Another “race to zero”: ASEAN non-tariff barriers?

ASEAN has pursued an ambitious plan for regional economic integration for almost 15 years, since the publication of the ACS first master plan in November 2007. One of the key principles of the ASEAN economic community is to do of ASEAN a huge and dynamic single market and production base. , harmonizing standards and removing tariff and non-tariff barriers to intra-ASEAN trade.

Although there has been excellent progress on eliminating tariffs, non-tariff barriers to trade have increased over the years. Despite the repeated recognition by ASEAN leaders and ministers of economics in various projects, agreements, master plans and work plans of the need to eliminate non-tariff barriers, since 2015 there has been an increase nearly 60% of non-tariff measures.

Although almost ignored, at the last ASEAN Economics Ministers (MEA) meeting in September, there was a sign that ASEAN may now be ready to seriously tackle non-tariff barriers (BNT ). Ministers approved a “Toolkit on Cost-Effectiveness of Non-Tariff Measures”, the number one priority economic product for Brunei during its ASEAN presidency this year. The toolkit has been designed specifically for the region to enable ASEAN member states to review existing non-tariff measures (NTMs) and identify those that are in fact NTBs.

In their joint statement after the MEA meeting in September, ministers said of the NTM toolkit that it would “encourage the adoption of good regulatory practices aimed at simplifying import requirements and procedures, to ultimately stimulate exports in the region “.

They also “underlined the importance of the toolkit as a guideline for managing NTMs affecting the smooth flow of goods in the region and encouraged the AMS (ASEAN Member States) to make full use of this toolbox “.

Source: Miscellaneous

Not all NTMs are BNTs. For example, those created for genuine public health and safety reasons. NTBs are NTMs that deliberately distort markets and increase costs for producers and consumers. They take various forms: complex bureaucracy, discriminatory authorizations, licenses, quotas and fees.

Examples of BNT can be found in everything from automotive to food, pharmaceutical and medical products to electronics, and from household appliances to toys. They range from quantitative restrictions (i.e. limits on import volumes) to price controls (such as minimum import prices), non-automatic import licensing and enforcement. spurious sanitary and phytosanitary measures.

Often designed to protect domestic industry from competition, NTBs have the effect of limiting innovation, isolating domestic industries from the need to modernize their products and services, and also restraining investment. Thus, NTBs act to the long-term detriment of the imposing country, its industry and its consumers.

In individual ASEAN countries, NTBs also risk regional competitiveness and job creation as they discourage investment in developing regional supply chains to serve global export markets. In some cases (like automotive safety standards or food labeling), NTBs could actually harm public safety by delaying new, safer technologies.

The new toolkit, however, holds the potential for hope.

Although the use of the toolkit is not mandatory, nor is it mandatory to report on its use, we look forward to the AMS taking this opportunity to show its true commitment to the elimination of NTBs in the region by implementing toolkit and reporting results regularly. .

As the world awaits COP26 in Glasgow and a ‘race to zero’ in carbon emissions, we hope ASEAN member states start a ‘race to zero’ for NTBs from this year.

It will be a long road to the complete elimination of NTBs, but the rewards along the way will be great – more intra-ASEAN trade, greater competitiveness, and a more sustainable recovery from the pandemic.

ASEAN needs a “race to zero” in NTBs to realize its potential as a dynamic and progressive trade bloc and to create the jobs of the future.

The opinions expressed in this article are those of the author and do not necessarily reflect those of The ASEAN Post.

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