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WHEREAS, the Framework Agreement on Comprehensive Economic Cooperation (Framework Agreement) Between the Association of South East Asian Nations (ASEAN) and the People’s Republic of China (China) was signed by the Heads of Government/State of the ASEAN Member States and China on 4 November 2002 in Cambodia;

WHEREAS, Articles 2(a), 3(1), and 8(1) of the Framework Agreement reflect the Parties’ commitment to establish the ASEAN – China Free Trade Area (ACFTA) covering trade in goods by 2010 for ASEAN 6 and China, and by 2015 for the newer ASEAN Member States;

WHEREAS, the Agreement on Trade in goods of the Framework Agreement was signed by the Economic Ministers of the Parties on 29 November 2004 in Laos;

WHEREAS, Article 3(2)(a) of the Agreement on Trade in Goods of the Framework Agreement provides that tariff lines placed in the Normal track by each Party shall have their respective applied MFN tariff rates gradually reduced and eliminated in accordance with the modalities set out in Annex 1^* of the Agreement with the objective of achieving the targets prescribed in the thresholds therein;

WHEREAS, the aforesaid Annex 1 of the Agreement on Trade in Goods of the Framework Agreement provides that ASEAN 6 and China shall implement the following tariff reduction schedule for products in the Normal Track by 1 July 2005: (a) applied MFN tariff rates above 20% shall be reduced to 20%; (b) applied MFN tariff rates from 15% to 19% shall be at 15%; (c) applied MFN tariff rates from 10% to 14% shall be at 10%; (d) applied MFN tariff rates from 6% to 9% shall be reduced to 5%; and (e) applied MFN tariff rates from 0% to 5% shall be maintained;

WHEREAS, the NEDA Board approved during its meeting on 20 December 2005 the reduction in tariff rates on 1,124 tariff lines in compliance with the modalities set out in the Agreement on Trade in Goods of the Framework Agreement;

WHEREAS, Section 402 of the Tariff and Customs Code of 1978 (PD 1464), as amended, empowers the President of the Republic of the Philippines, upon the recommendation of the National Economic and Development Authority, to increase, reduce or remove existing protective rates of import duty, as well as to modify the form of duty;

NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the Republic of the Philippines, by virtue of the powers vested in me by law, do hereby order:

 

SECTION 1. The articles specifically listed in Annex “A”^**  (Articles Granted Tariff Concession Under the Normal Track of the ASEAN – China Free Trade Area) hereof, as classified under Section 104 of the Tariff and Customs Code of 1978, as amended, shall be subject to the ACFTA rates in accordance with the schedule indicated in Columns 4-7 of Annex “A”^**. The ACFTA rates so indicated shall be accorded to imports coming from the parties of the agreement on Trade in Goods of the Framework Agreement applying tariff concession to the same product pursuant to Article 3 of the Agreement on Trade in Goods of the Framework Agreement.

 

SECTION 2. In the event that any subsequent change is made in the basic (MFN) Philippine rate of duty on any of the articles listed in Annex “A”^** to a rate of duty lower than the rate prescribed in Columns 4-7 of Annex “A^** such article shall automatically be accorded the corresponding reduced duty.

 

SECTION 3. From the date of effectivity of this Order, all articles listed in Annex “A” entered into or withdrawn from warehouses in the Philippines for consumption shall be imposed the rates of duty therein prescribed subject to compliance with the Rules of Origin as provided for in Article 5 of the Agreement on Trade in Goods of the Framework Agreement.

 

SECTION 4. All presidential issuances, administrative rules and regulations, or parts thereof, which are contrary or inconsistent with this Executive Order are hereby repealed or modified accordingly.

 

SECTION 5. This Executive Order shall take effect immediately following its complete publication in two (2) newspapers of general circulation in the Philippines.

Adopted: 12 Jan. 2006

(SGD.) GLORIA MACAPAGAL-ARROYO

By the President:

(SGD.) EDUARDO R. ERMITA
Executive Secretary

^* Not Filed with ONAR.

^** Text Available at Office of the National Administrative Register, U.P. Law Complex, Diliman, Quezon City.