The Agreement, which officially came into effect on May 17, 2010, is a breakthrough which will promote the flow of goods amongst ASEAN member countries.

Under the ATIGA, ASEAN nations will completely abolish taxes on goods by 2015. For newly-admitted members namely Cambodia, Laos, Myanmar and Vietnam, the taxes on 7 percent of goods will be eliminated by 2018.

A VOV reporter interviewed Le Tung Dung, the head of the ASEAN section of the Ministry of Industry and Trade’s Multilateral Trade Policy Department, on the issue.

VOV:  Can you tell us why ASEAN decided to draw up and sign the ATIGA?

Mr Dung: ASEAN has prioritized boosting economic cooperation and trade liberalisation amongst its member countries. Since 1992, ASEAN members have signed and implemented the Common Effective Preferential Tariff for the ASEAN Free Trade Agreement (CEPT/AFTA).

Vietnam has applied this Agreement since 1996. After 15 years of implementing the CEPT/AFTA, ASEAN member countries have made amendments and supplements to the Agreement have introduced many protocols and agreements. In addition, they have also reached agreements on different sectors that need to be compiled into a complete document.

The Association has set a common goal of building up the ASEAN Community by 2015 based on three major pillars: Political security, economics and socio-culture. In economics, trade is considered a key matter along with boosting investment and services. The goal of establishing an ASEAN Economic Community by 2015 requires ASEAN member countries to build a common production mechanism that enables the free flow of goods within the ASEAN market.

To realize this target, ASEAN member nations must build a sound legal framework by enforcing the ATIGA.

VOV: Can you tell us the most important part of the ATIGA?

Mr Dung: Commitments within ATIGA have been made under WTO rules and the Free Trade Agreements (FTA) which ASEAN is involved in and the ATIGA has put forward certain principles in cutting tariffs between ASEAN nations. At the same time, it is needed to have a plan for cutting non-tariff barriers.

More importantly, in the future, the ATIGA will make increase the competitive edge among ASEAN nations. Especially, the programme to facilitate trade activities between ASEAN will focus on three points including tariffs, non-tariffs and trade facilitation. The ATIGA has many detailed many provisions to implement the points and facilitate a free flow of goods.

Recognising differences in development is also one of the major contents in the cooperative programmes as well as in trade liberalisation, investment, and economics within ASEAN.

Currently, there are two groups within ASEAN with the first group consisting of Brunei, Malaysia, Indonesia, the Philippines, Singapore and Thailand. The second group includes nations which joined ASEAN later such as Cambodia, Laos, Myanmar and Vietnam.

Under the ATIGA, the nations in the first group have to cut their tax lines down by 2015 and the second group will have a plan to cut tariffs and non-tariff barriers by 2018.

VOV: How will Vietnam’s commitments be implemented under the ATIGA?

Mr Dung: Vietnam’s commitments to reduce tariffs under the ATIGA will be based on provisions in the Common Effective Preferential Tariff for ASEAN Free Trade Agreement (CEPT/AFTA). This means that on January 1, 2015, almost all Vietnamese goods will have a zero tax rate. However, there will be preferential incentives for Vietnam in particular and the second group in general. For example, some tax lines will be kept until 2018.

In addition, Vietnamese oil and gas and tobacco will have a separate timetable for cutting tariffs. For cars and motorbikes, the country has to obey the ATIGA’s regulations which mean that these goods will have a zero tax rate till 2018.

Source: VOV