Home > Chemial News > Echemi Focus > What Development Opportunities Does The RCEP Bring Into Force

What Development Opportunities Does The RCEP Bring Into Force

ECHEMI 2022-01-11

On January 1, 2022, the world's largest free trade agreement involving the largest population, the largest economic and trade scale, and the most potential for development, the Regional Comprehensive Economic Partnership Agreement, also known as the RCEP Agreement, took the lead in Brunei, Cambodia, Laos, Singapore, and Thailand. , Vietnam and other 6 ASEAN member states and China, Japan, New Zealand, Australia and other 4 non-ASEAN member states.


On the 1st day, various customs districts in China reported good news about the first import and export business after the Regional Comprehensive Economic Partnership (RCEP) came into effect.” Foreign trade companies actively applied for the RCEP certificate of origin online. Medical and epidemic prevention materials, Zhejiang Zhoushan small seafood, Shaoxing chrysanthemum, Huzhou textile and clothing and other export commodities have successfully obtained the RCEP certificate of origin, and enterprises have effectively enjoyed the policy dividend of tariff reduction in the world's largest free trade zone.


As of January 5, 275 RCEP certificates of origin have been issued nationwide. Mainly involving textiles, chemical products, medical products, food, etc., the export destination countries include Japan, Australia and other member states that have entered into force, involving an export value of more than 19 million US dollars, and it is expected to reduce or exempt tariffs of 220,000 US dollars for enterprises.


Improve the level of regional economic integration


The total population, economic output and total export value of RCEP member countries account for about 30% of the global total, which contains huge economic volume and development space. In 2020, China's exports to RCEP member countries will account for about 27% of my country's total exports, and its imports will account for about 38% of my country's total imports. The investment from RCEP member countries will account for more than 10% of my country's actual use of foreign capital.


Cui Fan, a professor at the School of International Business and Economics at the University of International Business and Economics, said: Within the scope of the 15 countries in the RCEP (Regional Comprehensive Economic Partnership), China's economic volume accounts for 58%. Through the RCEP agreement, other countries can more easily enter the Chinese market, share the benefits of "China's growth", and improve the level of regional economic integration.


The level of openness of RCEP in various fields such as trade in goods, service investment, and rules is significantly higher than the level of openness committed by my country in the WTO. In terms of trade in goods, more than one third of my country's foreign trade will achieve zero tariffs; the number of open sectors for trade in services has increased to 122 from 100 at the time of WTO accession, and the commitment level of 37 sectors has also been raised; The negative list promises to open up non-service investment fields; in terms of rules, new topics such as e-commerce, government procurement, and competition have been added, raising the level of commitment to issues such as intellectual property rights.


Zhang Jianping, director of the Regional Economic Cooperation Research Center of the Research Institute of the Ministry of Commerce, believes that: RCEP (Regional Comprehensive Economic Partnership) represents the world's largest integrated market, covering about 30% of the world's population, economic aggregate, and trade scale. As well as the scale of capital flows, the huge benefits of trade creation, investment and employment growth in this big market in the future will not only promote high-quality development in China, but also global development.


Ninety percent of goods are zero-tariff, ordinary people benefit


For ordinary people, what aspects will benefit after RCEP takes effect? After the RCEP agreement comes into effect, not only will 90% of commodities finally achieve zero tariffs, but cross-border e-commerce will also usher in new development opportunities, and consumers will get more benefits. After the tax reduction is completed, China's imports of coconut juice, pineapple products, and paper products from ASEAN, as well as induction cookers and electric ovens imported from Japan, will be gradually exempted from tariffs, and more high-quality and inexpensive products will enter consumers' shopping carts.


At the same time, under the RCEP framework, China and Japan have achieved a zero-tariff FTA arrangement for the first time. For example, my country will implement zero tariffs on most of Japan's electrical and electronic products, integrated circuits, auto parts, fluorine rubber and other chemicals and various light industrial products, and Japan will impose zero tariffs on all Chinese mechanical and electrical products, instruments and meters, textiles and clothing, and aquatic products. , vegetables and other zero-tariff treatment.


In the end, 86% of Japan's products exported to China will achieve zero tariffs; at the same time, 88% of China's products exported to Japan will enjoy zero tariffs.


At the same time, my country and ASEAN countries and other member states that already have free trade relations have also added additional zero-tariff products to each other on the basis of the original free trade agreement.


The dividends after RCEP takes effect are not only reflected in shopping but also in services. In terms of trade in services, RCEP member countries have generally committed to opening more than 100 service trade sectors. Cross-border e-commerce, Internet finance, online office, online education, online consultation and other new formats and new models will usher in greater development opportunities, which will enable domestic consumers to enjoy more favorable prices and higher quality services.


RCEP brings new opportunities for industrial development


After the entry into force of the Regional Comprehensive Economic Partnership, what major opportunities will it bring to my country's industrial development?


RCEP will provide my country with new opportunities for agricultural exports. For the first time, China and Japan have reached a tariff reduction arrangement for agricultural products. China and South Korea and China and ASEAN have also made commitments on opening up certain agricultural products that go beyond existing bilateral free trade agreements. For example, before the RCEP was signed, Japan only granted zero-tariff treatment to agricultural products imported from China with a tax number of 20%. In RCEP, Japan promised to give my country zero-tariff treatment to about 60% of agricultural products.


After the RCEP comes into effect, China's exports of many agricultural products to Japan will enjoy zero tariffs. In addition, my country has also promised to gradually eliminate tariffs on 86.6% of Japan's agricultural products, and Japan's aquatic products, processed foods, and specialty wines will enjoy zero-tariff treatment.


RCEP will boost the integration of the automotive industry chain and supply chain. In RCEP, my country has made a zero-tariff commitment to about 65% of auto parts. The reduction of tariffs on auto parts by RCEP will greatly integrate the automotive supply chain and industrial chain in East Asia, and help automobile manufacturers reduce production costs.


The growth of trade in goods driven by RCEP will also greatly stimulate the demand for manufacturing-related services, such as R&D, design, wholesale and retail related to manufacturing.


How can companies seize these opportunities?

It is worth mentioning that reducing import tariffs will promote trade and investment growth on the one hand, and intensify industry and enterprise competition on the other. The rules of origin accumulation will deepen the deep integration of regional industrial chains, and may also accelerate the transfer of labor-intensive industries to ASEAN countries with lower land and labor costs.


For companies, the key to the agreement is implementation. Familiar with the rules can better grasp the bonus. The relevant person in charge of the Ministry of Commerce said that enterprises and local governments should study and familiarize themselves with the content of the agreement, thoroughly understand the preferential policies and facilitation rules in the agreement, make good use of the RCEP rules of origin accumulation, actively benchmark the international advanced industry level, and continuously enhance market competitiveness.


In order to help enterprises seize the opportunities brought by RCEP, departments such as commerce and customs have held more than 1,000 training sessions nationwide. Special policies have been issued in many places, and all-round arrangements have been made in terms of expanding the space for trade in goods and deepening two-way investment. In the near future, the Ministry of Commerce will issue the "Guiding Opinions on High-Quality Implementation of RCEP" with relevant departments to guide and help local governments and enterprises to better apply RCEP rules, and to promote the implementation of the RCEP agreement in all member states as soon as possible, so as to truly give full play to its The role of driving regional economic growth.

Share to:
Disclaimer: ECHEMI reserves the right of final explanation and revision for all the information.

Scan the QR Code to Share

Send Message