Law Summary
Tariff Reduction Obligations under the Agreement on Trade in Goods
- Article 3(2)(b) mandates that tariff lines under the Normal Track must have their Most Favored Nation (MFN) tariff rates gradually reduced or eliminated.
- Reduction schedule according to Annex 1 includes:
- MFN rates above 20% reduced to 20%.
- MFN rates 15%-19% reduced to 15%.
- MFN rates 10%-14% reduced to 10%.
- MFN rates 6%-9% reduced to 5%.
- MFN rates 0%-5% maintained.
- These reductions were to be implemented not later than January 1, 2006.
National Authority and Approval on Tariff Reductions
- The National Economic and Development Authority (NEDA) Board approved the tariff reductions on July 17, 2007.
- Section 402 of the Tariff and Customs Code empowers the President, upon NEDA recommendation, to modify import duties.
Application of AKFTA Tariff Rates (Section 1)
- Specific imported articles listed in Annex aAa are subject to AKFTA tariff rates as per the schedule in the Annex.
- These rates apply to imports from parties to the Agreement on Trade in Goods applying tariff concessions to the same product.
Tariff Rate Determination for ASEAN 8 (Section 2)
- For ASEAN 8 countries (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore, Vietnam), the applicable rate is the lower of the AKFTA rate or Common Effective Preferential Tariff (CEPT) rate.
- Proper Certificate of Origin (Form AK or D) is required to avail of these rates.
- The Tariff Commission may issue rulings to confirm applicable duty rates upon request.
Automatic Adjustment to Lower MFN Rates (Section 3)
- If the Philippine basic MFN tariff on a listed article is lowered below the prescribed AKFTA rates, the lower rate automatically applies.
Implementation and Compliance (Section 4)
- From the effective date, all listed articles entered into or withdrawn from Philippine warehouses shall bear the prescribed AKFTA tariff rates.
- Compliance with Rules of Origin under Article 5 of the Agreement on Trade in Goods is mandatory for tariff concession.
Revocation of Conflicting Issuances (Section 5)
- Presidential issuances, administrative regulations, or parts inconsistent with this Order are revoked or modified accordingly.
Effectivity (Section 6)
- The Executive Order takes effect immediately after full publication in the Official Gazette or a newspaper of general circulation in the Philippines.