
1 January 2013 for Viet Nam,
1 January 2015 for Lao PDR and Myanmar, and
by 1 January 2017 for Cambodia,
 - in accordance with the provisions of the Protocol on Special
Arrangements for Sensitive and Highly Sensitive Products; and
iv. Phase in products, which are in the General Exceptions List, in
conformity with the CEPT Agreement.
14. Elimination of Non-Tariff Barriers. ASEAN has achieved significant
progress in tariff liberalisation. The main focus of ASEAN towards 2015
will be placed on the full elimination of non-tariff barriers (NTBs).
Actions:
i. Enhance transparency by
- abiding to the Protocol on Notification Procedure and
- setting up an effective Surveillance Mechanism;
ii. Abide by the commitment of a standstill and roll-back on NTBs;
iii. Remove all NTBs
- by 2010 for ASEAN-5,
- by 2012 for the Philippines, and
- by 2015 with flexibilities to 2018 for CLMV,
in accordance with the agreed Work Programme on Non- Tariff Barriers
(NTBs) elimination;
iv. Enhance transparency of Non-Tariff Measures (NTMs); and
v. Work towards where possible having regional rules and regulations
consistent with International best practices.
15. Rules of Origin (ROO): Putting in place ROO which are responsive to
the dynamic changes in global production processes so as to:
- facilitate trade and investment among ASEAN Member Countries;
- promote a regional production network;
- encourage development of SMEs and the narrowing of development gaps;
and
- promote the increased usage of the AFTA CEPT Scheme.
Page !41 of !47
Actions:
i. Continuously reform and enhance the CEPT ROO to respond to
changes in regional production processes, including making necessary
adjustments such as the introduction of advance rulings and
improvements to the ROO;
ii.
- Simplify the Operational Certification Procedures for the CEPT ROO and
- ensure its continuous enhancement, including the
introduction of facilitative processes such as the electronic processing of
certificates of origin, and
harmonisation or alignment of national procedures to the extent possible;
and
iii.
- Review all the ROO implemented by ASEAN Member Countries,
individually and collectively, and
- explore possible cumulation mechanisms, where possible.
16. Trade facilitation. Simple, harmonised and standardised trade and
customs, processes, procedures and related information flows are
expected to reduce transaction costs in ASEAN which will
- enhance export competitiveness and
- facilitate the integration of ASEAN into
a single market for goods, services and investments and
a single production base.
Actions:
i. Assess trade facilitation conditions in ASEAN;
ii. Develop and implement a comprehensive trade facilitation work
programme which aims at simplifying, harmonising and standardising
trade and customs, processes, procedures and related information flows;
iii. Promote transparency and visibility of all actions and interventions by
all stakeholders within international trade transactions;
iv. Establish a regional trade facilitation cooperation mechanism;
v. Establish ASEAN Trade Facilitation Repository;
vi. Develop national level measures to support and ensure effective
implementation of regional level initiatives; and
vii. Develop a comprehensive capacity building programmes to ensure
smooth implementation of the work programme.

17. Customs Integration. In light of the acceleration of AEC, the realisation
of ASEAN Customs Vision 2020 is brought forward to 2015. In
particular, the 2005-2010 Strategic Plan of Customs Development aims
to:
(a) integrate customs structures;
(b) modernise tariff classification, customs valuation and origin
determination and establish ASEAN e-Customs;
(c) smoothen customs clearance;
(d) strengthen human resources development;
(e) promote partnership with relevant international organisations;
(f) narrow the development gaps in customs; and
(g) adopt risk management techniques and audit-based control (PCA) for
trade facilitation.
Actions:
i. Modernise customs techniques,
- guided by simple and harmonised customs procedures and formalities
- in line with international standards and best practices
- through the implementation of regional models of processing of cargoes
and shipments (ASEAN Cargo Clearance and ASEAN Customs
Declaration Document in 2007);
ii. Establish ASEAN Customs Transit system to facilitate movement of
goods and means of transport;
iii. Establish ASEAN Customs systems dealing with special customs regimes
such as
- Temporary Admission,
- Outward Processing and
- Inward Processing
with the view to facilitate integration of production and supply chains;
iv. Adopt international standards and practices to secure
- a uniform system of tariff classification,
- a synchronised system of value assessment for customs purposes and
- a harmonised system of origin determination, and
Page !42 of !47
- information exchange where possible;
v. Implement ASEAN e-Customs; and
vi. Promote mutual assistance for better customs efficiency and
effectiveness.
18. ASEAN Single Window.
-
The implementation of measures of simplifying, harmonising and
standardising trade and customs, processes, procedures and
the application of ICT in all areas related to trade facilitation
- would be paramount in the ultimate creation of an ASEAN Single
Window.
- The ASEAN Single Window is an environment where ten National Single
Windows of individual Member Countries operate and integrate.
- National Single Window enables
a single submission of data and information,
a single and synchronous processing of data and information and
a single decision-making for customs clearance of cargo, which
- expedites the customs clearance,
- reduce transaction time and costs, and
- thus enhance trade efficiency and competitiveness.
Actions:
i. ASEAN-6 (Brunei Darussalam, Indonesia, Malaysia, Philippines,
Singapore and Thailand) shall operationalise their National Single
Windows by 2008 at the latest;
ii. ASEAN-4 (Cambodia, Lao PDR, Myanmar and Viet Nam) shall
operationalise their National Single Windows no later than 2012; and
iii.
- Standardisation of data elements based on WCO data model, the WCO data
set and United Nation Trade Data Elements Directory (UNTDED) and
- acceleration of introduction of information, communication and technology
(ICT) for digitalised processing and exchange.
19. Standards and Technical Barriers to Trade.
- Systems of standards, v. Strengthen post market surveillance systems to ensure the successful
- quality assurance, implementation of the harmonised technical regulations; and
- accreditation, and
- measurement are vi. Develop capacity building programmes to ensure smooth
crucial to promote greater efficiency and enhance cost effectiveness of implementation of the work programme.
production of intra-regional imports/exports.
- Standards,
- technical regulations and
- conformity assessment procedures
will be harmonised through the implementation of the ASEAN Policy
Guideline on Standards and Conformance, with
- greater transparency,
- improved quality of conformity assessment and
- active participation of the private sector.

Actions:
i. Harmonise standards, technical regulations and conformity assessment
procedures through their alignment with international practices, where
applicable; 8

ii. Develop and implement sectoral Mutual Recognition Arrangements

(MRAs) on Conformity Assessment for specific sectors identified in the
ASEAN Framework Agreement on Mutual Recognition Arrangements
(also see footnote 1);

iii. Enhance technical infrastructure and competency in laboratory testing,

calibration, inspection, certification and accreditation based on
regionally/internationally accepted procedures and guides;

iv. Promote transparency in the development and application of

standards, technical regulations and conformity assessment procedures in
line with the requirements of the World Trade Organisation (WTO)
Agreement on Technical Barriers to Trade and the ASEAN Policy
Guideline on Standards and Conformance;

8 Identification of standards, technical regulations and conformity assessment procedures to be harmonised or

for sectoral MRAs to be developed, must take into consideration the impact on ASEAN trade, the complexity
of the regulatory system, the technical infrastructure as well as the feedback from stakeholders.
Page !43 of !47
ASEAN ECONOMIC COMMUNITY BLUEPRINT 2025 The AEC Blueprint 2025 will build on the AEC Blueprint 2015
I. INTRODUCTION consisting of interrelated and mutually reinforcing characteristics,
1. The implementation of the ASEAN Economic Community (AEC) namely:
Blueprint 2015 has been substantively achieved in, among others, (i) A Highly Integrated and Cohesive Economy;
eliminating tariffs and facilitating trade; (ii) A Competitive, Innovative, and Dynamic ASEAN;
advancing the services trade liberalisation agenda; (iii) Enhanced Connectivity and Sectoral Cooperation;
liberalising and facilitating investment; (iv) A Resilient, Inclusive, People-Oriented, and People-Centred
streamlining and harmonising capital market regulatory frameworks and ASEAN; and
platforms; (v) A Global ASEAN.
facilitating skilled labour mobility;
promoting the development of regional frameworks in 4.
- competition policy, The immediate priority is to complete the implementation of measures
- consumer protection and unfinished under the AEC Blueprint 2015 by end-2016.
- intellectual property rights; The continuing commitments of Cambodia, Lao Peoples Democratic
promoting connectivity; Republic, Myanmar and Viet Nam (CLMV) under the AEC Blueprint
narrowing the development gap; and 2015 up to 2018 are also incorporated under the AEC Blueprint 2025.
strengthening ASEANs relationship with its external parties.
5. In the next decade, ASEAN will also
2. ASEAN recognises that regional economic integration is a dynamic, provide a new emphasis on the development and promotion of micro,
ongoing process as small and medium enterprises (MSMEs) in its economic integration
efforts. At the same time, ASEAN will likewise
economies as well as
domestic and external environments embrace the evolving digital technology as leverage to enhance trade
- are constantly evolving. and investments,
In this context, ASEAN has initiated two studies for the AEC Blueprint provide an e-based business platform,
2025. promote good governance, and
- The AEC Blueprint 2025 has been developed taking into account the facilitate the use of green technology.
recommendations of the two studies, namely, by
the Economic Research Institute for ASEAN and East Asia 6. The AEC 2025 is envisioned to:
(ERIA), and t (i) Create a deeply integrated and highly cohesive ASEAN
he S. Rajaratnam School of International Studies (RSIS) and the economy
Institute of Southeast Asian Studies (ISEAS), as well as that would support sustained high economic growth and
inputs from other stakeholders. resilience
The measures taken have to lead in creating a networked, competitive, even in the face of global economic shocks and volatilities;
innovative, and highly integrated and contestable ASEAN.
(ii) Engender a more equitable and inclusive economic growth in
3. The overall vision articulated in the AEC Blueprint 2015 remains ASEAN that
relevant. narrows the development gap,
eliminates if not reduces poverty significantly,
Page !44 of !47
 sustains high growth rates of per capita income, and (vii) Incorporate a sustainable growth agenda that promotes a science-
maintains a rising middle class; based use of, and support for, green technology and energy;

(iii) Foster (viii)

robust productivity growth through - Promote the use of the ASEAN Protocol on Enhanced Dispute
- innovation, Settlement Mechanism (EDSM) and
- technology and - develop other approaches to speed up economic dispute resolution;
- human resource development, and
intensified regional research and development (ix) Reinforce ASEAN centrality in the emerging regional economic
- that is designed for commercial application to increase architecture by maintaining ASEANs role as the centre and
ASEANs competitive edge facilitator of economic integration in the East Asian region; and
- in moving the region up the global value chains (GVCs)
- into higher technology and knowledge-intensive (x) Work towards a common position and enhance ASEANs role
manufacturing and services industries; and voice in global economic fora.

(iv) Promote the principles of good governance, transparency, and II. CHARACTERISTICS AND ELEMENTS OF ASEAN ECONOMIC
responsive regulatory regimes COMMUNITY BLUEPRINT 2025
- through active engagement with the
private sector, A. A Highly integrated and cohesive Economy
community-based organisations, and
other stakeholders of ASEAN; 7. The main objective of this characteristic is
- to facilitate the seamless movement of goods, services, investment, capital,
(v) Widen ASEAN people-to-people, institutional, and infrastructure and skilled labour within ASEAN
connectivity in order to enhance ASEANs trade and production networks, as well as
through ASEAN and sub-regional cooperation projects - to establish a more unified market for its firms and consumers.
that facilitate movement of capital as well as skilled labour and
talents; 8. The key elements of a highly integrated and cohesive ASEAN economy
include:
(vi) Create a more dynamic and resilient ASEAN,
- capable of responding and adjusting to emerging challenges A.1. Trade in Goods
- through robust national and regional mechanisms that address 9. The implementation of AEC Blueprint 2015 measures relating to tariff
food and energy security issues, elimination in accordance with the ASEAN Trade in Goods Agreement
(ATIGA) and trade facilitation have contributed to greater free ow of
natural disasters, goods. In AEC 2025, ASEAN will continue to reduce or eliminate border
economic shocks, and and behind-the-border regulatory barriers that impede trade, so as to
other emerging trade-related issues as well as achieve competitive, ef cient, and seamless movement of goods within
global mega trends; the region.

Page !45 of !47

10. Strategic measures include the following:
(i) Strengthen ATIGA further. In view of the ongoing review of the
ASEAN+1 free trade agreements (FTAs) and the Regional
Comprehensive Economic Partnership (RCEP) negotiations,
commitments in the ATIGA will be reviewed and re ned to, among
others, enhance provisions to entrench ASEAN centrality, strengthen
the ATIGAs noti cation process, and bring down further the
remaining tariff barriers in ASEAN towards the free ow of goods in
the region.
(ii) Simplify and Strengthen the Implementation of the Rules of
Origin (ROO). ROO implemented by ASEAN Member States
should be simpli ed, business-friendly and trade-facilitative, to bene t
the regions trade, in particular the participation of MSMEs to
encourage them to expand, upgrade, and deepen their linkages within
the region. Towards this end, priority sectors for Product Speci c
Rules (PSRs) can be negotiated, and processes for the determination
of origin criteria streamlined.
(iii) Accelerate and Deepen the Implementation of Trade Facilitation
Measures. ASEAN played a leading role in the conclusion of the
World Trade Organization (WTO) Agreement on Trade Facilitation
(ATF) in 2013. Beyond ensuring the smooth implementation of the
ATF in ASEAN Member States, ASEAN aims towards convergence
in trade facilitation regimes among ASEAN Member States and to
move closer to the global best practice. The ASEAN Trade
Facilitation-Joint Consultative Committee (ATF-JCC) comprising
representatives from the public and private sectors has been
established to accelerate work on trade facilitation and ensure
expeditious movement of goods within the region.
Among the key measures are the following:
a. Complete measures initiated under the AEC Blueprint 2015;
b. Fully roll-out the National Single Windows in all ASEAN Member
States, and widen the scope of the ASEAN Single Window project to
include more documents and stakeholders in all ASEAN Member States;
c. Cooperate on the effective operationalisation of the National and ASEAN
Trade Repositories for enhanced regulatory transparency and certainty for
the private sector in the region;
Page !46 of !47
d. Streamline and simplify administrative regulatory regimes, documentary
requirements, as well as import and export procedures, including customs
procedures;
e. Deepen regional implementation of trade-facilitative ASEAN initiatives
such as Authorised Economic Operators (AEO) programme and Self-
Certification programme;
f. Strengthen public-private sector cooperation, collaboration, and
partnership in improving the process, institutional and infrastructural
foundations of efficient and effective trade facilitation within the region;
g. Minimise trade protection and compliance costs in dealing with Non-
Tariff Measures (NTMs). Most NTMs address regulatory objectives such
as environmental, health and safety, security or cultural considerations,
but they can also signi cantly impede trade inadvertently or by design.
Addressing NTMs involves the following:
(i) accelerating work towards full elimination of non- tariff barriers;
(ii) standards and conformance measures, e.g. equivalence in technical
regulations, standards harmonisation, alignment with international
standards and mutual recognition arrangements (MRAs); and
(iii) streamlining procedures and reducing requirements for certi cates,
permits and licenses to import or export.
Measures that give rise to a trade facilitative regime in ASEAN include the
following:
1. Explore imposing stringent criteria and sunset clause on trade-protective
NTMs such as quotas and other quantity restrictions in imports and
exports;
2. Embed good regulatory practice (GRP) in implementing domestic
regulations and practices and thereby minimise compliance cost of
meeting NTM requirements;
3. Strengthen coordination with private sector in determining, prioritising
and minimising the unnecessary regulatory burden of NTMs on the
private sector; and
4. Explore alternative ways to addressing NTMs such as sectoral or value
chain approaches to deal with NTMs.
h. Work towards facilitative standards and conformance. This involves
- accelerated implementation of harmonisation of standards and technical
regulations,
- improvement of quality and capability of conformity assessment,
- enhanced information exchange on laws, rules, and
- regulatory regimes on standards and conformity assessment procedures.
- This also involves regional cooperation and agreement on measures to
facilitate MSME upgrading towards regionally and/or internationally
agreed standards to facilitate exports.
- Relevant measures include the following:
1. Complete and deepen initiatives begun under the AEC Blueprint
2015;
2. Undertake concerted regional and national programmes to upgrade
the technical capacity and physical infrastructure for effective and
efficient conformity assessment regime in the region;
3. Establish effective measures for transparency and communication on
country-specific requirements;
4. Expand coverage of sectors under standards and conformance beyond
the priority integration sectors;
5. Embed GRP in the preparation, adoption, and implementation of
standards and conformance rules, regulations, and procedures;
6. Strengthen public-private partnership and enhance contribution
of the private sector in designing, monitoring, reviewing, and
updating of standards and conformance regime in the region; and
7. Strengthen cooperation with Dialogue Partners in the implementation
of technical barriers to trade (TBT) Chapters of ASEAN+1 FTAs, and
future economic partnership and free trade agreements.

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