Highlights of RCEP Related to The Petrochemical Industry

1. Trade

tariff reduction

According to the official interpretation of RCEP by the International Department of the Ministry of Commerce, after the agreement takes effect, more than 90% of the trade in goods in the region will eventually achieve zero tariffs. Except for the three least developed countries, the corresponding proportions of the remaining ASEAN members, Australia and New Zealand to China are roughly the same as or slightly higher than mine. While the proportion of China's immediate zero tariffs on Japan and South Korea is relatively low, it maintains a balance between them.

As far as tariffs are concerned, RCEP has a complementary and mutually reinforcing relationship with other existing trade agreements between members in the region. RCEP stipulates tariff reduction products that are not included in other free trade zone agreements, and enterprises can choose RCEP or other trade agreements to apply according to the degree of preference.

Before the signing of RCEP, since the current effective tariff rates of most products are themselves low, the impact of this RCEP tariff reduction is not significant in the short term. But RCEP is the first time China has reached a free trade agreement with Japan, so tariff preferences with Japan will have more impact on the current trade situation.

lower trade barriers

In addition to tariffs, RCEP reduces intra-regional trade barriers through various systems. For example, unlike bilateral agreements, the rules of accumulation of origin have been strengthened within the scope of fifteen member states, enabling a wider range of goods to enjoy tariff preferences; customs clearance procedures have been simplified, and advanced rulings, pre-arrival processing, information technology Use other efficient management methods to promote customs procedures, and release the goods within 48 hours after arrival as much as possible; encourage the unification of standards, technical regulations and conformity assessment procedures among all parties in the region, and strengthen relevant exchanges and cooperation. With the implementation of various measures, it can be expected that the flow of goods in the region will increase, the cost of goods in the regional market will be reduced, and consumption will increase.

2. Investment

Use a negative list

After RCEP came into effect, 15 member states pledged to adopt a negative list approach to foreign investment, that is, outside the specific industries listed in the negative list, foreign investment behaviors will no longer be subject to additional approvals that differ from domestic investment behaviors in member states. When interpreting the contents of RCEP, the International Department of the Ministry of Commerce also emphasized that China has determined that it will be fully open to the outside world, and there can be no more restrictive measures.

Prohibition of some performance requirements for foreign investment

Article 6 of Chapter 10 of RCEP stipulates that, unless the member states explicitly list the inapplicable items in Annex III, in all aspects of investment by foreign investors in member countries, such as establishment, acquisition, expansion, management, operation, operation, sale or otherwise, Member States shall not impose or enforce the following measures: achieving a certain level or proportion of local content; transferring certain technologies, production processes or other know-how to persons within their territory; selling in certain markets; intervention, etc.; purchase, use, or give preferential treatment to goods produced in its territory, or purchase goods from persons in its territory; link the sale to the volume or value of the product exported or foreign exchange earnings, in order to restrict the sale of goods produced by the investment within its territory, etc. This clause is unprecedented in the free trade agreements signed between China and the ten ASEAN countries before, and will improve the transparency and predictability of foreign investment supervision of each member state to a large extent.

Investment Promotion and Facilitation

According to RCEP, member countries should strive to promote and raise awareness of the region as an investment region, for example, by encouraging investment among members, promoting business matching activities, organizing and supporting investment opportunities and investment laws, regulations and policies. presentations, and facilitate the exchange of information. In addition, member states have also committed to creating the necessary environment for all forms of investment and simplifying their investment application and approval procedures. Although the above clauses also exist in the FTA between China and ASEAN, from the perspective of the FTA reached between my country and Japan for the first time, it will have a positive impact on cross-border investment in the region.