December 2018 - ASEAN Member States (AMS) continued to gain understanding and awareness on full cumulation under the ASEAN - Australia-New Zealand Free Trade Area (AANZFTA) as four more capacity building workshops were held this month in Cambodia, Indonesia, Malaysia and Viet Nam. These workshops are part of a series of capacity-building activities supported by the AANZFTA Economic Cooperation Support Programme (AECSP) to facilitate future negotiation of a full cumulation pilot programme under AANZFTA Rules of Origin. These capacity building activities were aimed at creating awareness and promoting understanding on the concept of full cumulation for government officials and private sector representatives.

A total of 359 representatives from AMS customs-related agencies and the private sector from in Cambodia, Indonesia, Malaysia and Viet Nam participated in the workshops. Director Donna Gultom of the ASEAN Negotiation, Directorate General of International Trade Negotiation of Indonesias Ministry of Trade noted the importance of introducing the concept of full cumulation and stressed the benefit of the workshops in increasing the understanding and knowledge of businesses and government officials.

Discussions revolved around the processes and benefits of full cumulation, potential risks and risk management strategies, and increased participation in regional supply chains for business in the AANZFTA region. Director Jamilah Haji Hassan, Trade and Industry Section of Malaysia's Ministry of International Trade and Industry noted "Under the full cumulation concept, the processes done in a members country can be cumulated to gain benefit under AANZFTA. This will allow better business opportunities and collaboration between members of AANZFTA, expanding and evolving the way of doing business."

"The workshop on full cumulation for AANZFTA rules of origin are timely organized in order to share and enhance capacity and knowledge of the participants as well as improve their knowledge concerning the processes in conducting a full cumulation pilot in AANZFTA," added Dr. Sang Sinavith, Director of International Customs Cooperation Department, General Department of Customs and Excise of Cambodia.

Full cumulation under AANZFTA will expand the concept of cumulation, as stated in the AANZFTA Chapter on Rules of Origin, by allowing the accumulation of originating costs (labour and materials) for a good incurred in one AANZFTA Party to count the costs of production of a subsequent good in another AANZFTA Party, regardless of whether the processing of the original good is sufficient to confer originating status.

"Comprehensive knowledge of Rules of Origin is critical in order to fully utilize the benefits of the AANZFTA Agreement. Full Cumulation is an important factor to contribute to accelerating the rate of utilization of the Agreement," said Mr. Tran Thanh Hai, Deputy Director-General, Agency of Foreign Trade, Ministry of Industry and Trade of Viet Nam.

These series of workshops were organized by the ASEAN Secretariat in collaboration with Ministry of Trade of Indonesia, Ministry of International Trade and Industry of Malaysia, General Department of Customs and Excise of Cambodia and Ministry of Industry and Trade of Viet Nam. AECSP provided the same support to Myanmar, Philippines, Thailand and Lao PDR in November 2018. For details, please refer to this press release: https://aanzfta.asean.org/aanzfta-prepares-for-the-negotiation-of-a-pilot-full-cumulation-program/