Modifying the rates of duty on certain imported articles as provided under the tariff and customs code of 1978, as amended, in order to implement the decision taken by the thirty-fifth meeting of the committee on industry, minerals and energy (coime) of the asean economic ministers (aem) to extend a minimum ninety per centum (90%) margin of preference (mop) to constant velocity joint driveshafts assembly and parts thereof under the agreement on asean industrial joint ventures (aijv)

Case Overview and Summary

Summary of Executive Order No. 237

Objective: To implement the decision of the ASEAN Economic Ministers (AEM) to extend a minimum 90% Margin of Preference (MOP) to Constant Velocity Joint Driveshafts Assembly and parts thereof under the Agreement on ASEAN Industrial Joint Ventures (AIJV).

• The Philippines is a Contracting Party to the Revised Basic Agreement on ASEAN Industrial Joint Ventures (BAAIJV).
• The Philippines, Malaysia, and Thailand are participating countries in the Constant Velocity Joint Driveshaft - Asian Driveshaft (Malaysia) Sdn. Bhd. AIJV project. (Background)
• Under Article III of the Revised BAAIJV:
    - Participating countries shall extend a minimum 90% MOP to new AIJV products within 90 days of commercial production. (Sec. 1)
    - Participating countries shall waive rights under ASEAN Preferential Trading Arrangements (PTA) for 4 years for non-AIJV entities producing the same products. (Sec. 3(c))
    - Non-participating countries can enjoy the MOP by extending the same MOP after the initial 4 years. (Sec. 3(a))
• Constant Velocity Joint Driveshafts Assembly and parts thereof are new AIJV products with commercial production starting on January 1, 1994. (Background)
• A minimum 90% MOP shall be accorded to the AIJV entity in Malaysia from January 1, 1994, to December 31, 1997, for the specified products. (Sec. 2)
• After December 31, 1997, the 90% MOP shall be accorded to any entity in participating countries producing the same AIJV products. (Sec. 2)
• From January 1, 1998, the 90% MOP shall be accorded to any entity in non-participating countries, provided they extend the same MOP. (Sec. 3)
• The 90% MOP shall remain effective irrespective of any subsequent change in the basic Philippine rate of duty. (Sec. 4)
• The specified products shall be subject to qualification under the Rules of Origin prescribed in the Agreement on ASEAN Preferential Trading Arrangements and pay the applicable AIJV Preferential Tariff. (Sec. 5)
• The Executive Order shall take effect immediately after publication in two newspapers of general circulation in the Philippines. (Sec. 6)