i.) If, as a result of the implementation of this
Agreement, import of a particular product eligible under the CEPT Scheme is
increasing in such a manner as to cause or threaten to cause serious injury to
sectors producing like or directly competitive products in the importing Member
States, the importing Member States may, to the extent and for such time as may
be necessary to prevent or to remedy such injury, suspend preferences
provisionally and without discrimination, subject to Article 6(3) of this
Agreement. Such suspension of preferences shall be consistent with the GATT.
ii.) Without prejudice to existing international
obligations, a Member State which finds it necessary to create or intensify
quantitative restrictions or other measures limiting imports with a view to
forestalling the threat of or stopping a serious decline of its monetary
reserves, shall endeavor to do so in a manner which safeguards the value of the
concessions agreed upon.
iii.) Where emergency measures are taken pursuant to
this Article, immediate notice of such action shall be given to the Council
referred to in Article 7of this Agreement, and such action may be the subject
of consultation as provided for in Article 8 of this Agreement.”
Among the
factors to be considered in determining whether injury to the domestic industry
is serious are:
· decline in sales or prices;
· downward trends in production, profits, wages, or
productivity;
· inability to generate capital for modernization or maintain
existing levels of expenditures on research and development;
· inability of significant number of firms to carry out
production at a profit;
· significant idling of productive facilities including the
closure of plants or under utilization of production capacity;
· significant unemployment/ underemployment;
· significant reduction in market share as a proportion of
market demand; and
· growing inventories of subject article, whether maintained
by domestic producers, importers, wholesalers or retailers.
For threat
of serious injury, the following factors are considered:
· significant increase in imports (evidenced, among others,
by the existence of letters of credit, supply/sales contracts, awards of a
tender, irrevocable offers or other similar contracts);
· decline in sales, prices or market share and downward
trends in production, profits, wages, productivity or employment;
· inability to generate capital for modernization or maintain
existing levels of expenditures on research and development;
· sufficient freely disposable, or an imminent substantial
increase in, production capacity of foreign exporters including access
conditions they face in third country markets indicating the likelihood of
substantially increased exports to the Philippines; and
· growing inventories of subject article, whether maintained
by domestic producers, importers, wholesalers or retailers.
As has been observed, the main
vehicle for the liberalisation of trade among the 10 Asean member countries is
the CEPT scheme, whereby tariffs on products are reduced to zero to 5 percent.
A total of 44,642 products which account for almost 98 percent of total intra
Asean trade has been identified. By 2003, almost 88 percent of the products
bear no tax. The main exceptions are sensitive agricultural products and
Proton, which has been given more time- till 2005 to comply.
As a whole, AFTA, which is
consistent with World Trade Organisation (WTO) rules, aims to:
1.
Remove all quantitative restrictions and non-tariff
barriers (NTB), beginning January
1, 1996 ;
2.
Introduce greater transparency in standards and
conformance.
3.
Create a green lane system to expedite the clearance
of CEPT products, and;
4.
Intensify cooperation with dialogue partners and other
regional groupings.
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