CCTV.com, January 14 According to the website of the Ministry of Commerce, on January 13, the fourth Ministerial Council of the Asia-Pacific Trade Agreement was held in Bangkok, Thailand. The members of the Agreement, China, India, South Korea, Sri Lanka, Bangladesh, Laos and Mongolia, which is preparing to join the Agreement, all sent high-level delegations to attend the meeting. At this meeting, representatives of the six member countries of the Agreement jointly signed the outcome document of the fourth round of tariff reduction negotiations - the Second Amendment to the Asia-Pacific Trade Agreement. The meeting issued the Ministerial Declaration, announcing the launch of substantive negotiations in the fields of trade facilitation, investment and trade in services under the Agreement, and strived to launch the fifth round of tariff reduction negotiations within the year. The meeting also decided to establish the Business Association of the Agreement to promote further improvement of the level of trade and investment liberalization and facilitation in the region. Recently, the head of the International Department of the Ministry of Commerce accepted an interview with reporters and interpreted the results of this Ministerial Council.

Q: Please introduce the overall situation of the Asia-Pacific Trade Agreement.

Answer: The predecessor of the Asia-Pacific Trade Agreement was the Bangkok Agreement signed in 1975. It is a preferential trade arrangement reached between developing countries under the auspices of the United Nations Economic and Social Commission for Asia and the Pacific to promote South-South cooperation. It is one of the earliest preferential agreements in the Asia-Pacific region. The members of the Agreement are all developing member countries of the ESCAP, and the secretariat function is undertaken by the ESCAP located in Bangkok, Thailand. Since the establishment of the Agreement, four rounds of tariff reduction negotiations have been held, which have effectively promoted the long-term stable and healthy development of economic and trade relations among members and become a good cooperation paradigm of mutual benefit, reciprocity and win-win cooperation among developing countries.

Currently, the members of the Agreement include China, India, South Korea, Sri Lanka, Bangladesh, Laos, and Mongolia is fulfilling the Chinese approval procedures and will soon join. The members of the Agreement span the two major world economic growth poles of East Asia and South Asia, with a huge market of 2.8 billion people. It is a regional preferential trade arrangement with unique advantages in the Asia-Pacific region.

Q: Please introduce China's participation in the cooperation of the Asia-Pacific Trade Agreement.

Answer: China officially announced its application to join the Bangkok Agreement in 1994. Since 1997, China has conducted bilateral negotiations with each member country to join the Agreement, and officially joined the Bangkok Agreement in May 2001. The Agreement is the first preferential trade arrangement that China has participated in, and it is also the only preferential trade agreement that China currently covers East Asia and South Asia and is implementing.

Since the implementation of the third round of tariff reduction results in 2006, the scope of benefiting goods has been greatly expanded, which has had a positive impact on expanding trade between China and the members of the Agreement. From 2001 to 2015, the bilateral trade volume between China and other members of the Agreement expanded from US$41 billion to US$369.6 billion, an increase of nearly 9 times. Among them, China's exports to other members of the Agreement expanded from US$15.9 billion to US$179.3 billion, an increase of about 11 times, and imports expanded from US$25.1 billion to US$190.3 billion, an increase of about 8 times. At the same time, the number of preferential certificates of origin issued under the Agreement in 2015 ranked second among the regional trade agreements signed by China, and the value of imports of goods benefited ranked third, with significant benefits to enterprises.

Q: What are the main contents of the Ministerial Declaration issued by the Ministerial Council of the Agreement?

A: At this Ministerial Council, representatives of the participating countries of the Agreement jointly issued the Ministerial Declaration, which mainly includes the following contents: First, the announcement of the end of the fourth round of tariff reduction negotiations; second, the announcement of the launch of substantive negotiations in the three areas of trade facilitation, investment and trade in services; third, the announcement of striving to launch the fifth round of tariff reduction negotiations within 2017 and explore the possibility of cooperation in new areas; fourth, Mongolia is welcomed to join the Agreement as soon as possible and promote the continued expansion of the Agreement; fifth, it is agreed to establish the Business Association of the Agreement. In addition, the Ministerial Declaration also mentioned the promotion of preferential trade data exchange, the encouragement of the issuance of electronic certificates of origin, and the promotion of green trade and investment. The Ministerial Declaration reflects the work done by the member states in recent years to promote the development of the Agreement and points out the direction for the next step and future development of the Agreement.

Q: Please introduce the background, main content and significance of the fourth round of tariff reduction negotiations of the Agreement.

A: In order to further improve the level of trade liberalization in the region, the member states of the Agreement launched the fourth round of tariff reduction negotiations in October 2007. After nine years of arduous consultations, it was finally officially concluded in August 2016. Representatives of the member states signed the outcome document of the fourth round of negotiations - the Second Amendment to the Asia-Pacific Trade Agreement at the Fourth Ministerial Council.

The Amendment reflects the results of the fourth round of negotiations of the Agreement. It is nearly 400 pages long and mainly includes the tariff reduction commitments of the member states and the optimization of the rules of origin. The Amendment is an important achievement completed by the members of the Agreement after nine years. It enriches, improves, supplements and enhances the Agreement and reflects the common desire and practical needs of the members of the Agreement to deepen and expand economic and trade cooperation. The conclusion and signing of the Amendment will provide new impetus for the economic development of the member countries of the Agreement, and will promote the regional economic integration of Asia and the construction of the Belt and Road Initiative.

Q: What improvements are there in the Amendment in terms of tariff concessions?

A: According to the results of the fourth round of tariff concession negotiations, the six member countries of the Agreement have pledged to reduce tariffs on 10,312 tariff items, which are applicable to all members and are called general concessions. The total number of tariff reductions has increased by 2.5 times compared with the third round of negotiations, with an average tariff reduction ratio of more than 28% and an average tariff reduction rate of 33%. The least developed countries Bangladesh, Laos and the small economy Sri Lanka can enjoy certain flexibility. In addition, the member countries unilaterally grant preferential tariff arrangements for a total of 1,259 products to the least developed countries in the Agreement, Bangladesh, and 1,251 products to Laos on a voluntary basis, which are called special concessions, with average tariff reductions of 86.4% and 86.2% respectively.

Specifically, China's general concession list includes 2,191 tariff items (calculated according to the 2012 tariff schedule, the same below), mainly including fish, vegetables, tea, chemical products, textiles and clothing, footwear, steel products, motor vehicle parts, machinery, electronics and instruments and meters. The special concession list includes 181 preferential tariff products for Bangladesh and Laos.

South Korea's general concession list includes 2,797 tariff items, mainly including fish, flowers, mineral products, chemical products, leather products, textile products, steel products, machinery products, etc. The special concession list includes 951 preferential products for Bangladesh and 943 preferential products for Laos.

India's general concession list includes 3,142 tariff items, mainly including animal products, oilseeds, mineral products, chemical products, rubber products, textile products, base metal products, machinery products, etc. The special concession list includes 48 preferential products for Bangladesh and Laos.

The general concession lists of Sri Lanka, Bangladesh and Laos include 585, 598 and 999 tariff items respectively, mainly including fishery products, fruits, spices, food, mineral products, chemicals, plastics and their products, leather products, wood and paper products, textile products, steel products, mechanical products, etc. Sri Lanka's special concession list includes 75 preferential products for Bangladesh and Laos. Bangladesh's special concession list includes 4 preferential products for Laos. Laos has not submitted a special concession list.

Q: When will the tariff reduction results of the parties in the "Amendment" be implemented?

A: In order to promote the early benefits of enterprises, the member states of the "Agreement" agree to speed up the implementation of Chinese procedures and make relevant technical preparations. Strive to implement the concession results of the parties to the "Amendment" on July 1, 2017.

Q: Did Mongolia make relevant commitments in the fourth round of tariff reduction negotiations of the "Agreement"?

Answer: At the second ministerial council meeting held in Beijing in October 2007, the ministers of the member states unanimously agreed to the secretariat's proposal to assist interested countries to join the Agreement. At the invitation and support of China, Mongolia, as an observer country, submitted a bid list for the fourth round of negotiations and reached an agreement with all parties. In October 2013, the member states agreed in principle at the 42nd Standing Committee meeting that Mongolia would join the Agreement. Mongolia also sent a representative to attend the ministerial council meeting this time. It is understood that Mongolia is currently speeding up the implementation of China's approval procedures. Once completed, it will formally join the Agreement and implement the results of the fourth round of tariff reductions as soon as possible.

According to the consensus reached between Mongolia and other members of the Agreement, Mongolia enjoys certain flexibility in the fourth round of tariff reduction negotiations. According to the negotiation results, Mongolia's general reduction list includes 366 tariff items, mainly including fishery products, vegetables and fruits, animal and vegetable oils, mineral products, chemicals, wood, cotton yarn, chemical fibers, mechanical products, transportation equipment, etc., with an average tariff reduction of 24.2%. Mongolia did not submit a special concession list.

Q: What are the contents of the Amendment in optimizing the rules of origin?

A: In order to further enhance the implementation effect of the tariff reduction commitments of the Agreement, the member states have optimized the rules of origin, mainly including: First, by adding two new annotations, the two terms "cumulative components" and "direct transportation" are explained respectively, further clarifying the definition of cumulative components of origin and the definition of direct transportation terms through third-party transit, so that enterprises can better use the rules of origin to enjoy corresponding benefits; second, for the first time, a list of rules of origin for specific products was added to the Agreement, covering 155 4-digit tariff number products. On the basis of the original single "regional value-added" standard, the "4-digit tariff line change" standard can be applied, involving beverages, mineral fuels, organic chemicals, plastics and their products, synthetic rubber, steel and other products, making the application of the rules of origin of the Agreement more scientific and flexible.

Q: Did the Ministerial Council launch new tariff reduction negotiations?

Answer: After the fourth round of tariff reduction negotiations, the level of trade liberalization in the Agreement has been further improved, with the average tariff reduction ratio and average tariff reduction rate reaching 28% and 33% respectively, but there is still much room for improvement compared with other free trade agreements. Before this ministerial council, all member states were positive about launching the fifth round of tariff reduction negotiations as soon as possible, but no agreement has been reached on the specific launch time. At this ministerial council, ministers from member states discussed the future development direction of the Agreement and focused on the launch of the fifth round of tariff reduction negotiations. All parties agreed to obtain China's authorization as soon as possible and strive to launch the fifth round of tariff reduction negotiations within 2017 to further enhance the level of liberalization in the Agreement.

Question: In addition to market access for goods trade, does the Agreement involve negotiations in other areas?

Answer: In line with the new trend of rapid development of free trade agreements in the Asia-Pacific region, the Agreement is working hard to expand the scope of negotiations and expand areas of cooperation. In December 2009, the ministers of the member states of the Agreement signed the Framework Agreement on Trade Facilitation, the Framework Agreement on Investment Protection, Promotion and Liberalization and the Framework Agreement on Promoting the Development and Liberalization of Trade in Services at the third ministerial council meeting held in South Korea. According to the relevant provisions of the above-mentioned framework agreements, substantive negotiations in the fields of trade facilitation, investment and trade in services can be launched by consensus of the member states. In October 2013, the member states reached an agreement at the 42nd Standing Committee to announce the launch of the above-mentioned negotiations at the fourth ministerial council meeting.

At this ministerial council meeting, representatives of the member states of the Agreement formally announced the launch of substantive negotiations in the fields of trade facilitation, investment and trade in services under the above-mentioned framework agreements, and instructed the Standing Committee of the Agreement to establish corresponding working groups and promote relevant negotiations. As the economic and trade relations between the members of the Agreement become increasingly close, we believe that the Agreement will cover more areas and gradually form a more comprehensive and higher-level regional trade arrangement.

Q: The ministerial council also agreed to establish the Business Association of the Agreement. Please introduce the relevant situation.

Answer: The topic of discussing the establishment of a business association under the Agreement was raised by Sri Lanka at the 48th Standing Committee Meeting, suggesting that it be jointly formed by official business associations of each member country to promote the implementation of the Agreement and economic and trade cooperation among members. After in-depth discussions, all member countries believed that the establishment of a business association under the Agreement would help enterprises of each member country to better utilize the preferential policies under the Agreement, improve the implementation effect of the Agreement, promote personnel exchanges, and push the economic and trade cooperation of all parties to a new level. On this basis, the Ministerial Council agreed to establish a business association under the framework of the Agreement, and instructed the experts of business associations of each member country to conduct in-depth consultations on the specific details of the functions, composition, operation and other specific details of the business association under the Agreement, and strive to reach a consensus as soon as possible.

Q: What channels can be used to learn more about the Asia-Pacific Trade Agreement and the Second Amendment to the Asia-Pacific Trade Agreement?

A: We will update the relevant information of the Agreement and the Amendment on the China Free Trade Zone Service Network (fta.mofcom.gov.cn) in a timely manner to promote enterprises to use the preferential measures of the Agreement. Welcome to log on to the China Free Trade Zone Service Network for relevant information.

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