When I was growing up my father had a few signs posted on the door of his office and one that said ‘There is no such thing as a free lunch’. As a young child, I remember being confused by it and once I understood its implication as a teenager I was annoyed by it. It implied that I was going to have to actually do something to get something good. When seeing what often happens with Free Trade Agreements (FTA) usage in Asia, I sometimes think of that phrase and wonder how companies, and trade compliance officers, forget that they have to actually do something to reap the benefits of the FTA.
In the past couple months there have been a few public announcements by Customs agencies in Asia related to investigations into misuse of some of the FTA in the region as well as other preferential duty programs. In Thailand, a special investigation is trying to collect over $400 million USD in retroactive duties and penalties from a couple of global automotive companies. This is an unprecedented amount of money. In India, a global consumer electronics company is on the line for over $45 million USD due to apparent violations of the ASEAN-India FTA.