ASEAN JAPAN FREE TRADE AREA

The ASEAN Japan Comprehensive Economic Partnership Agreement (AJCEPA) provides for the establishment of a Free Trade Area (FTA) between ASEAN and Japan over a period of 10 years, taking into account the achievements of the bilateral Economic Partnership Agreements (EPAs) between certain ASEAN Member States and Japan, and the further progress of the ASEAN integration process. Being a comprehensive economic partnership, the Agreement includes chapters on Trade in Goods, Sanitary and Phytosanitary Measures, Technical Barriers to Trade, Trade in Services, Investment and Cooperation and Trade Facilitation. The Agreement was signed on an ad-referendum basis, with the Philippines signing the Agreement on 02 April 2008. Subsequently, the AJCEPA entered into force on 01 December 2008 for Japan and Singapore. The Philippines recently became a Party to the Agreement, having begun implementation just last 01 July 2010.

Trade in Goods Chapter The Chapter on Trade in Goods provides for the substantial reduction or elimination of tariffs and other barriers to establish the ASEAN Japan FTA in 10 years upon the entry into force of the Agreement under various tracks set out in its negotiated modality, namely: (i) Normal Track tariff elimination within 10 years upon entry into force with flexibility of up till 13 years for Cambodia, Laos and Myanmar; and (ii) Sensitive Track 0-5% after 10 years from entry into force. The Philippines offered fewer concessions under the AJCEPA compared to the Japan Philippines Economic Partnership Agreement (JPEPA) as total numbers of tariff lines offered for immediate tariff elimination in the AJCEPA are lower than those committed under the JPEPA. Additionally, the AJCEPA provides for longer tariff elimination schedules for some products as compared to the JPEPA. 127 lines previously categorized for immediate tariff eliminationin the JPEPA would have tariffs eliminated in the fifth year under the AJCEPA. Also, 55 lines consisting of motor vehicle parts and accessories would not be subject to tariff reduction in AJCEPA. The Agreement entered-into-force for the country on 01 July 2010 with the issuance of Executive Order (EO) 852. Other relevant chapters on trade in goods include rules of origin; customs procedures; sanitary and phytosanitary measures; standards, technical regulations and conformity assessment procedures and safeguard measures.

Trade in Services Chapter and Investments Chapter Both chapters in the AJCEPA provide aspirational and endeavor clauses for liberalization and facilitation with provisions for continuing discussions and negotiations among ASEAN, and Japan. Currently, the respective Sub-Committees are engaged in discussions on the scope of both Chapters and level of liberalization targeted prior to starting formal negotiations. Negotiations are scheduled to be completed by August 2011.

Copies of the Agreements and relevant Philippine Executive Orders are available online through the following url links: Framework Agreement on Comprehensive Economic Co-Operation 1. Text of the Agreement http://www.aseansec.org/15274.htm Trade in Goods Agreement 2. Schedule of Commitments http://www.aseansec.org/22572.htm (refer to the section on Annex 1 - Schedules for the Elimination or Reduction of Customs Duties) 3. Philippine Executive Orders EO 852 (covers all tariff www.tariffcommission.gov.ph/eo_852.htm reduction / elimination commitments)