ASEAN: It is not easy for textiles and apparel to say "tax exemption"

According to the "China-ASEAN Free Trade Area Framework Agreement", between China and 6 ASEAN member countries (Brunei, Philippines, Indonesia, Malaysia, Thailand and Singapore), there will be zero tariffs on more than 90% of products. China’s average tariff on ASEAN will be reduced from 9.8% to 0.1%, and the average tariff rate of China’s six old member countries on ASEAN will be reduced from 12.8% to 0.6%. The four new member states of ASEAN (Vietnam, Laos, Cambodia and Myanmar) will also achieve zero tariffs on products by 90% in 2015.

However, for some sensitive products set up in China and the 10 ASEAN countries, it is not known whether the companies are also aware of them. The final tax rate for these products is not zero. According to the national conditions of the country, 10% of no more than 400 (6 old ASEAN countries) and 500 (4 new ASEAN countries) products are protected as sensitive products.

Judging from the current list of sensitive products proposed by the ASEAN countries and 10 countries, textiles and clothing are not only "listed on the list", but also a restricted focus. Take Indonesia as an example, Indonesia’s Minister of Industry once stated that although Indonesia will not try to renegotiate a free trade agreement that has been reached, it has requested to postpone the cancellation of import duties on 314 kinds of Chinese products in eight industries, of which 87 items are involved in the textile industry. Textile is the industry with the most restricted projects except for the steel industry. In Thailand, 28 products including synthetic women's tops, pants, men's shirts, cotton men's sleepwear, cotton and chemical fiber bathrobes, baby clothes, pantyhose, and socks are listed as sensitive products. According to the plan, these products are The import tariff rate will drop to 20% by 2012 and to 5% by 2018.

There are indications that most apparel products can hardly achieve “zero tariffs” according to the normal process, but this is to provide sufficient preparation time for apparel companies that are not yet ready.

First of all, garment companies should keep abreast of the timetable for opening up markets in China and ASEAN, know which products are zero-tariff, and understand the timetable to help seize business opportunities. Second, we must pay attention to the changes and industrial orientation of ASEAN countries’ economic policies. We can use specialized agencies to obtain business information on ASEAN. In addition, the economic development level and market characteristics of ASEAN countries are different. Apparel companies should do a good job of research before entering the market and develop markets for the specific conditions of different countries.