ASEAN CHINA Free Trade Area Preferential Tariff Certificate of Origin

ASEAN-CHINA Free Trade Area (ACFTA) Preferential Tariff Certificate of Origin can be applied to China and the following countries: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.

Brief history of ASEAN- CHINA Free Trade Area (ACFTA):

  • 2002-2010: November of 2002, the ASEAN-China Framework Agreement on Comprehensive Economic Cooperation was signed by both parties, tariff was slashed and on January 1st of 2010, the full establishment of ASEAN-China Free Trade Area (ACFTA) has provided a strong foundation for the enhancement of ASEAN-China economic relations[1]. And in 2010, for 93 % of ASEAN products, the tariff had fallen to zero.
  • 2011-2015: Fully established free trade zone: when Vietnam, Laos, Cambodia and Myanmar trade with China, most of products have zero tariffs. In the same time, both parties have reached broader and deeper markets in service, trade and investment. To catch the current regional and global economic landscape, the Protocol to Amend the Framework Agreement on Comprehensive Economic Co-Operation between ASEAN and China was signed on 22 November 2015 at the 27th ASEAN Summit.
  • After 2016: Improving and consolidating the Free Trade Zone (FTZ). The upgrading of the ACFTA aims to further streamline and enhance economic cooperation, including amendments to the agreement on Trade in Goods, Services, Investment and Economic and Technical Cooperation (ECOTECH)[2].

 Goals of ASEAN- CHINA Free Trade Area (ACFTA):

  1. To promote the cooperation between enterprises in China and ASEAN.
  2. To promote the connection of trade and investment between enterprises in China and ASEAN.
  3. To promote the economic development of the respective countries and the establishment of ASEAN- CHINA Free Trade Area (ACFTA).

Building ASEAN-CHINA Free Trade Zone (ACFTZ) is a historical step of the cooperation relations between ASEAN and China. It is a new milestone in the development of ASEAN – CHINA relations that represents not only the good willing of building good-neighborly and friendly relations but also the strengthening economic ties.

The establishment of ASEAN-China Free Trade Zone (ACFTZ) will create an economic zone that has approximately 1.8 billion of consumers, 2 trillion USD of gross domestic products and 1.2 trillion USD of total volume of trade. It is the biggest Free Trade Zone (FTZ) in the world in terms of population; it is the biggest Free Trade Zone (FTZ) in the development world that is jointly created by 10 countries in ASEAN and China; it is the third biggest Free Trade Zone (FTZ) after NAFTZ (North America Free Trade Zone) and EU in terms of economy of scale.

Preferential Certificate of Origin

A Non-Preferential Certificate of Origin, often abbreviated to C/O or CoO, is the most common type of Certificates of Origin, there is no preferential treatment such as tariff concession nor any particular Bilateral / Multilateral Free Trade Agreement (FTA). A Non-Preferential Certificate of Origin´s main uses are various: the proof of customs collection and other fields such as trade statistics, supporting measure, discriminatory quantity limits, anti-dumping, anti-subsidy and government procurement, etc.

While the Preferential Certificate of Origin is authorized by the Trade Cooperation and Industry Coordination Section of MITI (Ministry of International Trade and Industry); it is a document attesting that goods in a particular shipment are of a certain origin under the definitions of a particular Bilateral/ Multilateral Free Trade Agreement (FTA)[3].  This certificate is required for the respective customs authorities to decide if the imported product should benefit from preferential treatment in accordance with special trading area such as Free Trade Zone (FTZ) or customs unions such as ASEAN, North America Free Trade Agreement (NAFTA) or EU.

In short, the main difference is Non-Preferential Certificate of Origin does not allow the beneficial country to have tariff concession while Preferential Certificate of Origin does.

[1] Ministry of International Trade and Industry

[2] Malaysia ‘s Free Trade Agreements

[3] “Introduction – European Commission”. ec.europa.eu.