FTA Gateway
About FTA
Tariff Finder
1 Exporting Country:
2 Importing Country:
3 Enter either the HS Code or Keyword(s) that
best describes your product:

What is a Free Trade Agreement (FTA)?

It is an agreement signed bilaterally or multilaterally in which signatory countries agree to:

  • bring down trade barriers
  • reduce tax for products moving between affected countries
  • encourage trade, business cooperation and investment

Central to compliance to qualify for FTA concession is a system of certifying the origin of the products flowing between the signatory countries, to bring down import/export tax. This is called the Rules of Origin (ROO).

If a business is exporting glass beads from The Philippines to Japan:

HS Code: 701810000 (Glass Beads)

Tax Rate with MFN Tax Rate with AJCEP
8% 2%

By qualifying under the AJCEP, the importer will save 6% in tariffs between importing under MFN rates and AJCEP rates.

How does that affect the exporter be more competitive or increase savings or revenue?

  1. A importer would be more willing to buy from an exporter with the reduced tariff with AJCEP, thus making the exporter more competitive compared to another who does not have the tariff reduction under a FTA
  2. Instead of giving discount to offset import tariffs to the buyer (increase savings), the exporters can sell more equivalent to the tariff saved (increase revenue)

If FTAs are so beneficial, why is utilization low?

There are challenges to optimising the use of FTAs such as:

  • Lack of Information and Understanding of FTA's Business Impact
  • Varying and Confusing FTA Modalities
  • Spaghetti bowl syndrome
  • Cost of FTA Compliance & Registration
  • Business Disincentive

Generally, to apply for a Preferential Certificate of Origin (PCO) to benefit from the reduced tariffs, a business has to go through the following:

  1. Register the factory or manufacturing premises
  2. Submit a Manufacturing Cost Statement (MCS), which will indicate if the Rules of Origin has been complied. Incidentally, the MCS can be valid between 6 to 12 months, so it can be re-used for more PCOs
  3. Apply for the PCO

With so many FTAs (more than 280), compliance requirements and procedures and basically, a lack of awareness, it has been proven even more difficult for the SMEs to benefit from the FTAs.

And that's where barterfli helps companies know more about the FTAs, the benefits and how their products may qualify:

  1. As products are uploaded to barterfli's platforms, based on the description and HS Codes, the system will alert if there is an FTA that covers that product;
  2. Products that have a MCS will rank higher in a search;
  3. Buyers will quickly know if a product has the MCS
  4. Advisory services to help to get started.

More importantly, barterfli's Tariff Finder covers a mulitude of FTAs, allowing comparison in a single screen the different import duties under different FTAs, allowing businesses to plan ahead what alternate destination (markets) to enter and where they are more competitive (or less). And for buyers, where are the alternative sources to purchase with the benefit of reduced tariffs.

So start now. Join as a member, upload products and use the FTA Tariff Gateway to maximize profits and competitiveness!

If you need more information about Free Trade Agreements related to Laos or have questions if your products qualify, please visit Lao Trade Portal at www.laotradeportal.gov.la .