Tariff duty modifications under ASEAN-China FTA

Section 402 of the Tariff and Customs Code of the Philippines (TCCP), as amended authorizes the President, upon the recommendation of NEDA, to modify import duties (including necessary changes in classification) and other import restrictions to carry out and promote foreign trade with other countries.
The ACFTA framework includes a commitment to establish the ACFTA covering trade in goods by 2010 for ASEAN 6 and by 2015 for the newer ASEAN Member States (where applicable to the treaty recitals).
The agreement on trade in goods provides that tariff lines in the Sensitive Track shall have their applied Most Favored Nation (MFN) rates reduced or eliminated under the modalities in Annex 2.
Annex 2 (Section 3(iii)) of the TIG Agreement requires reduction of MFN rates for products in the Highly Sensitive List to not more than 50% no later than 2015 for ASEAN 6 and China.
The NEDA Board recommended on January 16, 2012 (on an ad referendum basis) tariff reduction schedules for certain tariff lines under the Highly Sensitive Lists.
Executive Order No. 71 implements the ACFTA tariff commitments by modifying duty rates on articles listed in the Annex.

Section 1 covers only the articles specifically listed in the Annex, as classified under Section 104 of the TCCP, as amended.
Section 1 applies the import duty rates shown in Column 4 of the Annex for those listed articles.
Section 2 limits the ACFTA rate treatment to China and the ASEAN 9, namely: Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Singapore, Thailand, and Viet Nam.
Section 3 applies to all articles in the Annex that are entered into, or withdrawn from warehouses in the Philippines for consumption, from the date of effectivity.

Section 1 provides that the listed Annex articles shall be subject to the import duty rates indicated in Column 4 of the Annex.
Section 2 provides that for China and the ASEAN 9, the applicable rate is the ACFTA rate.
Section 2 requires submission of the proper Certificate of Origin (CO) Form E to apply the ACFTA rate.
Section 2 empowers the Tariff Commission, upon request, to issue tariff classification rulings to confirm the applicable rates of duty of particular products subject to Section 2, under Section 1313(a) of the TCCP, as amended.
Section 3 mandates that from the date of effectivity, articles in the Annex entered into or withdrawn from warehouses in the Philippines for consumption shall be imposed the rates of duty prescribed in the Annex, subject to compliance with the Rules of Origin under Article 5 of the TIG Agreement.

Section 2 makes acceptance of the ACFTA rate contingent on submission of the proper CO Form E.
Section 3 ties imposition of the Annex duty rates to compliance with the Rules of Origin under Article 5 of the TIG Agreement.
Section 3 applies the origin-sensitive duty regime to importation events occurring from the date of effectivity of the Executive Order.

Section 4 preserves the Philippines’ ability to invoke its right of recourse.
Section 4 allows recourse to all trade remedy measures provided for in Philippine laws, the TIG Agreement, and other relevant international agreements.
Section 4 characterizes trade remedies as an effective device against import surges.
Section 4 states that no provision in the Executive Order limits or precludes this recourse.

Section 5 repeals, amends, or modifies inconsistent issuances, orders, rules, and regulations, or parts thereof, to the extent of inconsistency with Executive Order No. 71.
Section 6 provides separability: if any provision is declared invalid or unconstitutional, the remaining provisions remain valid and subsisting.
Section 7 provides that Executive Order No. 71 takes effect immediately upon publication in a newspaper of general publication.