WORLD TRADE  
ORGANIZATION  WT/COMTD/51/Add.6 
16 October 2007 
 (07-4441) 
Committee on Trade and Development Original:   English 
  
FRAMEWORK AGREEMENT ON COMPRE HENSIVE ECONOMIC COOPERATION 
BETWEEN THE ASSOCIATION OF SOUTH EAST ASIAN NATIONS  
AND THE PEOPLE'S REPUBLIC OF CHINA 
 
Communication from the Parties to the Agreement
 
 
Addendum  
 
  The following communication, dated 11 October 2007, is being circulated at the request of the delegations of Malaysia on behalf of th e ASEAN members of the WTO (Brunei Darussalam, 
Cambodia, Indonesia, Malaysia, Myanmar, the Phili ppines, Singapore, Thailand and Viet Nam) and 
China.  
_______________ 
 
 
 This document contains responses to the questi ons raised by the European Communities, the 
United States and Japan in documents WT/COMTD /51/Add.2, Add.3 and Add.4 respectively.  
   
  WT/COMTD/51/Add.6 
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THE EUROPEAN COMMUNITIES INQUIRIES AND ANSWERS ON THE ASEAN-CHINA FREE TRADE AREA 
NO QUESTIONS ANSWERS 
1 According to the Chinese Ministry of  Finance, China, Brunei, Malaysia, 
Indonesia, Myanmar, Singapore and Thaila nd gave tariff cuts to each other 
on 7,455 "kinds of commodities" as of 20 July 2005.  The Agreement on Trade in Goods does not include actual information on tariff lines' 
reductions materialized  since the entry into force of the EHP (July 2003).  
Therefore, could the Parties facilitate updated figures on the progression of 
the phasing out/reduction of tariff lines, in order to provide an annual state 
of play of the planned schedule, since the EHP entered into force? As stated at the 4
th Consultation Meeting of the ASEAN Economic 
Ministers and the Minster of Commerce of China (4th AEM-MOFCOM) 
which was held 29 September 2005, tariffs  on 4.9% of the total tariff lines 
have been eliminated and ASEAN-Chin a trade for products covered by the 
EHP has increased by 29% from the 2003 value of US$1.55 billion to 
US$2 billion in 2004.  
 
2 As regards Viet Nam, the Agreement on Trade in Goods does not include 
the definitive phasing-out schedule for its Sensitive List, since "it shall be 
determined not later than 31 December 2004."  In light of this, the EC 
would like to know whether Viet Nam has determined its Sensitive List?  If 
so, we would appreciate if Viet Nam facilitated the content of the 
aforementioned List. On 18 July 2005, Viet Nam and China have signed an MOU on the 
Outstanding Issues under the Agreement on  Trade in Goods to resolve these 
issues.  The outcome will be cove red by a Protocol to Amend the 
Agreement on Trade in Goods that is currently being considered by the ASEAN – China Trade Negotiating Comm ittee.  Viet Nam's tariff lines 
under the Sensitive List and Highly Sens itive List will be attached to the 
said Protocol. 
With regards to Viet Nam's phasing- out schedule for the tariff lines under 
the Sensitive List, the MOU clearly stat ed that Viet Nam shall reduce the 
applied MFN tariff rates of tariffs lin es placed in their respective Sensitive 
Lists to 20% not later than 1 January 2015.  These tariff rates shall be 
subsequently reduced to 0-5% not later than 1 January 2020. 
3 As regards the excluded products for Chapters 01-08 covered in the EHP, 
could the Parties facilitate updated figures on the current  situation since the 
excluded lists for Malaysia, the Philippi nes and Laos, and China were to be 
provided as of 1 March 2003? The latest list of excluded products for chapters 01-08 in the EHP for China, 
Lao PDR and Malaysia on a reciprocal b asis are available in the Protocol to 
Amend the Framework Agreement (s igned: 6 October 2003) that is 
available at the ASEAN Secretariat website (www.aseansec.org ).  
On 27 April 2005, the Philippines and China have signed an MOU on the 
Early Harvest Programme under the Framework Agreement to eliminate the 
tariff rates of 214 tariff lines. The Phil ippines' list of products subject to 
EHP scheme is also stated in the Ex ecutive Order No. 485 which was issued 
on 29 December 2005.  The Executive Or der and list tariff lines subject to  
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tariff elimination is available at the following website: 
http://www.tariffcommission.gov.ph/   
The Second Protocol to Amend the Framework Agreement is currently 
being considered by the ASEAN – China Trade Negotiating Committee, 
which will include the most recent updates on the EHP list. 
4 Figures for the products in the Sensitive List  and in the Highly Sensitive List  
should also be provided, in the view to analyse their contribution to total trade.  What percentage of bilateral trade do these sensitive products 
represent? What percentage of bilate ral trade will be duty free on 2012 and 
on 2015? When the ACFTA liberalization is completed, an average of 95% of tariff 
lines will be duty free by 2012 for ASEAN 6 and China.  As for Cambodia, Lao PDR, Myanmar and Viet Nam (CLMV), an average of 90% and 93.7% 
of tariff lines will have duty free in 2015 and 2018, respectively.  
5 According to the China Council for th e Promotion of International Trade, 
the ACFTA will report a population of 2 billion, a combined GDP of 
2 trillion US dollars and a total trade volume of 1.2 trillion dollars – 
exceeding the NAFTA in terms of trade volume upon its establishment.  By 
2020, it is said to account for 4 trillion US dollars of GDP, thus reaching 
EU levels.  Moreover, trade between China and the ASEAN reached 105.9 billion US dollars in 2004, a rise of 35.3% over 2003 volume.  The 
ASEAN has been China's fifth larg est trade partner for 12 consecutive 
years.  According to statistics provided by China's General Administration of Customs, bilateral trade in the first six months of 2005 approximated 
60 billion US dollars.  Given the outstanding economic significance of the 
FTA, the EC would be grateful if the parties could provide with trade figures, before (e.g. 2001-2004) and at the entry into force of the FTA, for 
the products covered both in the EH P and in the Agreement on Trade in 
Goods. Kindly refer to the ASEAN Secretariat website (www.aseansec.org
) for the 
information requested.  
6 According to Art. 6 of the Agreement, any party is entitled to modify and 
withdraw concessions made to any other party under the Agreement.  This 
would seem to take place on a purely bilateral basis while the Agreement 
itself applies to all parties.  Could the parties clarify whether the modifications of concessions are made on a bilateral basis?  If so, how Any Party wishing to modify or withdraw its concessions under the 
ASEAN-China free trade area may do so upon notification to all the other 
Parties.  Negotiations can then take place among the Parties on matters 
pertaining to the proposed modification/withdrawal, including compensatory adjustment measures.    
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would the very same products from other Parties to the agreement be 
affected by the bilateral modificati on of concessions on products from one 
Party?  Finally, could the parties elaborate on the procedures of this mechanism?  
7 Could the Parties inform whether th ere is any agreement within ASEAN 
that sectors and products if any which are liberalized nationally with China 
and not yet liberalized under the ASEAN FTA would also be offered to their ASEAN colleagues? There are no agreements.  
 
8 Could the Parties elaborate on how the FTA will operate in practice so as to 
ensure that Chinese goods entering one ASEAN country will circulate 
freely throughout ASEAN without incurring additional tariffs at internal borders? As ASEAN is not a customs union, Chinese goods cannot circulate freely 
throughout ASEAN without incurring additi onal tariffs at internal borders.  
However, Chinese goods entering an ASEAN country will enjoy the preferential tariff rate of that country if  they satisfy the applicable rules of 
origin. 
9 According to Art. 23, "The Parties undertake to complete their internal 
procedures for the entry into for ce of this Agreement prior to 
1 January 2005."  But it follows that , in case of not compliance with that 
deadline, their obligations and ri ghts will commence on the date of 
implementation of such internal proce dures, which should be notified to all 
the other Parties in writing.  In light of  this option, could the Parties confirm 
that all Parties have all completed their internal procedures All countries except for Cambodia have ratified the "Agreement on Trade in 
Goods". 
 
 
10 Art. 7.3 of the Framework Agreement sets out measures to strengthen 
cooperation, including trade facilit ation measures such as customs 
cooperation.  However, there is no further mention in the Agreement on 
Trade in Goods of such measures.  What, if any, practical provisions for cooperation are foreseen in this field? As an important part of the ACFTA, the Parties have been cooperating on 
trade facilitation and custom measures for many years. 
 
11 According to Art. 6.4 of the Fram ework Agreement, "In addition to the 
EHP for trade in goods […}, the Parties will explore the feasibility of an 
early harvest programme for trade in services in early 2003."  The Malaysian Permanent Delegation in Geneva informed the EC on the 
26 September 2005 that an Agreement for Trade in Services was "expected Agreement on Trade in Services was si gned on 14 January 2007 at the 
China-ASEAN Summit held in Cebu, the Philippines.  It will be notified to 
the WTO under Article V of the GATS.       
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to be signed during the ASEAN-China Summit in December 2005" and that 
there were still ongoing negotiations for the Agreement on Investment.  
Since there has been no further notifi cation regarding the EHP for trade in 
services, could the Parties inform whet her an EHP was finally agreed?  Did 
the aforementioned ASEAN-China Summit agree on the signature of the 
Agreement for Trade in Services?  If so, could the Parties confirm the date of the entry into force of the Agreement and inform when it will be notified 
in the Committee on Trade in Services for assessment of compliance with 
Article V of GATS? 
12 Article 5 of the Framework Agreement points out the Parties' aim to "enter 
into negotiations in order to progressive ly liberalise the investment regime."  
Could the Parties brief on the state of play of the ongoing negotiations and 
whether they have concluded an y investment agreement covering 
manufacturing?  If a date for the entry in to force is agreed, could the Parties 
inform when the CRTA will be notified? Negotiations for the Agreement on Investment are still on-going.  
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THE UNITED STATES INQUIRIES AND ANSWERS ON THE ASEAN-CHINA FREE TRADE AREA  
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1 The Protocol to Amend the Fram ework Agreement on Comprehensive 
Economic Cooperation between the Associ ation of South East Asian Nations 
and the People's Republic of China c ontains important information about 
products included in and excluded from the Early Harvest Programme, and 
hence appears essential to the understanding of the working of the liberalization 
plan.  We commend the ASEAN for ha ving this document available on its 
website, but wonder why it was not notifie d to the WTO.  Please provide your 
reasons for not transmitting this document in your notification. The Protocol to Amend the Fram ework Agreement on Comprehensive 
Economic Cooperation between ASEAN and China was notified to 
the WTO under WT/COMTD/51. Annexes to the Protocol are available at the ASEAN Secretariat website ( www.aseansec.org
).  
 
2 Are there any other documents related to the Comprehensive Economic 
Cooperation between China and the ASEAN that have not been notified to the 
WTO?  If so, please provide a list of th e documents and information and how 
they can be accessed. The following agreements have been notified to the WTO: 
- Framework Agreement on Comp rehensive Economic Cooperation 
between ASEAN and China (Signed:  4 November 2002) 
- Protocol to Amend the Framew ork Agreement on Comprehensive 
Economic Cooperation between ASEAN and China (Signed:  
6 October 2003)  
- Agreement on Trade in Goods of the Framework Agreement on 
Comprehensive Economic Coopera tion between ASEAN and China 
(Signed:  29 November 2004) 
In addition to the agreements that ha ve been notified, there is also an 
Agreement on Dispute Settlement Mechanism of the Framework 
Agreement on Comprehensive Economic Cooperation between 
ASEAN and China (Signed:  29 November 2004) that is available in the ASEAN Secretariat website ( www.aseansec.org
).  
3 Do the Parties have any plans to incl ude environmental or labour provisions in 
any of the agreements negotiated,  under the Framework Agreement? There are no plans at this point in time to bring in labour and 
environment issues into the FTA.  
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4 Did all Parties complete their internal  procedures for entry into force of the 
agreement by 1 January 2005, as provided in Article 23? 
a. If not, please provide a list of which countries have not done so, and on 
what date did they, or do they intend to, complete their internal 
procedures? N o .           
a.  All countries except for Cambodia have ratified the 
Agreement on Trade in Goods.  
 
5 It appears from our reading of the Fr amework Agreement and the Agreement on 
Goods that there are three categories of  liberalization for goods; the Early 
Harvest Programme, Normal Track and Sensitive Track.  The Sensitive Track, 
in turn, has two subcategories: the Se nsitive List and Highly Sensitive List. 
a. Please provide the Committee with data showing the percentage of tariff 
lines and trade flow for products covered under each of the four 
categories. 
 
  
 
 
 
 
  
 
a. The percentage of tariff lines under NT2, SL and HSL at HS 6 
digit is as follows:  
Percentage of Tariff Lines Country 
NT2* SL HSL 
Brunei 
Darussalam 1.9% 1.3% 0.9% 
Cambodia 4.8% 6.7% 2.9% 
China 2.9% 3.1% 1.9% 
Indonesia 5.0% 5.8% 0.9% 
Lao PDR 1.7% 1.7% 0.6% 
Malaysia 2.4% 5.4% 1.8% 
Myanmar 3.2% 5.2% 0.0% 
Philippines 0.0% 5.2% 1.5% 
Singapore 0.0% 0.0% 0.0% 
Thailand 2.8% 4.8% 1.9% 
Viet Nam 4.8% 5.4% 2.7% 
Note: * Tariff lines under the Normal Track that are scheduled for 
tariff elimination not later than 1 January 2012 for 
ASEAN 6 and China, and 1 January 2018 for CLMV.  
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b. When all liberalization is completed, what percentage of tariff lines and 
trade flows will be duty free? 
 c. How many tariff lines are not included in any of the three categories, and 
what percentage of trade do those lines cover? b. When the ACFTA liberalization is completed, an average of 
95% and 93.7% of tariff lines will be duty free for ASEAN 6 
+ China by 2012 and for CLMV Countries (Cambodia, Lao PDR, Myanmar and Viet Nam) by 2018.  
 
c. There are minimal products not included in any of the three 
categories, covering a very small percentage of trade.  These 
products are excluded in accordance with the provisions on 
General and Security Exemption. 
6 From our review of the Agreements, the Protocol and the Annexes, many tariff 
lines, and in some cases, entire chapters , are not included in any of the three 
categories.  For example, Chapters 9-27 do not appear on Brunei Darussalam's 
Normal Track or Sensitive Track lists.  China does not appear to include Chapters 50, 53, 55 or 61 (among others ) in its Normal Track or Sensitive Track 
lists. 
a. Please explain why some tariff lines are excluded from the EHP and two 
Tracks. 
b. What is the liberalization schedule for tariff lines not in one of the 
categories? 
c. For each Party, please provide the Committee with a list of chapters 
excluded from the EHP, the Normal Track or the Sensitive Track.  
 
 
 
 
 a. Kindly refer to the answers in 5(c). 
b. All tariff lines should be covered in either schedule. 
  
c. No chapters are excluded from liberalization under the 
ACFTA.  
7 Regarding the Early Harvest Programme , have China and ASEAN eliminated 
tariffs on all products not included in Annex 1 or Annex 2 of the Framework 
Agreement (as modified by the Protocol), as provided in Annex 3 of the 
Framework Agreement?  Have the newer ASEAN states completed their tariff 
reductions consistent with th e EHP schedule in Annex 3? All Parties to the ACFTA have commenced the implementation of 
EHP on 1 January 2004, except for the Philippines.  
The Philippines implemented the EHP on 1 January 2006 following 
the issuance of Executive Order No.485 on 29 December 2005.  The 
Executive Order and list tariff lines s ubject to tariff elimination is 
available at the following website: 
http://www.tariffcommission.gov.ph/   
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8 Regarding the products in Annex 1 of  the Framework Agreement (as amended 
by the Protocol) that are excluded from the Early Harvest Programme, are those 
products ever subject to liberalization under the Agreement? 
 
a. What percentage of tariff lines in each Party's tariff schedule do these 
lines represent? For products excluded from the EHP, parties could classify these 
products either in the Normal Track or Sensitive Track, unless 
exemption from liberalization by virtue of the General and Security Exemptions under the TIG Agreement.  
a. Kindly refer to the ASEAN Secretariat website 
(www.aseansec.org
) for the information requested. 
9 Regarding Annex 1 of the Agreement on Goods, concerning the Normal Track 
Lists, the ASEAN-6 and China must each reduce at least 40% of their tariffs to 
0-5% by 1 July 2005.  Have those reductions or eliminations occurred? 
a. Are the affected tariff lines available to the public? Only countries who have issued th e legal enactment implement the 
Agreement on Trade in Goods to re duce its tariff rates accordingly. 
The tariff lines are listed in the Agreement on Trade in Goods which is 
available at the ASEAN Secretariat website (www.aseansec.org ). 
10 Please provide the Committee with an update on the current status of the 
upcoming deadlines for the tariff liberalization scheduled for 1 January 2007 
under the Normal Track schedule. For parties who have started their implementation of concessions for 
the Normal Track, legal enactment s should be available in their 
respective tariff books, and complete tariff reduction schedules should 
be readily available up to 2010-2012. 
11 Cambodia's Normal Track List includ es lines that appear  on both the Early 
Harvest Programme and the Normal Track, and which are scheduled to be 
replaced no later than 31 December 2004. 
a. Has this replacement occurred? 
b. If so, has a current list been circulated? 
  
 
c. How is a line listed on two liberalization schedules treated?  
 
a. Yes, the replacement has occurred. 
b. The revised list has been administratively amended and 
available at the ASEAN Secretariat website 
(www.aseansec.org ).  The amendments will be attached to the 
new Protocol to Amend the Agreement on Trade in Goods 
which is currently being considered by the ASEAN-China 
Trade Negotiating Committee. 
c. There should not be a case where a product is classified in 
more than one Track.  This is the reason why Cambodia has to  
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d. Does any other Party currently have tariff lines dually listed in two lists? revise its schedules. 
d. No.  
12 China has included rice and rice products, rubber, palm oil, cars and auto parts, 
sugars, and tropical woods on its Hi ghly Sensitive List.  These products 
constitute many of the highest volume goods traded in South East Asia.  Please 
provide the Parties' views on how retain ing 50% tariffs indefinitely on such 
highly traded goods will promote and f acilitate development in the region. Agree that the ACFTA should be able to promote and facilitate 
development in the region.  Flexib ility to Parties to address their 
sensitive areas in goods is one of the principles observed in the FTA 
negotiations.  Under the modality therefore, Parties can maintain a highly sensitive list subject to the cap prescribed in the TIG 
Agreement.  The mutually agreed thresholds/caps were intended to 
provide the most equitable balance of benefits to all Parties.  
13 It appears from Annexes 1 and 2 (A ppendices 2 and 3, respectively, of the 
Protocol) that the Philippines has not yet provided its exclusion list nor its 
specific product list for the Early Harvest  Programme.  Nor has the Philippines 
provided a list of goods for inclusion on the Normal Track. 
a. Has the Philippines negotiated these lists? 
i. Are they available to the public? 
ii. Is the Philippines simply exempted from the reduction 
requirements in subparagraphs 6(a) and (b) of Annex 1? On 27 April 2005, the Philippines a nd China have signed an MOU on 
the Early Harvest Programme under the Framework Agreement to 
eliminate the tariff rates of 214 tariff lines.  
The ACFTA Preferential Tariff Rates have been implemented 
following the Executive Order No. 485 which was issued on 
29 December 2005.  The Executive Order and list tariff lines subject to tariff elimination is available at the following website: 
http://www.tariffcommission.gov.ph/
 
14 Pursuant to Annex 1 of the Agreemen t on Trade in Goods, Viet Nam's Normal 
Track list was to be determined by 31 December 2004; pursuant to Annex 2, 
Viet Nam's ceiling of import value and th e list of products on its Sensitive Track 
lists were also to be dete rmined by 31 December 2004.  
 
a. What ceiling level was agreed to for Viet Nam? 
b. Have the Normal Track and Sensitiv e Track lists been determined? On 18 July 2005, Viet Nam and China have signed an MOU on the 
Outstanding Issues under the Agreement on Trade in Goods to resolve 
these issues.  The outcome will be covered by a Protocol to Amend the 
Agreement on Trade in Goods that is currently being considered by 
the ASEAN – China Trade Negotiating Committee. 
a. The ceiling level agreed is 500 tariff lines and no ceiling on 
import value. 
b. Normal Track with flexibility and Sensitive Track lists has 
been determined and will be a ttached to the Protocol to  
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c. If so, have they been circulated? 
d. If not, when will those negotiations be completed? Amend the Agreement on Trade in Goods. 
c. It has been circulated among the Parties to the Agreement on 
Trade in Goods. 
d. Negotiations have been completed. 
15. According to the most recent trade da ta we have for China and ASEAN [2000], 
it appears that there is significant overlap between ASEAN's major imports 
from the world and its major imports from Chin a.  In such a situation, it appears 
that trade diversion is a realistic possi bility.  Paragraph 3(a) of the Enabling 
Clause provides that Enabling Clause agreements "shall be designed…not 
to…create undue difficulties for the trad e of any other" Members.  Please 
explain what steps the Parties have taken to ensure that the FTA has not created 
undue difficulties, in the form of trade diversion or otherwise, for the trade of 
other Members? ASEAN and China agree that the ACFTA is trade creating and will 
promote trade and investment from both sides and the agreement is 
consistent with the WTO. 
16 We are interested in the "Highly Se nsitive List" products.  According to the 
Agreement, a Party can place up to 100 tariff subheadings (at the 6 digit line) or 
40% of the number of tariff lines on the Sensitive List on the Highly Sensitive 
List.  For these products, a Party may maintain tariffs up to 50%, indefinitely. 
In the current NAMA discussions, anything above 15% is considered a tariff 
peak.  We understand the concept of sens itive products, but our approach is not 
to maintain tariffs of 50%, but rather to  extend the time period of which they are 
eliminated.  Please provide the Parties' view of how allowing the indefinite 
retention of tariffs of up to 50% will facilitate and promote trade and 
development. 
a. For each Party, after full implementation of the ACFTA, what would be 
the trade-weighted (according to 2001 statistics) and simple average tariff rates for both the Sensitive List and Highly Sensitive List? The FTA balances the liberalization ob jective with flexibility to take 
into account the sensitivities of the Parties.  
It includes a reciprocity principle which will encourage Parties to 
further liberalize products in the HSL. 
The FTA also incorporates a Review Provision in 2008 with a view to 
pursue further liberalization. 
17 Was an agreement reached on the treatment of tariff lines of the Parties subject 
to in-quota and out-quota rates,  including modalities for tariff 
reduction/elimination as scheduled to be completed no later than Treatment of products subject to tariff-rate quotas are governed by 
certain principles mutually agreed by Parties:  (1) it shall be negotiated 
bilaterally between one or more  ASEAN Member country(ies) and 
China;  and (2) concessions arisi ng from the bilateral negotiations  
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31 March 2005?  If so, have the results of the discussions been ci rculated? shall be extended to all the other parties to the A CFTA on an 
ACFTA-MFN basis.  
18 Article 3(8) of the Framework Agreement sets out a list of issues to be 
addressed in the FTA on goods.  Many of the items, such as tariff reductions/eliminations, rules of origin  and safeguards, are included in the 
Agreement on Goods.  The remaining items, on TRQs, SPS measures, AD/CVD 
disciplines and TRIPS issues, do not appear to be addressed (although there is a provision concerning non-tariff barriers (NTBs)). 
a. Could the Parties describe thei r plans to address these issues? 
b. Has a timetable been agreed upon for their reduction or elimination? 
c. Will the Parties notify any such add itional agreements to the WTO under 
Article XXIV? Issues on TRQs have been discu ssed and resolved as follows: 
treatment of products subject to tariff-rate quotas are governed by certain principles mutually agreed by Parties:  (1) it shall be negotiated 
bilaterally between one or more  ASEAN Member country(ies) and 
China;  and (2) concessions arisi ng from the bilateral negotiations 
shall be extended to all the other parties to the ACFTA on an 
ACFTA-MFN basis.  
The Parties agree to abide by the pr ovisions of the WTO disciplines on 
non-tariff measures, technical barriers to trade, sanitary and 
phytosanitary measures, subsidies and countervailing measures, 
anti-dumping measures and intellectual property rights. 
19 Pursuant to Article 8 of the Goods Agreement, the Parties agree to 
"identify…for elimination" all non-tariff barriers.  In response to a question 
concerning the timing of elimination of NTBs, the Representative of China went 
on to say that the Parties "would notify any agreement on NTBs to the CTD."  [WT/COMTD/M/55, paragraph 68]. 
a. Has the timeframe for elimination of NTBs been agreed upon?  If so, is 
it available to Members and the public? The ACTNC is currently working on the NTBs. 
 
 
  
20 Article 8 of the Goods Agreement also requires the Parties to make available 
and accessible information on the quantitative restrictions.  Is that information 
available and accessible to the public?  Wh ere would a trader be able to obtain 
such information? ASEAN and China have designated fo cal points, whose contact details 
can be viewed at the ASEAN Secretariat website,  
http://www.aseansec.org . 
The Parties who are WTO Members by the signature of the TIG 
Agreement have already eliminated QRs according to their 
commitments under the WTO.  The Parties who are still not WTO Members commit to eliminate their QR under ACFTA within three  
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years, as set out in the TIG Agreement. 
21 Have a product-specific rules-of-origin been negotiated, as provided for in 
Attachment B in Annex 3 of the Ag reement on Goods?  If so, are they 
accessible to members of the business community? The first package has been agreed and the PSR is also posted in the 
website described above.  PSR  negotiations are on-going. 
 
22 Pursuant to Article 9 of the Goods Ag reement, a Party may impose a safeguard 
measure within the "transition period".  The transition is defined as five years 
after  the completion of duty elimination or reduction for that product.  Please 
provide the Parties' view as to why such an extensive "transition period" is necessary, and its consistency with the requirement that Enabling Clause 
agreements "facilitate and promote th e trade of developing countries"? From the experience of ASEAN and China, the five years period is 
necessary for the Parties to adjust to  the effect of duties elimination. 
 
23 Does the agreement contain a safeguard measure for goods that are included in 
the "highly sensitive" goods list but do not have a transition period?  If so, please describe how the safeguard measure works and what products are 
covered. The ACFTA safeguard measure may be invoked for any product, 
beginning from the date
1 of entry into force of the Agreement and end 
five years from the date of completion of tariff reduction/elimination 
for that product. 
 
 
                                                      
1 The Agreement on Trade in Goods of the Framework Agreement on Comprehensive Economic Cooperation between ASEAN and China shall enter into force on 
1 January 2005.  The first date of implementation of concessions shall be 1 July 2005.   
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1 Entry into force and State of Play (Article 23, Agreement on Trade in 
Goods). 
(1) Have all the Parties completed th eir internal procedures for the entry 
into force of the agreement?  If not, could the Parties provide us with 
information on the current situation?  
(2) As for ASEAN 6 and China, if they  successfully completed the internal 
procedures for the entry into force of the agreement, their tariff reduction or 
elimination should have taken place no later than 1 July 2005.  Could the 
Parties inform us if the expected tariff reduction/elimination occurred as 
stated in the Agreement?  
(3) How can the public know the exact tariff rate for specific products?  Can 
the public foresee the change of tariff rates well in advance?           
          
(1) No.  All countries except for Cambodia have ratified the "Agreement on 
Trade in Goods". 
(2) No, not all Parties have issued th eir legal enactments.  Only China, 
Indonesia, Malaysia, Myanmar, Philippin es, Thailand have issued the legal 
enactment to implement the ACFTA preferential tariff rate, while Singapore 
is not required to issue a legal enactme nt as its domestic law is already align 
with the "Agreement on Trade in Goods". 
(3) Some legal enactment issued c over the period up to 2012/2015.  Those 
which cannot issue such legal enactment  were required to provide their 
indicative tariff reduction schedule for the implementation period.  
2 Has the Philippines established the lis ts under the Early Harvest Programme 
and the list of goods which will be included in the Normal Track?  If not, 
when do the Parties expect it to be established?  Yes.  On 27 April 2005, the Philippines and China have signed an MOU on 
the Early Harvest Programme under the Framework Agreement to eliminate 
the tariff rates of 214 tariff lines.  
The ACFTA Preferential Tariff Rates has been implemented following the 
Executive Order No. 485 which was issued on 29 December 2005.  The 
Executive Order and list tariff lines subject  to tariff elimination is available 
at the following website:  http://www.tariffcommission.gov.ph/  
3 Could the Parties explain the current situation of the negotiation on the 
product-specific Rules of Origin?  The ASEAN-China Trade Negotiating Committee Working Group Meeting 
(ACTNC-WGROO) has concluded and implemented the First Package of 
Product Specific Rules (PSR).  Negotiations for the Second Package of PSR are currently on-going. 
4 Could the Parties give us updated information on the status of the 
negotiation in the area of Trade in Services and Investment?  Agreement on Trade in Services was si gned on 14 January 2007 at the 
China-ASEAN Summit held in Cebu, the Philippines.  It will be notified to 
the WTO under Article V of the GATS.  Negotiation for the Agreement on Investment is still on-going.   
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5 Article 3 of the Agreement on Trade in Goods states that tariff lines which 
are covered subject to the tariff re duction or elimination programme under 
the agreement shall be categorized into Normal Track and Sensitive Track, which is further categorized into Se nsitive List and Highly Sensitive List. 
(1) Could the Parties explain how each Party made the Lists attached in 
Annex 1 and 2?  What does "on its own accord" mean?  Can each Party decide which products are put into which category without negotiating with 
other Parties?  
(2) Should we understand that all products are categorized under the 
Normal Track when they are not listed in Appendix 1 (Sensitive List) or 
Appendix 2 (Highly Sensitive List) of  Annex 2 of the Agreement on Trade 
in Goods, and the Early Harvest Programme under Article 6 of the Framework Agreement?      
 
 
(1) Each Party is free to decide the product list to include in the list taking 
into account the request from other parties. 
 
(2) Yes, unless exempted from the liberalization by the virtue of the 
General and Security Exemptions under the TIG Agreement. 
 
6 The Ceiling for the Sensitive Track (Article 3, Agreement on Trade in 
Goods, Annex 2) 
Paragraph 1 in Annex 2 of  the Agreement on Trade in Goods states that the 
maximum ceiling of the number of tariff lines which each Party can place in 
the Sensitive Track depends on the number of tariff lines and percentage of 
the total import value.  
(1) Does "the total import value" include imports from both China and the 
ASEAN Member countries?  In other wo rds, does a Member country of the 
ASEAN include the import value fro m other ASEAN Member countries 
when it calculates "the total import valu e" in accordance with this Annex?  
(2) Could the Parties give us the background information on the provisions 
which set the different ceilings for (a ) China, (b) ASEAN 6 and (c) CLMV? 
 
(3) As for the ceilings based on tariff lines, is this number based on the  
 
 
 
(1) The import value threshold of China's single ST list for ASEAN is 
calculated based on China's imports from ASEAN as a whole;  ASEAN 
Member countries' ST lists are calculate d based on their individual bilateral 
imports from China. 
(2) The different timelines and ceili ngs for China and ASEAN 6, and the 
CLMV can be attributed to the flexib ility and the special and differential 
treatment given to CLMV. 
(3) It is based on the HS 6-digit level.  
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NO QUESTIONS ANSWERS 
HS 6-digit level, or based on the level used domestically?;  
(4) Could the Parties give us the background information on how numbers 
such as 40% and 100 tariff lines were decided for the ceiling?   
(4) It is an outcome of a very rigorous negotiations. 
7 Reciprocity (Article 3, Agreem ent on Trade in Goods, Annex 2) 
(1) The reciprocal tariff rate treatment  is provided in pa ragraph 6, Annex 2 
of the Agreement on Trade in Goods.  We think that the scope of tariff 
reduction/elimination under the Agreem ent could become narrower because 
of this reciprocity.  Could the Parties give us their views on this point?  
(2) It is also provided in Annex 2 that "the tariff rate for a tariff line placed 
by a Party in the Sensitive Track must be at 10% or below in order for that Party to enjoy reciprocity".  Do the customs authorities check the tariff rate 
each time they handle an imported product from a Party?   
(1) The principle of reciprocity is to encourage Parties to hasten the pace of 
bringing down the tariffs of products in the Sensitive Track. 
 (2) The issuance of the Legal Enactment to implement the ACFTA 
preferential tariff rate has taken into account the tariff rate of the other 
Parties in order to consider the reciprocal treatment for the ACFTA preferential tariff rates under the Sensitive Track.  This will guide the 
customs authorities to enforce the appropriate tariff rate.  
8 Trade Data. 
Could the Parties give us the annual trade value (in US $) of imports in 
Chapters 1 – 24 and Chapter 44 of HS Code and the other Chapters of HS 
Code, according to how they are classifi ed within the Highly Sensitive Line, 
the Sensitive Line, the Normal Track and the Early Harvest, respectively 
among Parties?  From ASEAN Member countries, we would like to have 
the trade value country by country, and from China, we would like to have the trade value of imports from the ASEAN Member countries as a whole. Kindly refer to the ASEAN Secretariat website (www.aseansec.org
) for the 
information requested.  
 
 
 
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