ASEAN: Regional Trends in Economic Integration, Export ... - USITC

Trade Facilitation
The timely movement of automotive parts through customs is essential to reducing costs
and meeting the just-in-time delivery system of the automotive industry. Customs delays
and administrative complexities impose additional burdens that hamper industry
competitiveness, which explains the importance of trade facilitation to the ASEAN
automotive Roadmap. Although ASEAN members have developed an itemized list of
programs to improve customs procedures and trade facilitation, including the ASEAN
Single Window (ASW), many industry representatives have the impression that ASEAN
is making slow progress on these tasks and has not established firm concrete steps to
achieve its goal. 96
The ASW is one of the more high-profile efforts within the region to create a relatively
seamless market. One multinational automaker noted that the ASW will be a big help
with customs clearance issues, 97 while a leading global parts manufacturer thinks it will
speed the customs clearance process for imported components. Currently the clearance
time for its imported goods is two days, and its goal is one-day clearance. 98
According to an industry official, Thailand’s post-audit customs process creates an
uncertain business environment. 99 Under this formal system, Thai customs authorities
have up to 10 years to review a product’s tariff classification and reclassify the product
under the appropriate category. The violating company must then pay penalties that have
accrued since the good’s clearance and release. The Customs agents then split a share of
the penalty award collected, which creates a conflict of interest that, despite being quite
transparent, may encourage reclassification of goods. This system appears to be under
review, and much progress has reportedly been made with the Thai government to
modify this program. 100
An industry official also pointed out that Thai Customs officials had a tendency to
classify goods at higher duty rates than the importer, who would enter goods in
classifications with lower rates when that option was available. Now that multiple-tier
duties have been eliminated for intra-ASEAN trade, the problem of classification at
different tariff levels is no longer experienced. 101
Logistics Services
Logistics services are another critical element in the automotive production scheme and a
key element of the Roadmap. The extensive reliance of the industry on just-in-time
delivery places great importance on the ability to move components quickly to the auto
assembler, whether from the local parts producer or from the port where components are
imported. In some cases, logistics firms also provide sequencing to the automakers, in
which parts are provided in the desired sequence to the automaker for the vehicle
96 Industry official, interview by USITC staff, Singapore, March 9, 2010.
97 Industry official, interview by USITC staff, Bangkok, March 15, 2010.
98 Ibid., March 16, 2010.
99 Ibid., March 15, 2010.
100 Industry consultant, interview by USITC staff, Bangkok, March 17, 2010, The American Chamber of
Commerce in Thailand, “Customs Meeting,” April 24, 2009.
101 Industry official, interview by USITC staff, Bangkok, March 17, 2010.
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