Although these ASEAN national customs and trade authorities coordinate with each other, disputes may arise. The ASEAN Secretariat has no legal authority to settle these disputes, so disputes are settled bilaterally through informal means or through dispute settlement. A notable absentee has been India, which withdrew from RCEP negotiations last year and raised concerns about opening up its agricultural and manufacturing sector to increased foreign competition. ASEAN has a series of free trade agreements with other Asian countries, which are radically changing the global landscape of government procurement and manufacturing. It has, for example, a contract with China that effectively eliminated tariffs reduced to nearly 8,000 product categories or 90% of goods imported at zero. These favourable conditions have entered into force in China and in ASEAN home members such as Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand. These two agreements have the collective influence of making ASEAN a strategic centre for global sourcing and manufacturing. With the middle class of 150 million ASEAN consumers, this market, then associated with China and India, alone represents a global consumer market of the middle class, with a total free trade of about 650 million people – today. By 2030, given Asia`s growing prosperity and dynamism, about 64% of the global middle class will be based in Asia, representing 40% of the overall consumption of global small and medium-sized enterprises. Unlike the EU, AFTA does not apply common external customs duties to imported goods.
Any ASEAN member may, on the basis of its domestic calendars, impose tariffs on goods imported from outside ASEAN. However, for products originating in ASEAN, ASEAN members must apply a duty rate of 0-5% (the young members of Cambodia, Laos, Myanmar and Vietnam, also known as cmLVs, have been granted additional time to implement the reduced rates). This is called the common effective Preferential Tariff (CEPT). The dispute escalated into a trade dispute that has affected a dozen Australian industries and threatened the export of agricultural products, timber and resources to China for billions of dollars. Japanese Prime Minister Yoshihide Suga on Saturday reaffirmed his government`s support for “the expansion of a free and fair economic zone, including the possibility of a future return of India to the agreement, and hopes to gain the support of other countries.” It does, however, establish trade rules that will facilitate investment and other business in the region, said Jeffrey Wilson, research director at the Perth USAsia Center. Products that are not excluded from the CEPT-AFTA system are products on the list of highly sensitive products (i.e. rice) and the general list of exceptions. The Coordination Committee for the Implementation of the CEPTScheme for AFTA (CCCA) is currently reviewing all general exemption lists to ensure that only lists complying with Article 9(b)(1) of the CEPT Convention are included. Fifteen countries in the Asia-Pacific region have entered the world`s largest free trade agreement, which they hope will accelerate the recovery of their economies devastated by the coronavirus pandemic. The ASEAN bloc has largely eliminated all import and export tariffs on intermediate items, with the exception of Cambodia, Laos, Myanmar and Vietnam, which continue to impose nominal tariffs on certain items.
But these will also be completely eliminated by 31 December 2015, so that the entire region will be exempt from customs duties from that date. The RCEP agreement does not imply environmental protection or labour law and does not oblige countries to open up services and other vulnerable sectors of their economies. The new ASEAN members, Cambodia, Laos, Myanmar and Vietnam, have not been far from lagging behind in implementing their CEPT commitments, as nearly 80% of their products have switched to their respective CEPT ILS. . . .