Unlock regional growth: A guide to leveraging FTAs with ASEAN & China

Myanmar’s economic future is closely intertwined with that of its neighboring countries. The nation’s top trading partners, consisting of several ASEAN nations and China, represent not just markets but powerful engines for growth. For businesses in Myanmar, Free Trade Agreements (FTAs) are not just bureaucratic documents; they are a strategic advantage waiting to be unlocked.

Exports to China alone in 2024 were worth US$3.46 billion, representing 23% of total exports valued at US$14.92 billion. Meanwhile, ASEAN nations such as Thailand, the Philippines, Indonesia, Vietnam, Malaysia and Singapore contributed to nearly 30% of total exports worth US$4.28 billion last year¹. Let us simplify the complexities of preferential tariffs and customs procedures, so your business can leverage these agreements to expand trade, reduce costs, and enhance competitiveness.

Understanding ASEAN and China’s Free Trade Agreements

For businesses in Myanmar, two key agreements are central to boosting regional trade: the ASEAN Free Trade Area (AFTA) and the ASEAN-China Free Trade Area (ACFTA). Both are designed to enhance economic integration and foster a more open and competitive trade environment.

Before the ASEAN-China Free Trade Area (ACFTA)² was established in 2002, and subsequently strengthened by the signing of additional agreements, the ASEAN Free Trade Area (AFTA) was established in 1992. What emerged was the eradication of both intra-regional tariffs and non-tariff barriers that allowed for robust intra-ASEAN trade. The Common Effective Preferential Tariff (CEPT) scheme, which mandates a tariff rate of 0-5% for goods originating in the ASEAN zone, accelerated the liberalization of trade within the region³. Businesses in Myanmar began reaping the benefits of reduced barriers when the nation joined the AFTA agreement in 1997. Today, the CEPT scheme has been replaced by the ASEAN Trade in Goods Agreement (ATIGA), with tariffs on 98.6% of products having been fully eliminated under the agreement.

The ACFTA was revisited numerous times, with its Protocol on Revising the China-ASEAN Comprehensive Economic Cooperation Framework Agreement in 2019 being responsible for the significant expansion of free trade of investment. This was achieved by eliminating tariffs for over 90% of goods⁴.

These agreements have paved the way for a unified trade bloc, abolishing tariffs on a vast number of product lines and simplifying trade and investment rules. For Myanmar, this means more than just access to new markets; it’s an opportunity to strengthen its position as a key production and sourcing base within the region.

Key benefits of the AFTA and ACFTA

Leveraging these agreements provides specific, tangible benefits that can significantly impact your business’s bottom line:

• Tariff Elimination: The ASEAN Trade in Goods Agreement (ATIGA), which is the cornerstone of AFTA, has removed tariffs on most products traded among ASEAN member states. This means a broader range of products can be exported from Myanmar to other ASEAN countries duty-free, making them more competitive in the market.
• Regional Cumulation: A crucial and often overlooked benefit is the Regional Cumulation rule. This rule makes it easier for your products to qualify for preferential treatment, by allowing material sourced from other member states to be considered. For example, a garment manufacturer in Myanmar can use fabric from Vietnam, and the final product will still be eligible for favourable tariff rates as a product originating from ASEAN member states and China.
• Enhanced Trade Facilitation: Beyond tariff reductions, these FTAs are increasingly focused on simplifying trade procedures. This includes harmonizing customs forms and expediting border clearance, all of which reduce the time and cost of doing business.

Mastering Rules of Origin (ROO)

To claim the benefits of an FTA, your product must be certified to have originated from a member country. This is a crucial, non-negotiable step. The Rules of Origin (ROO) are the specific criteria used to determine a product's “economic nationality.” Without satisfying these rules, you will not be eligible for preferential tariffs, and your shipment may be subject to higher duties.

The criteria for determining a product’s national source fall into two main categories:

• Wholly Obtained: This applies to products that are entirely grown, harvested, or extracted within a single country. Examples include agricultural goods, minerals, and live animals.
• Not Wholly Produced or Obtained: This applies to manufactured goods that use materials from more than one country. To qualify, a product must meet specific criteria, often based on a percentage of its value. For AFTA and ACFTA, a key rule is the 40% content rule, which states that at least 40% of the product’s content, based on its ex-works price, must be sourced from a member state.

Once you’ve confirmed your product meets the ROO, you must obtain a Certificate of Origin (COO). In Myanmar, the Ministry of Commerce is the authority responsible for issuing this vital document.

How to obtain a Certificate of Origin

Certificates of Origin (COO) validate the national source of goods for the purposes of preferential tariff treatment. Claim the benefits of an FTA by applying for a COO that corresponds with the relevant country or region⁵. To do so, you’ll need a Myanmar TradeNet account to access the Ministry of Commerce’s online application system.

AFTA: ATIGA Form-D requirements

1. Export Declaration/Document generated by Myanmar Automated Cargo Clearance System (MACCS)
2. Transport Documents/Bill of Lading
3. Invoice
4. Packing List
5. Undertaking Letters
6. Certificate of Product Registration (For goods classified as Not Wholly Obtained)

ACFTA: Form E requirements

1. Export Declaration/Document generated by Myanmar Automated Cargo Clearance System (MACCS)
2. Transport Documents/Bill of Lading
3. Invoice
4. Packing List
5. Undertaking Letters
6. Product Photo
7. Cost statement for one unit, 6-digit HS Code, Description of Input Materials and Finished Products, Production Process, and Input Declaration for Input Materials are required for goods classified as Not Wholly Obtained.)^6,7

Proper documentation is essential to prove the origin of your product. Accuracy is also paramount, as any discrepancies between your COO and other shipping documents can lead to delays, fines, or rejection of your claim for preferential tariffs.

Export documentation & customs procedures in Myanmar

Exports in Myanmar are overseen by the Customs Department and the Ministry of Commerce. Ensuring your documents are complete and accurate from the start will save you time, money, and headaches. Whether you’re shipping goods to China or to an ASEAN neighbor, you’ll need to get your export customs documents in order.

Essentials documents for export from Myanmar

• CUSDEC-2 Export Declaration Form: This is the primary customs form for declaring your goods for export.
• Customs Invoice: Whether it's a commercial or proforma invoice, your customs invoice represents a comprehensive overview of your shipment and includes key details such as INCOTERMS®, HS Codes, as well as exporter and importer details.
• Bill of Lading: This document serves as a contract between the shipper and carrier, acting as a receipt and defining the terms for the safe transport of a shipment.
• Packing List: A list detailing the contents of each package in the shipment.
• Air Waybill: A non-negotiable contract and receipt for air cargo, detailing shipment contents and serving as a freight and customs document.
• Sales Contract: The agreement between the buyer and seller.
• Certificate of Origin (COO): This is the most crucial document for claiming FTA benefits.
• Export License: Obtaining an export license in Myanmar is now easier through the online TradeNet system; however, some goods still require specific export licenses from a government agency. For example, if you're exporting seeds, you will need an export license issued by the Ministry of Agriculture, Livestock and Irrigation.

Knowing your import-export licenses and documents list helps to ensure a smooth customs clearance process. Avoid common international shipping mistakes, such as incomplete and incorrect documentation, or failing to meet customs regulations requirements⁸.

DHL Express: Your strategic partner in ASEAN-China trade

Navigating the intricacies that surround FTAs, such as Rules of Origin and Myanmar’s export procedures,  can feel overwhelming, but you don't have to do it alone. As your expert partner in global shipping, DHL Express has the network, expertise and skilled personnel needed to simplify regional trade for optimal efficiency.

• Customs and ROO Expertise: Our local team of customs specialists in Myanmar has a deep understanding of FTAs and the documentation required. We assist with proper Rules of Origin (ROO) documentation and ensure your CUSDEC-2 forms and export declarations are accurate. This minimizes delays, fines, and duty payments, helping your goods move through customs smoothly.
• Network & Connectivity: Our unparalleled customs expertise is matched only by our extensive network spanning 220 countries and territories, including the ASEAN region and China. Our robust infrastructure ensures that your shipments get to their destination quickly and reliably, helping you meet customer demands and maintain a competitive edge.

• Digital Tools: Our digital platform, MyDHL+, streamlines the entire shipping process. You can create shipments, generate documentation, and get real-time tracking updates, all in one place. You can also easily categorize your goods for customs documentation, and even apply for insurance to protect your goods in transit, for a small fee. MyDHL+ gives you complete visibility and control, which is essential for managing regional shipments efficiently.

Export with confidence to ASEAN & China

AFTA and ACFTA are more than just agreements; they are powerful tools for growth. By understanding them and leveraging them correctly, you can turn them into a powerful competitive advantage.

To succeed in this dynamic environment, businesses should master:

• Rules of Origin: Understand what it takes for your products to qualify for preferential tariffs.
• Export Documentation: Ensure all your export documents, especially the Certificate of Origin, are accurate and complete.

With this knowledge in hand, all you need now is the right international shipping partner to confidently unlock new opportunities and expand your business throughout ASEAN’s thriving trade network.

Ready to explore how DHL Express can help you leverage FTAs for your business? Sign up for a DHL Express business account today.