Reportedly four ASEAN
members (Indonesia, Laos, the Philippines and Vietnam) are preparing a pilot
program to implement self-certification for exporters to qualify their goods as
originating in ASEAN for the ASEAN Trade in Goods Agreement (ATIGA). This would represent an application of the
“ASEAN – X” concept contained in the
ASEAN Charter, which allows a subset of ASEAN to proceed with an economic
policy without waiting for participation by other member states. I discussed this in a post last
year.
This would be uneventful but
for the fact that there is already an
existing ASEAN pilot program on self-certification involving Malaysia,
Singapore and Brunei, which Thailand
joined in December 2011. Hence if
the new pilot program comes into fruition, there would be two pilot programs
for self-certification, each with four ASEAN members. In other words, we would have two “ASEAN-6”
groups operating at the same time.
At first glance, this would
appear to be an absurd situation. It
would be as if the EU had decided to have two “common” currencies, one with the
Euro and one with the ECU, each competing to be the common currency of the
EU. Is this the “buffet” system of selectively
picking and choosing economic policies?
The answer is no.
A closer examination of the
reasons for creating a second pilot program demonstrates that a competition of
ideas is not necessarily a bad thing. In
my post last year on self-certification, I explained the fundamental
disagreement between the Malaysia-Singapore-Brunei-Thailand group and the
Indonesia-Laos-Philippines-Vietnam group:
Indonesia
has publicly stated that it would participate in the pilot program only if
participating companies were limited to manufacturers, and if the authorized
signatories per company were limited to three persons. This reflects a general suspicion among
certain ASEAN customs authorities that companies, and in particular trading
companies, could abuse the system to obtain FTA origin wrongly. These countries also expressed skepticism
about the success of the pilot program.
Hence
the incumbent group allows trading companies to participate whereas the
potential new group would not allow for this.
This issue will need to be resolved for self-certification to be applied
universally throughout ASEAN in ATIGA.
However,
I think having two pilot programs would allow for that. So long as the pilot programs remain just
that – temporary programs to test the merits of a policy -- they will be
useful.
The
potential new group is very skeptical of self-certification. Having a pilot program that they can
administer on their own terms will give them confidence that self-certification
can work. They can administer the
program in their own way (e.g. for manufacturers only) and review their own
data.
Meanwhile,
the incumbent group will have data for comparison purposes, based on both
quantitative and qualitative approaches.
After the pilot programs have generated sufficient data, a proper debate
can be held on which approach is best, given the various policy priorities and
administration issues that will have arisen.
Thus,
the intent of ASEAN-X, to allow a pathfinder group to move ahead with a policy
and letting the others catch up later at their own pace, can be applied
properly in this case. However, doing so
will require that the pilot programs run their course and proper policy debate
proceed. If the pilot programs become
entrenched, with each group running its own way, then “buffet” style
policymaking will also take root in the ASEAN Economic Community. Such confusion must not be allowed to
happen. I still look forward to hearing
more good news about the pilot program(s) and the increased use of
self-certification.
