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ASEAN-Korea Free Trade Area ( AKFTA

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lorraine penilla

on 30 September 2014

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Transcript of ASEAN-Korea Free Trade Area ( AKFTA

ASEAN-Korea Free Trade Area
AKFTA
The Framework Agreement on Comprehensive Economic Cooperation (Framework Agreement) between the Association of South East Asian Nations (ASEAN) and Korea was
signed
by the Heads of Government/State of the ASEAN Member States and Korea on
13 December 2005 in Kuala Lumpur, Malaysia.
Implementing Executive Orders
The following E.O.s implement the Philippines’ tariff commitments under the AKFTA:

(1)    E.O. 638 (s. 2007)
– Reciprocal tariff rate treatment on
tariff lines included in Sensitive Track
(2)    E.O. 639 (s. 2007); E.O. 812 (s. 2009)
– Normal Track
(3)    E.O. 895 (s. 2010)
– Transfer of refined coconut oil from the Sensitive Track to the Normal Track
(4)    E.O. 52 (s. 2011)
– Temporary waiver of reciprocal
tariff treatment on certain articles as compensatory measure
to the Republic of Korea
(5)    E.O. 73 (s. 2012)
– Highly Sensitive List

(6)    E.O. 74 (s. 2012)
– Sensitive List; Transfer of
certain tariff lines from the Sensitive Track to
the Normal Track
DESIRING to adopt
Framework Agreement on
Comprehensive Economic
Cooperation among them, that will
further promote growth and
development, increase the living
standard of the people throughout
the region and provide further
dynamic benefits to the
region
in the long term
BUILDING on their
respective rights and obligations
under the Marrakesh
Agreement Establishing the
World Trade Organisation and
the other agreements
negotiated thereunder
and other multilateral and
bilateral instruments of
cooperation to which they
are parties
TARIFF 6
CHAPTER 1 : GENERAL PROVISIONS
Article 1.1 Objectives
The objectives of this Framework Agreement are to:
(a)
 strengthen and enhance economic, trade and investment cooperation among the Parties;

(b)
 progressively liberalise and promote trade in goods and services as well as create a transparent, liberal and facilitative investment regime;

(c)
 explore new areas and develop appropriate measures for closer economic cooperation and integration;

(d)
 facilitate the more effective economic integration of the new ASEAN Member Countries and bridge the development gap among the Parties; and

(e)
 establish a cooperative framework for further strengthening the economic   relations among the Parties.
RECALLING the decision made at the ASEAN-Korea Summit held on 30 November 2004 at Vientiane, the Lao People's Democratic Republic, by the Joint Declaration on Comprehensive Cooperation Partnership between ASEAN and Korea, to establish an ASEAN-Korea Free Trade Area at an earliest stage with special and differential treatment and additional flexibility for the new ASEAN Member Countries of the Kingdom of Cambodia, the Lao People's Democratic Republic, the Union of Myanmar and the Socialist Republic of Vietnam;
BEING confident that the establishment of the ASEAN-Korea Free Trade Area will be a natural extension of their existing relations as well as a stepping stone to elevate their relationship to a higher and more comprehensive level;
REAFFIRMING  the shared belief that the arrangement for the creation of the ASEAN-Korea Free Trade Area should be based on the agreed principles of comprehensiveness in the liberalisation process, meaningful and substantial liberalisation, enhancement of mutual benefits, and consistency with WTO rules and disciplines
RECOGNISING that the removal of obstacles to trade through the creation of the ASEAN-Korea Free Trade Area will contribute to the harmonious development and expansion of world trade and provide a catalyst to broader international cooperation, in particular within East Asia;

RECOGNISING the importance of capacity building through human resource development to face challenges of globalisation; and

RECOGNISING the different stages of economic development among the ASEAN Member Countries and the need for flexibility to be given to the new ASEAN Member Countries, in particular the need to facilitate their increasing participation in the economic cooperation of the Parties and the expansion of their exports, including, inter alia, through the strengthening of their domestic capacity, efficiency and competitiveness,
Article 1.3
Measures for Comprehensive Economic Partnership
The Parties shall establish, consistent with Article XXIV of GATT 1994 and Article V of GATS, an ASEAN-Korea FTA and strengthen and enhance economic cooperation through the following:
(a) progressive elimination of tariffs and non-tariff barriers in substantially all trade in goods;

(b) progressive liberalisation of trade in services with substantial sectoral coverage;

(c) establishment of an open and competitive investment regime that facilitates and promotes investment among the Parties;

(d) provision of special and differential treatment to the ASEAN Member Countries and additional flexibility to the new ASEAN Member Countries as agreed in the  Joint Declaration on Comprehensive Cooperation Partnership between ASEAN and Korea and the core elements attached thereto;

(e)
 provision of flexibility to the Parties in the ASEAN-Korea FTA negotiations to address their sensitive areas in the goods, services and investment sectors with such flexibility to be negotiated and mutually agreed based on the principle of reciprocity and mutual benefits;

(f) 
establishment of effective trade and investment facilitation measures;

(g)
 exploration of the ways and means to expand their economic partnership into new areas and expansion of economic cooperation in areas as may be agreed among the Parties that will complement the deepening of trade and investment link among the Parties; and

(h)
 establishment of appropriate procedures and mechanisms for the purposes of effective implementation of this Framework Agreement.
Entry into Force

Three major Agreements under the ASEAN-Korea FTA have been entered into force and implemented by ASEAN andKorea.

The ASEAN-Korea Trade in Goods Agreement entered into force in June 2007

The ASEAN-Korea Trade in Services Agreement entered into force in May 2009

The ASEAN-Korea Investment Agreement entered into force in June 2009

Seven Important Facts of ASEAN-Korea Economic Relations

1. ASEAN and Korea first initiated sectoral Dialogue relations in 1989 and Korea became full Dialogue Partner of ASEAN in 1991

2 ASEAN and Korea maintain close political cooperation on bilateral, regional, and international issues through existing mechanisms such as, among others, the ASEAN Regional Forum (ARF), ASEAN Plus Three (APT), East-Asia Summit (EAS), ASEAN-ROK Summit, and Ministerial Meetings

3. ASEAN and Korea are also members of organizations such as the Asia-Pacific Economic Cooperation (APEC), East Asia-Latin America Cooperation (EALAF) and the Asia-Europe Meeting (AEM)


4. Bilateral trade volume between Korea and ASEAN nearly tripled from 2001-2010 from US$32 billion to US$98.1 billion

5. In the first year period of ASEAN Korea Trade in Goods implementation, trade volume increased over 23%

6.In 2010, Korea remains as ASEAN's fifth largest trading partner, while ASEAN was the second largest trading partner of Korea

7. Korean visitors to ASEAN countries increased several folds from 1.1 million in 1995 to 3.285 million in 2010.


Article 2.4

Most-Favoured Nation Treatment

Korea shall accord to all the ASEAN Member Countries which are not WTO members the Most-Favoured Nation Treatment consistent with the WTO rules and disciplines upon the entry into force of this Framework Agreement.


Article 2.1

Trade in Goods


1. The Parties shall progressively reduce and eliminate duties and other restrictive regulations of commerce (except, where necessary, those permitted under Article XXIV(8)(b) of GATT 1994) on substantially all trade in goods among the Parties, in accordance with the provisions, schedules and programme for the Normal Track in the Agreement on Trade in Goods under this Framework Agreement.

2. The Agreement on Trade in
Goods under this
Framework Agreement shall include,
but not limited to:

(a) detailed rules governing the progressive tariff
reduction and/or elimination programme as well as other related matters
(b) rules of origin;
(c) modification of commitments;
(d) non-tariff measures, sanitary and phytosanitary
measures, and technical barriers to trade;
(e) safeguards measures; and
(f) WTO disciplines and reduction and
elimination of non-tariff barriers.

Article 1.4
Legal Coverage and Relations to Other Agreements

1. The following agreements shall form part of legal instruments establishing the ASEAN-Korea FTA upon their respective entry into force:

(a)
this Framework Agreement (including the Annex on Economic Cooperation);

(b)
the Agreement on Trade in Goods under this Framework Agreement as provided for in Article 2.1;

(c)
an agreement on trade in services to be concluded in accordance with Article 2.2;

(d)
an agreement on investment to be concluded in accordance with Article 2.3;

(e)
the Agreement on Dispute Settlement Mechanism under this Framework Agreement as provided for in Article 5.1; and

(f)
any other agreements that may be mutually agreed by consensus and concluded by the Parties in the context of the ASEAN-Korea FTA.

2. Except as otherwise provided in this Framework Agreement, this Framework Agreement or any action taken under it shall not affect or nullify the rights and obligations of a Party under the existing agreements to which it is a party.

3. Nothing in this Framework Agreement shall prevent any individual ASEAN Member Country from entering into any bilateral or plurilateral agreement with any other ASEAN Member Countries and/or Korea relating to trade in goods, trade in services, investment, and/or other areas of economic cooperation. The provisions of this Framework Agreement shall not apply to any such bilateral or plurilateral agreement.

Penilla, Lorraine

Delapaz, Rogel
Dionisio, Clarence
Dizon, Lindslay
Laugo, Mark
Reyes, Ramil

ANNEX 1

MODALITY FOR TARIFF REDUCTION AND ELIMINATION FOR
TARIFF LINES PLACED IN THE NORMAL TRACK
ANNEX 2

MODALITY FOR TARIFF REDUCTION/ELIMINATION FOR TARIFF LINES PLACED IN THE SENSITIVE TRACK
ANNEX 3

RULES OF ORIGIN
APPENDIX 1 -- OPERATIONAL CERTIFICATION PROCEDURES
FOR THE RULES OF ORIGIN
APPENDIX 2 --PRODUCT SPECIFIC RULES
APPENDIX 2 --PRODUCT SPECIFIC RULES
Philippine Top Export to South Korea
Electrical, Electronic Equipment
Full transcript