04 July 2005 00:01 [Source: ICB Americas]
As of July 20, China and the Association of Southeast Asian Nations (Asean) will reduce tariffs on more than 7,000 industrial goods, including petrochemicals, under the China Asean Free Trade Agreement (Cafta), according to China’s Ministry of Commerce (MoC).
The pact with the 10 Asean members was reached in November 2004. China will first form a free trade zone with the six older Asean members—Thailand, Brunei, Indonesia, Malaysia, the Philippines and Singapore—by January 1, 2010. It will form a free trade zone with the rest by January 1, 2015.
The products included in the Cafta are divided into three categories: normal, sensitive and highly sensitive. Tariffs on 40 percent of those under the normal track will be reduced to 0 to 5 percent by July 1, 2005, with 20 days given for review. By January 1, 2007, at least 60 percent of these products will be taxed at 0 to 5 percent. All tariffs will be eliminated by January 1, 2010, but a two-year provision has been provided for possible extension.
China’s import list for chemical products on the normal track include naphtha, kerosene, acrylic acid esters, terephthalic acid, polypropylene, polystyrene, acrylonitrile butadiene styrene and polyvinyl chloride.
Every Asean member has a different import list. For the newer Asean members, the tariff rates for at least 50 percent of the products on the normal list should be reduced to 0 to 5 percent by 2009–2010. Different timelines have been set for each country. The goal is to eliminate all tariffs by January 1, 2015, but a three-year provision has been provided for possible extension.
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