Tariff Reduction under ACFTA Early Harvest Program

The tariff adjustments are made under the President’s authority under Section 402 of the Tariff and Customs Code of 1978 (PD 1464), as amended, which empowers the President—upon recommendation of the National Economic and Development Authority (NEDA)—to increase, reduce, or remove existing protective rates and to modify the form of duty.
The tariff reduction commitment is anchored on the Framework Agreement on Comprehensive Economic Cooperation between ASEAN and the People’s Republic of China, signed on 4 November 2002 in Cambodia (WHEREAS clauses).
The Early Harvest Programme is a commitment under Article 6 of the ASEAN–China Framework Agreement, with commencement and end in accordance with set timeframes (WHEREAS clauses).
A Memorandum of Understanding (MOU) between the Philippines and China on the Early Harvest Programme under the Framework Agreement is dated 27 April 2005 (WHEREAS clauses).
The MOU provides that the Philippines and China agreed to eliminate tariffs of certain products by 1 January 2006 (WHEREAS clauses).
The NEDA Board approved—during its meeting on 20 December 2005—the grant of zero tariffs on 214 tariff lines in compliance with the MOU (WHEREAS clauses).

The executive policy is to implement the commitment to reduce tariff rates on certain products to zero percent under the Early Harvest Programme of the ASEAN–China Free Trade Area (preamble).
The order implements tariff concessions for covered products through the ACFTA rates and applies them consistently with the Framework Agreement’s Early Harvest commitments (WHEREAS clauses; Section 1).
The tariff application is conditioned on compliance with Rules of Origin under the Framework Agreement’s Agreement on Trade in Goods (Section 2).

The duty rates apply to articles specifically listed in Annex “A” (“Articles Granted Concessions Under the Early Harvest Programme of the ASEAN a China Free Trade Area”) and Annex “B” (“Specific Products Granted Concessions Under the Early Harvest Programme of the ASEAN a China Free Trade Area Pursuant to Article 6(3)(a)(iii)”) (Section 1).
The covered articles are those as classified under Section 104 of the Tariff and Customs Code of 1978, as amended (Section 1).
The ACFTA tariff treatment is applied using the tariff schedules shown in Column 4 of Annexes “A” and “B” (Section 1).
The ACFTA rates in the annex schedules are granted to imports from the parties of the Framework Agreement that are applying a tariff concession to the same product under Article 6 of that Framework Agreement (Section 1).

As of the date of effectivity of the order, covered articles listed in Annexes “A” and “B” are imposed with the rates of duty prescribed in those annexes upon entry for consumption (Section 2).
Coverage for import timing is determined by entry into or withdrawal from warehouses in the Philippines, specifically articles entered into or withdrawn from warehouses in the Philippines for consumption (Section 2).
The application of the prescribed duty rates under the Early Harvest program is expressly conditioned on compliance with Rules of Origin provided for in Article 5 of the Agreement on Trade in Goods of the Framework Agreement signed on 29 November 2004 (Section 2).

All presidential issuances, administrative rules and regulations, or parts thereof that are contrary or inconsistent with this Executive Order are repealed or modified accordingly (Section 3).

Section 4 provides that the Executive Order takes effect immediately following its complete publication in two (2) newspapers of general circulation in the Philippines.