asean japan




Access to a large and potential growing market

The AJCEP enabled the business from ASEAN and Japan to gain access to a big and potential regional market of 752.4 million people, GDP of 7.29 trillion and averaged GDP per capita of $20,640 (PPP). With huge market access through tariff concessions and cumulative rules of origin, consumers would have greater choice of products with competitive prices.

Tariff Reduction and Elimination

With regard to Trade in Goods , tariff elimination for products in Parties’ Normal Track should be completed within 10 years from the entry into force of the Agreement for Japan, ASEAN-6 and Viet Nam, and 13 years for CLM (Cambodia, Lao, Myanmar). Given the different level of development among AJCEP Parties, the thresholds for tariff elimination also varies: 92% for Japan and 90% for ASEAN-6 and Viet Nam based on tariff lines and trade value; and 90% for CLM based on either tariff line or trade value.

For goods under the Highly Sensitive List, Sensitive List and Exclusion List, the modality varies and the tariff cuts were negotiated bilaterally between ASEAN Member States and Japan.

Rules of Origin

Trade facilitating rules of origin (ROO) have been established under the AJCEP that would help encourage regional cumulation of inputs not only benefitting ASEAN industries but also Japanese companies who are operating and have huge investments in ASEAN countries.

The AJCEP’s ROO has a “general rule” of RVC (Regional Value Content) 40% or CTH (Change in Tariff Heading), thereby providing flexibility for exporters/manufacturers in choosing the rule to apply and increasing their chances of complying with the ROO to avail of the preferential tariff treatment.

Liberalized Investment and Services Commitments

A comprehensive Chapter on Trade in Services, which would improve the commitments and obligations on services trade, and Chapter on Investment, which would promote, protect, facilitate and liberalize investment in the region, are being currently being negotiated.

Economic Cooperation

Under the Agreement, both ASEAN and Japan have initiated several economic cooperation projects including capacity building, technical assistance, in areas of mutual interest in order to liberalize and facilitate trade and investment.