RCEP: What Changes Will Be Brought To Foreign Trade Enterprises After It Takes Effect

On January 1, 2022, the regional comprehensive economic partnership agreement (RCEP) officially entered into force. Customs across the country are busy. From Nanjing Customs issuing the first RCEP origin declaration to Qingdao Customs issuing the first RCEP certificate of origin, the free trade zone with the largest population, the largest economic and trade scale and the most potential for development has officially set sail.

01. According to the information on the website of the Ministry of Commerce, RCEP has taken the lead in the implementation of RCEP in the 10 countries that have formally submitted their approval documents, namely, Brunei, Cambodia, Laos, Singapore, Thailand and Vietnam, and four non ASEAN member states including China, Japan, New Zealand and Australia. South Korea will join the implementation on February 1. The remaining member states will also take effect after completing the domestic approval procedures. RCEP has 15 members, including China, Japan, South Korea, Australia, New Zealand and 10 ASEAN countries.

In an interview with economic daily, many experts believe that RCEP implementation will help reduce the institutional transaction costs of intra regional trade and investment in East Asia, inject new impetus into regional and even world economy, and will become an important platform for China to build a new development pattern, and further promote China's institutional opening in the fields of rules, regulations, management and standards.

Yuan Bo, deputy director and researcher of the Asian Research Institute of the Institute of international trade and economic cooperation of the Ministry of Commerce, told reporters of the first finance and economics, "after the RCEP is reached, the 'trade creation' effect will be more obvious among members who have no free trade agreement arrangement before and whose tariff barriers are relatively high."

The Research Institute of international trade and economic cooperation of the Ministry of Commerce recently released the report on the impact of RCEP on regional economy. According to the report, by 2035, RCEP will drive the cumulative growth of real GDP, exports and imports of the region as a whole by 0.86%, 18.30% and 9.63% respectively compared with the benchmark scenario, and the cumulative incremental scale of exports and imports will reach 857.1 billion US dollars and 983.7 billion US dollars respectively. At the global level, by 2035, RCEP will increase world real GDP and import and export trade by 0.12% and 2.91% respectively compared with the baseline scenario.

02. RCEP is the largest free trade agreement in the world so far. Its total population, economic volume and total trade account for 1 / 3 of the global total. The agreement covers a wide range of fields such as tariff reduction and exemption, trade facilitation, service investment opening, intellectual property protection, etc.

It is understood that in terms of market opening, the proportion of immediate zero tariff between China and ASEAN, Australia and New Zealand exceeds 65%. The proportion of immediate zero tariff between China and South Korea is 39% and 50%. A large number of immediate zero tariff products will bring opportunities for trade development. On this basis, RCEP members will enjoy zero tariff on 90% of their products in about 10 years.

In a number of effective countries, China and Japan reached a bilateral tariff reduction arrangement for the first time through RCEP agreement, which achieved a historic breakthrough. Ren Hongbin, Vice Minister of the Ministry of Commerce, said at the briefing of the former state new office that China and Japan have reached a free trade arrangement for the first time, and the two sides have substantially reduced their tariffs in machinery and equipment, electronic information, chemical industry, light industry and textile. In particular, zero tariff will be realized immediately for 57% of China's tax products exported to Japan in 2022, which has a significant promoting effect on trade.

According to the data of the Ministry of Commerce, China and Japan are newly established free trade relations, and the proportion of zero tariff will reach 25% and 57% respectively. In the end, 86% of Japan's products exported to China will realize zero tariff treatment, and 88% of products exported from China to Japan will enjoy zero tariff treatment. Ren Hongbin said at the press conference of the office of the State Council of the people's Republic of China a few days ago that the implementation of RCEP is a "new milestone" in China's opening-up, which will become a link and bridge between China and the international dual circulation, and make the two domestic and international markets and resources more closely linked.

03. As the connecting point between the belt and road initiative and the Yangtze River economic belt, Chongqing has unique geographical advantages in deepening cooperation with RCEP member states. According to the relevant person in charge of Chongqing Municipal Commission of Commerce, Chongqing will further build a high-level docking platform for RCEP, build a leading area for RCEP economic and trade cooperation, and focus on the demonstration and leading role of the China Singapore interconnection project and the six comprehensive bonded zones in the city; It will build an international logistics hub connecting RCEP and a logistics distribution center of RCEP member countries in Western China; Speed up the connection with RCEP member states in aviation and railway fields, and enhance the trade distribution capacity with RCEP countries.

"RCEP will significantly reduce the operating costs of enterprises in the region, drive enterprises to restructure the supply chain and value chain in the region, optimize the flow of goods, technology, services and capital in the region. China and ASEAN countries will stride towards a new era of regional economic integration." Yang Chunting, director of the Department of Commerce of Guangxi, said that as the frontier and window of opening up and cooperation with ASEAN, Guangxi's opening and cooperation with RCEP members, including ASEAN, will also usher in greater development opportunities and stimulate more development dividends.

On December 30, 2021, Guangxi established RCEP enterprise service center. Yang Chunting said that Guangxi will speed up the construction of a cross-border industrial chain oriented to ASEAN characteristics and advantages, make full use of RCEP preferential tariffs and rules of origin accumulation, strengthen cooperation with domestic industries of RCEP members based on the favorable conditions of industrial cooperation with ASEAN, and promote the formation of cross-border industrial chain supply chain value chain in the fields of electronic information, new chemical materials and processing of ASEAN characteristic products. We should strengthen the collaborative innovation of the industrial chain, strengthen the interaction with the upstream and downstream industrial chains of overseas economic and trade cooperation parks, and constantly optimize the layout of the industrial chain supply chain.

On December 1, 2020, Qingdao took the lead in proposing the construction of RCEP Qingdao Economic and trade cooperation pilot innovation base with the international cruise port area as the core area. After this takes effect, Qingdao will make good use of the platforms such as the Shanghai Cooperation Demonstration Zone and the pilot free trade zone to continuously deepen the cooperation with RCEP member states in international trade, shipping logistics, modern finance, scientific and technological innovation, modern ocean and other fields, We will accelerate the construction of RCEP economic and trade cooperation demonstration city with convenient trade, open service, free investment, safe and efficient supervision and strong radiation and driving effect.

Yu Benlin, director general of the Department of international economic and trade relations of the Ministry of Commerce, said that RCEP is a powerful hand in stabilizing foreign trade and foreign investment. The entry into force of the agreement has brought multiple positive effects, which will further stabilize China's foreign trade and foreign investment base, promote industrial upgrading and stimulate market vitality.

Yu stressed that RCEP will enhance the growth of mutual investment between China and other member states. In the field of trade in services, all parties have made high-level commitments to opening up. In the field of investment, all parties have made commitments in the form of a negative list. The access to foreign investment has been more relaxed, and the policy transparency has been greatly improved. The opening-up commitments of goods, services and investment are superimposed, trade and investment facilitation is guaranteed by the system, the industrial chain supply chain is more integrated, and regional investment will be more active.