Role of ASEAN Customs cooperation in economic integration

VCN - Customs cooperation plays a vital role in building, developing and maintaining the ASEAN Economic Community (AEC) when ASEAN becomes a single market, a common production and distribution hub in the region, through facilitating trade, free circulation of goods to realize ASEAN's deep economic integration goals.
Vietnam Customs plays important role in ASEAN Customs community Vietnam Customs plays important role in ASEAN Customs community
Vietnam Customs effectively cooperates and integrates with ASEAN Customs Vietnam Customs effectively cooperates and integrates with ASEAN Customs
ASEAN Customs: “A region of development and prosperity for all people”, “One ASEAN – One identity – One vision” ASEAN Customs: “A region of development and prosperity for all people”, “One ASEAN – One identity – One vision”
The 32rd ASEAN Directors-General of Customs Meeting (ADGCM) from June 6-8, 2023 in Pattaya, Thailand. Photo: viet Nga
The 32rd ASEAN Directors-General of Customs Meeting (ADGCM) from June 6-8, 2023 in Pattaya, Thailand. Photo: Viet Nga

Commitments on many fields

ASEAN has early built and continuously improved the legal framework, creating a foundation for strategic and long-term customs cooperation and integration in the region, including milestone documents such as: The ASEAN Customs Code of Conduct signed by the Directors General of Customs in 1983, the ASEAN Customs Agreement, the Agreement to Establish and Implement the ASEAN Single Window, Protocol Governing the Implementation of the ASEAN Harmonised Tariff Nomenclature (AHTN), Protocol on ASEAN Customs Transit System (ACTS).

The starting point for regional economic integration is the decision to establish the ASEAN Free Trade Area (AFTA) at the Fourth ASEAN Summit in 1992. In addition to tariff reduction, AFTA commitments also remove non-tariff barriers and promote trade facilitation, simplify and harmonize customs procedures to ensure trade circulation between countries.

Harmonizing customs procedures and narrowing the gap in customs management in the region based on World Customs Organization (WCO) standards is one of ASEAN's important goals. The issue of regional cooperation on customs is determined to play a very key role in supporting the construction of AFTA with the goal of facilitating trade among ASEAN Member States as well as realizing the ASEAN's long-term economic integration goals.

In 1995, the ASEAN Customs Code of Conduct was adjusted to reflect new developments in ASEAN, especially the AFTA issue. Through the Code, member states commit to facilitate intra-regional trade by simplifying and harmonizing trade procedures and enhancing regional cooperation in the field of customs.

In parallel with the Code of Conduct, the ASEAN Customs Agreement was signed at the first ASEAN Finance Ministers' Meeting on March 1, 1997 (Phuket, Thailand), to further facilitate intra-regional trade. This agreement thoroughly implements the principles of consistency, simplicity, efficiency, transparency, ease of complaint resolution and mutual support set out in the Code of Conduct.

The agreement also regulates issues of a comprehensive nature, orienting ASEAN customs cooperation and integration, such as commitments to harmonize customs procedures and comply with the GATT Valuation Agreement of the World Trade Organization (WTO), implement AHTN and other cooperation fields such as exchanging and sharing information on customs control enforcement.

Notably, to meet new requirements for customs cooperation in accelerating the implementation process of AEC, the new ASEAN Customs Agreement was negotiated and signed at the 16th ASEAN Finance Ministers' Meeting in Phnom Penh, Cambodia on March 30, 2012. This agreement was built on the basis of inheriting the provisions of the revised Kyoto Convention and related practices. The regulations in the 2012 ASEAN Customs Agreement are about operations, procedures, customs processes, IT application in customs operations, customs control, and administrative support.

In parallel with the regulations, to clearly stipulate the commitment to implement and connect with the single window system of countries in the region, the agreement to build and implement the ASEAN Single Window was signed in 2005 in Kuala Lampur, Malaysia. The agreement is the legal and technical foundation for customs of member states to directly exchange information and trade documents in the electronic environment, bringing regional cooperation to a new level.

The Protocol on AHTN aims to create a legal basis for ASEAN Customs administrations to uniformly implement and increase transparency on goods classification issues in the region. In particular, the AHTN is reviewed according to the WCO list and issued and implemented uniformly by ASEAN Member States under five-year cycle and from 2024 it will be a 6-year cycle.

To further facilitate the free flow of goods in the region by simplifying and harmonizing customs procedures from the departure, transit to destination managed through the ACTS, the The ACTS protocol of the ASEAN Framework Agreement on Trade Facilitation of Goods in Transit was signed.

The ACTS Protocol is the legal basis for ASEAN customs cooperation, established through negotiating and signing cooperation agreements, implementing initiatives and building joint management systems, which created a platform to promote regional customs cooperation across many fields and activities, achieving practical results.

The positivity of Vietnam

In the Southeast Asia region, Vietnam has achieved great achievements in economic growth and development, the scale of the economy increased nearly 17 times from US$20.8 billion in 1995 to about US$430 billion in 2023.

With the goal of expanding global economic integration, ASEAN has been promoting the implementation of Free Trade Agreements (FTAs) with countries and territories, such as China, Japan, Korea, India, Australia, New Zealand, Hong Kong (China).

Therefore, ASEAN integration is supposed to be a very important lever for Vietnam's international economic integration process. Because regional and international cooperation and integration is an inevitable process, a key trend in the current context with a focus on economic openness and trade liberalization, in order to promote domestic resources and take advantage of external opportunities.

To improve the quality and effectiveness of Vietnam's participation in ASEAN cooperation, on January 31, 2009, the Government issued the Regulations on working and coordination among agencies participating in Vietnam's ASEAN cooperation in Decision No. 142/QD-TTg. The Regulations describe the functions, tasks and powers of Vietnamese agencies in working relations when join ASEAN cooperation activities in the new period when ASEAN builds of the ASEAN Community and operates under the ASEAN charter.

Accordingly, the Ministry of Foreign Affairs is the national coordinating agency that helps the Prime Minister direct all Vietnam's ASEAN cooperation activities through the focal point of the National Secretariat for ASEAN. The Ministries of Foreign Affairs, Industry and Trade, Labor, War Invalids and Social Affairs are assigned to preside over each Community pillar, including the ASEAN Political-Security Community, the ASEAN Economic Community and the ASEAN Socio-Cultural Community respectively.

In particular, the coordination mechanism requires relevant agencies to follow regulations on information exchange and provision; report mode; periodic briefing regime; coordinate research on guidelines and policies to participate in ASEAN cooperation; coordinate in building and implementing initiatives proposed by Vietnam; coordinate to prepare for Summits and attend Council meetings, Ministerial meetings and other meetings; coordinate to organize and host activities within the ASEAN framework.

Notably, customs cooperation in ASEAN is within the ASEAN Economic Community pillar, covered by the Ministry of Industry and Trade. In which, regarding the Customs field, there is the ASEAN Directors-General of Customs Meeting and conferences on related economic, investment and financial fields.

During the development period, Customs agencies of the ASEAN Member States must accelerate reform and modernization, apply the best international standards and practices, as well as apply new advanced technologies into customs operations and management.

Therefore, to realize ASEAN's vision of “A region of development and prosperity for all people”, “One ASEAN - One identity - One vision”, the development of a legal framework to enhance in-depth cooperation in the customs field in ASEAN is becoming increasingly important.

By Nu Bui/ Huyen Trang

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