Followers of this blog will
notice the link to the right that allows for pre-ordering of Rules
of Origin in ASEAN: A Way Forward, an analysis of the rules of origin
applied by ASEAN in its free trade agreements, co-authored with Stefano
Inama. Rules of origin are of course
important for customs purposes, because goods qualify for duty exemptions or
reductions based on where the goods originate.
Only ASEAN-origin goods, for example, qualify for the preferential
tariff rates of the ASEAN Trade in Goods Agreement (ATIGA).
However, rules of origin
also affect other aspects of trade in ASEAN, particularly because the ASEAN
Economic Community is not based on a customs union, but is instead a
preferential trade agreement. As such,
the ASEAN member states retain the right to impose trade remedies such as
anti-dumping measures, countervailing duties and safeguards, both under their
national laws and under the terms of the ATIGA, whereas in a customs union such
as the EU, the member states have no such authority.
For example, in one of my
recent anti-dumping cases involving two ASEAN member states, the exporting
country had only one producer (my client) of the product under
investigation. According to its records,
and confirmed by its home government, the
exporting country’s exports would account for less than 3% of total imports in
the importing country. Under the WTO
anti-dumping agreement, such exports would be considered too negligible to have
caused material injury to the importing country’s local industry – no
anti-dumping duties should be imposed under such circumstances.
However, the importing
government’s country, based on what was declared by the importers, found that
the exports were purportedly double of what was reported by the exporter. Hence the exports exceeded the 3%
negligibility level and the importing government imposed anti-dumping duties.
Now, to qualify as
ASEAN-origin, Form D documents would have to have been submitted by the
importers. The difference between the
exporting country’s data and the importing country’s data thus most likely
results from discrepancies in the filing of those Form D documents, e.g.,
importers filing Form D documents for which origin was not justified.
Import and export statistics
have also been controversial in ASEAN in other contexts. For example, for a long time, the exact
quantity and value of bilateral trade between Singapore and Indonesia was not
publicly discussed, because certain goods (e.g., petroleum and its related
products) were politically controversial (as Indonesia shipped much of its
petroleum to Singapore for refining).
Singapore routinely shows up as a major exporter of goods to other ASEAN
countries which it does not produce (e.g., flat-rolled steel), which frequently
results in trade remedy complaints against Singapore. And for several years, imports declared
under the personal duty-free allowance (e.g. duty-free purchases at the
airport) accounted for about 10% of annual Indonesian imports.
The foregoing shows that
rules of origin have importance beyond preferential import tariffs. Applying these rules correctly will require
greater education of the private sector as well as improved cross-border cooperation
by ASEAN customs and trade authorities.
