Non-tariff barriers hurdle for Asean community targets

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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.
JULY 01, 2019 - 5:50 AM

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.

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Market voices on:

  • 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.

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.
     
  • This article first appeared at aseanbusiness.sg, the go-to portal for business guides, information and resources by The Business Times, for all with an interest in Asean. Other articles exclusive to Asean Business that were published over the past week include a report on the electric vehicle market and an opinion piece by Citi on why Asean offers a silver lining to the dark clouds that hover over the horizon. For a peek at what we are doing on Asean Business, stay tuned every Monday. Better yet, head over to aseanbusiness.sg to keep an eye on the region.