PROTOCOL
ON IMPROVEMENTS ON EXTENSION OF TARIFF PREFERENCES
UNDER THE ASEAN PREFERENTIAL TRADING ARRANGEMENT
MANILA, 15 DECEMBER 1987
The Government of Brunei Darussalam, the
Republic of Indonesia, Malaysia, the Republic of
the Philippines, the Republic of Singapore and
the Kingdom of Thailand, (hereinafter referred to
as Contracting Parties), Member Countries of
the Association of South East Asian Nations
(ASEAN) :
RECOGNIZING the need to enhance intra-ASEAN trade cooperation:
DESIRING to work towards a significant
expansion in intra-ASEAN trade by placing a
substantial share of the number and value of the
traded items in the Preferential Trading Arrangements
(hereinafter referred to as the PTA) by the turn of the century:
HAVE agreed, pursuant to paragraph 1 of
Article I of the Agreement on ASEAN
Preferential Trading Arrangements, Manila, 24
February 1977, to adopt the following specific
measures to improve on the extension of tariff
preferences under the PTA from the date of entry
into force of this Protocol:
I. DEFINITIONS
1. For the purpose of this Protocol, all
Contracting Parties agree to the following definitions:
(a) Exclusion List means a list containing
products that are, excluded from the
extension of tariff preferences under the
PTA.
(b) New items means products in the Exclusion List which are phased into the
PTA and are to be accorded margins of
tariff preference.
(c) Existing items means products which
are currently accorded margins of tariff
preference under the PTA.
II. COVERAGE OF PRODUCTS
2. The Contracting Parties shall expand the
coverage of the PTA by reducing the items in
their exclusion lists such that by the end of the 5
year period they do not amount to more than:
(a) 10 per cent of the number of items
traded by them; and
(b) 50 per cent of intra-ASEAN trade value.
3. The Contracting Parties shall further
endeavour to achieve a greater harmonization of
exclusion lists in pursuance of paragraph 2.
III. MARGINS OF PREFERENCE
4. New items introduced into the PTA from
exclusion lists pursuant to paragraph 2 of this
Protocol shall have a minimum Margin of
Preference of 25 percent.
5. The margins of preference on existing items in
the PTA shall be increased to 50 per cent.
IV. PROGRAMME FOR PHASING IN
TARIFF PREFERENCES
6. In order to achieve the margins of preference
referred to in paragraph 5, the Contracting Parties
shall adopt either one or a combination of the
following approaches:
(a) An across-the-board basis of 5
percentage points per annum;
(b) A product basis with the 50 per cent
margin of preference to be achieved at
the end of the 5-year period.
In respect of paragraph 6 (b), the
Contracting Parties shall phase in tariff
preferences as evenly as possible over the
five-year period, subject to the provisions of paragraph 9.
7. The Contracting Parties shall phase in the new
items into the PTA and increase the margins of
preference on existing items in the PTA in
accordance with the programmes which appear as
Annexes I and 2.
8. The Contracting Parties shall circulate and
agree upon their respective product lists to implement
this Protocol before the commencement of the five-year period.
9. The Contracting Parties take note that at this
juncture, the Republic of Indonesia and tile
Republic, of the Philippines might require 7 years
to complete the 5 year programme.
V. RULES OF ORIGIN
10. The ASEAN content requirement in the rules
of origin shall be reduced from 50 per cent to 35
per cent on a case-by-case basis for a period of
five years. With respect to Indonesia the ASEAN
content requirement will be reduced from 60 per
cent to 42 per cent. After the said period of
reduction it shall be reviewed with a view to
reverting to original levels.
VI. REVIEW
11. The progress on the implementation of the
measures specified in paragraphs to 5 above
shall be reviewed annually by the ASEAN Economic
Ministers to enable the Contracting Parties
to make necessary adjustment. At the end of the
5-year period from the date of entry into force of
this Protocol, the Contracting Parties shall
examine the possibility of achieving further
improvements.
VII. ENTRY INTO FORCE
12. This Protocol shall enter into force on 1 January 1988.
VIII. FINAL PROVISIONS
13. This Protocol may be amended by consensus
of the Contracting Parties.
14. This. Protocol shall be deposited with the
Secretary-General of the ASEAN Secretariat who
shall promptly furnish a certified copy thereof to
each of the Contracting Parties.
IN WITNESS WHEREOF, the undersigned,
duly authorized thereto by tlier respective
Governments, leave signed this Agreement.
DONE in Manila, Philippines this Fifteenth
day of December Nineteen Hundred Eighty
Seven in one original copy in the English
Language.