Home » Breaking News, Customs & Trade » EO inked on new tariff rates under ASEAN-HK trade deal

President Rodrigo Duterte has signed an executive order (EO) modifying the import duty rates on certain articles in order to implement Philippine tariff commitments under the free trade agreement (FTA) between Hong Kong and the Association of Southeast Asian Nations (ASEAN).

EO No. 102, signed on January 10, 2020, orders the levy of prescribed rates under the ASEAN-Hong Kong FTA (AHKFTA) on all goods originating from Hong Kong and ASEAN member states that are entered into or withdrawn from warehouses in the Philippines for consumption. Such goods will also need to submit a Certificate of Origin, in compliance with the Rules of Origin under AHKFTA.

AHKFTA was signed in the Philippines in November 2017, with all ASEAN member states completing signatures in March 2018. The AHKFTA was ratified by Duterte in January 2019 while the tariff reduction schedule on various products covered by the schedule of tariff commitments under the FTA was approved in May 2019.

READ: ASEAN, HK ink free trade, investment pacts

AHKFTA provides that each party will progressively reduce or eliminate customs duties on goods originating from the other parties of the FTA, in accordance with their respective schedule of tariff commitments.

EO 102 notes that the commitment under the AHKFTA to reduce tariffs and eliminate customs duties “will enhance trade and investment between the parties to the agreement.”

Under the AHKFTA, the Philippines, Brunei Darussalam, Malaysia, and Thailand will eliminate customs duties on 85% of products traded with Hong Kong within 10 years and reduce another 10% of tariff lines within 14 years.

Indonesia and Vietnam will eliminate customs duties for 75% of their products within 10 years, and reduce another 10% of tariff lines within 14 years.

Cambodia, Laos, and Myanmar will eliminate customs duties for 65% of their products within 15 years and reduce another 20% of tariff lines within 20 years.

Hong Kong and Singapore, meanwhile, will grant tariff free access and bind their customs duties at zero upon entry into force of the agreement.

Under EO 102, the Philippine Tariff Commission may be requested to issue advance rulings on tariff classification of goods to confirm the applicable rates of duty for particular goods subject to EO 102, consistent with Section 1100 (Classification Ruling) of Republic Act No. 10863, or the Customs Modernization and Tariff Act.

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