Agreement

The Framework Agreement on Comprehensive Economic Cooperation between the Association of South East Asian Nations (ASEAN) and Korea (Framework Agreement) was signed by the Heads of Government/State of the ASEAN Member States and Korea on 13 December 2005 in Kuala Lumpur, Malaysia.

Implementing Executive Orders

The following E.O.s implement the Philippines’ tariff commitments under the AKFTA:

1. (1) E.O. 638 (s. 2007) – Reciprocal tariff rate treatment on tariff lines included in Sensitive Track
2. (2) E.O. 639 (s. 2007); E.O. 812 (s. 2009) – Normal Track
3. (3) E.O. 895 (s. 2010) – Transfer of refined coconut oil from the Sensitive Track to the Normal Track
4. (4) E.O. 52 (s. 2011) – Temporary waiver of reciprocal tariff treatment on certain articles as compensatory measure to the Republic of Korea
5. (5) E.O. 73 (s. 2012) – Highly Sensitive List
6. (6) E.O. 74 (s. 2012) – Sensitive List; Transfer of certain tariff lines from the Sensitive Track to the Normal Track

Pursuant to Section 1100 of the Customs Modernization and Tariff Act, an importer or exporter may file a written application for an advance ruling on the tariff classification of goods with the Commission.

Submission of Certificate of Origin Form AK is required in order to avail of AKFTA preferential tariffs.

Date of Full Implementation

2016

Overview of Tariff Commitments / Reciprocity

Tariff reduction/elimination is composed of two tracks:

1. (1) Normal Track
2. (2) Sensitive Track
1.    a.   Sensitive List
2.    b.   Highly Sensitive List
1.    (i)   Group A - Tariff lines subject to 50% tariff rate capping
2.    (ii)   Group B - Tariff lines subject to tariff reduction by 20%
3.    (iii)   Group C - Tariff lines subject to tariff reduction by 50%
4.    (iv)   Group D - Tariff lines subject to TRQs
5.    (v)   Group E - Tariff lines exempted from tariff concession

See Article 3 (Tariff Reduction and Elimination), Annex 1 (Modality for Tariff Reduction and Elimination for Tariff Lines Placed in the Normal Track), and Annex 2 (Modality for Tariff Reduction/Elimination for Tariff Lines Placed in the Sensitive Track) of the Agreement on Trade in Goods Under the Framework Agreement (TIG Agreement).

Annex 2 of the TIG Agreement provides that the reciprocal tariff rate treatment of tariff lines placed by an exporting Party in the Sensitive Track, excluding Group E (i.e., tariff lines exempted from tariff concession), while the same tariff lines are placed by the importing Party in the Normal Track, shall be governed by the following conditions:

1. (i)   the tariff rate for a tariff line placed by an exporting Party in the Sensitive Track, excluding Group E, must be at 10% or below and the exporting Party has given notification to that effect to the other Parties in order for that exporting Party to enjoy reciprocity;
   
   
2. (ii)   the reciprocal tariff rate to be applied to a tariff line placed by an exporting Party in the Sensitive Track shall be either the tariff rate of that exporting Party’s tariff line, or the Normal Track tariff rate of the same tariff line of an importing Party from whom reciprocity is sought, whichever is higher;
   
   
3. (iii)   notwithstanding sub-paragraph (ii), the importing Party can, on its discretion, apply its Normal Track tariff rate even if such rate is lower than the tariff rate of the exporting Party; and
   
   
4. (iv)   the reciprocal tariff rate to be applied to a tariff line placed by an exporting Party in the Sensitive Track shall in no case exceed the applied MFN rate of the same tariff line of an importing Party from whom reciprocity is sought.

Amendments

Please visit www.asean.org for any future amendments to the Agreements, including Protocols.