Non-tariff barriers hurdle for Asean community targets

The Business Times July 1, 2019

WITHOUT a stronger focus on tackling non-tariff barriers, Asean will not accomplish the objectives of the Asean Economic Community (AEC) and will fail to meet the targets in the AEC Blueprint 2025, warns a June 22 report.

Jointly commissioned by the European Union-Asean Business Council (EU-ABC) and the Asean Business Advisory Council (Asean BAC), the report examines non-tariff barriers in the region’s automotive, agri-food, and healthcare sectors. It sets out Asean-level recommendations for tackling non-tariff barriers in these sectors as well as in general.

In the automotive market, regional firms face challenges due to controls in the form of quotas and licensing; complex conformity assessment procedures; unique national standards; high taxation regimes; and discriminatory policies favouring local manufacturers.

In agri-food, three types of products were studied: alcohol, seafood, and biscuits.

  • Alcohol: A rising middle class and growth in alcohol sales and consumption mean significant opportunities for alcoholic drinks manufacturers. But these are undermined by high levels of taxation – often associated with counterfeit trade – as well as complex licensing procedures, increasingly burdensome labelling requirements, and marketing restrictions.
  • Seafood: Firms interviewed did not face major obstacles to trade, but did note inconsistencies during customs procedures, and strict conformity assessment and product registration procedures.
  • Biscuits: While facing relatively lighter regulation, the Asean biscuit sector still struggles with inconsistencies in customs clearance, complicated product registration processes, and national halal certification standards.

In healthcare, the fast-growing pharmaceuticals sector is hampered by an underdeveloped intellectual property regime; inconsistent, discriminatory and opaque government procurement processes; and limited access to public pharmaceuticals markets. The medical devices sector faces fewer obstacles, through these include new product registration requirements, a lack of access and transparency in public procurement procedures, and issues around halal laws.SEE ALSO: Additive manufacturing offers collaboration opportunities across Asean

The report sets out several Asean-level recommendations. These include:

  • Creating improved systems for collecting information on non-tariff measures and barriers, for instance through an open database system.
  • Developing an institutional body or frameworks to track and tackle non-tariff barriers.
  • Continued harmonisation of standards, alongside capacity-building to help member states and firms meet those standards.
  • Working with the private sector to identify, eliminate, and conduct compliance reviews of non-tariff barriers

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