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Xinhai

Top 1 Customs Declarations Amount in China for 8 YearsOne-Stop Intellectual Integrated Information System
xinhai@thecustoms.com.cn

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Free Trade Agreement


What is FTA?


Free Trade Agreement (FTA). Is a legally binding contract between two or more States aimed at promoting economic integration, one of the objectives is to eliminate trade barriers, allowing products and services to be traded freely between countries. Here the trade barriers may be the tariffs, may be the complicated regulation ect.


Government Support

1,In line with international trade development trend of the FTA

Regional economic integration is the main trend of trade of this century. According to the latest statistics of the WTO Secretariat, till April 2015, There are 612 proposals of the regional trade had been submitted, and there are 406 items have come into effect. In these regional trade arrangements, the majority are in the form of free trade area.


2,Sharing the policy advantages of the national FTA strategy

In the context of the rapid development of free trade zone over the world, China listed "the implementation of the free trade zone strategy" into the report of the 17th National Congress of CPC in 2007. That means the FTA strategy became the national strategy. In 2012, “accelerate implementation of the strategy of building free trade areas” had been mentioned in the Report to the Eighteenth National Congress. In the Third Plenary Session of the 18th Central Committee of the CPC, “speeding up the construction of free trade zones” had been pointed out. Meanwhile, Xi Jinping, President of the People's Republic of China, required to “building up the globalization Free Trade Zone network which is based on the surrounding countries and the Belt and Road policy.


Advantage of FTA

1, Preferential Tariff Information

One of the core preferential policies of the FTA is that the goods from the partner countries can obtain the reduction or exemption of import duty and the tariff. By the clause of the preferential tariff, the trade cost is significantly reduced.

At the same time, FTA could help to simplify the customs procedures in both importing and exporting countries. If there is any unfair trading in FTA countries, FTA could assist the traders with remedial measure.


2, Rules of Origin Information

Not all goods from FTA countries are eligible for preferential tariff treatment when they do the customs clearance in China. Only products that meet specific rules of origin and certified as origin are entitled to preferential treatment under the FTA. Therefore, the rules of origin has become the focus issue of this clause.


Scope of Application

In order to implement the strategy of free trade zone, China has speed up the construction of free trade zone. Till June 2015, China has successfully signed 15 free trade agreements, they are ASEAN, Singapore, Pakistan, New Zealand, Chile, Peru, Costa Rica, Iceland, Switzerland, South Korea, Australia, Closer Economic Partnership Arrangement (CEPA) with HongKong and Macau, Economic Cooperation Framework Agreement between the Mainland China and Taiwan (ECFA), and the Asia-Pacific Trade Agreement.


System Functions

Rules of origin are known as the most complicate issue in the FTA. The rules of origin include both substantive rules(such as origin standards, supplementary standards) and procedural rules (such as direct consignment and certificate of origin). FTA query system, which is based on the data base of FTA, has been developed for the traders achieving more benefits from preferential tariff policies.

The application system will achieve the following functions:

o Whether the particular commodity has preferential tariff in free trade zones;

o Comparison of preferential tariff rates for the particular commodities with MFN tariff rates and ordinary rates;

o Automatically calculate the customs duty which is saved by free trade zone preferential tariffs;

o Rules of origin for particular products using preferential tariffs for free trade zones;

o Notice for the customs clearance;

o Procedures and documents list for achieving preferential tariff;

o Information on FTA, rules of origin, laws and regulations, administrative adjudication, public announcement ect;

o Case study for the traders or products benefit from the rules of origin;

o Trading information, tariff information and policy released among the member in FTA.