summary: on January 1, 2022, the message that RCEP came into effect was swiped. RCEP, that is, the entry into force and implementation of the regional comprehensive economic partnership agreement, means that the world’s largest free trade area has officially set sail.
The old fellow railway starts the first international freight train on January 1, 2022. The first international train of China and old fellow railway loaded with 30 standard containers is parked at the Kunming central station of China railway link. On the same day, 30 standard containers sailed from Kunming to Vientiane, Laos, with a total operation time of about 30 hours. Xinhua News Agency
On January 1, 2022, the RCEP came into effect. RCEP, that is, the entry into force and implementation of the regional comprehensive economic partnership agreement, means that the world’s largest free trade area has officially set sail.
Why is this Agreement receiving so much attention? Relevant people and experts interpreted it.
Point one: how important is this agreement
RCEP now has 15 member countries, including China, Japan, South Korea, Australia, New Zealand and 10 ASEAN countries, accounting for about 30% of the global total in terms of population, economic volume and total trade.
After eight years of negotiations, RCEP was signed on November 15, 2020. On New Year’s day in 2022, RCEP will officially enter into force for Brunei, Cambodia, China, Japan, New Zealand and other 10 countries. The remaining member states will also come into force after completing China’s ratification procedures.
“Under the impact of the covid-19 pneumonia epidemic, RCEP was still signed and entered into force as scheduled, and issued a strong voice against unilateralism and trade protectionism, supporting free trade and maintaining the multilateral trading system, which will help boost confidence in the regional and even global economic recovery after the epidemic.” Tu Xinquan, President of the China WTO Research Institute of the University of international business and economics, said.
On the whole, the number of zero tariff products in goods trade exceeds 90%, and the opening level of service trade and investment is significantly higher than that of the original bilateral free trade agreement among Member States… It covers 20 chapters. RCEP includes all aspects of trade and investment liberalization and facilitation, reflecting the characteristics of comprehensiveness, modernity, high quality and reciprocity.
Yuan Bo, deputy director of the Asian Research Institute of the Research Institute of the Ministry of Commerce, said that RCEP has significantly reduced the trade and investment costs of Member States, will effectively promote intra regional trade and investment exchanges, improve the resilience of regional industrial chain supply chain, and help countries resist external economic turbulence and shocks.
The report of the United Nations Conference on Trade and development evaluates that the entry into force of this agreement will greatly promote the growth of foreign direct investment in the region within the region and other economies.
Ren Hongbin, Vice Minister of Commerce, said that the entry into force and implementation of the RCEP agreement is a new milestone in China’s opening up, provides strong support for the construction of a new development pattern, and will also inject new impetus into China’s and the world’s economic growth.
Focus 2: what opportunities will it bring to enterprises
For enterprises, the greatest benefit of RCEP after its entry into force is the reduction of import costs and the increase of export opportunities brought by the reduction of tariffs.
According to the RCEP agreement, in the end, 86% of Japan’s products exported to China will achieve zero tariff, and 88% of China’s products exported to Japan will enjoy zero tariff treatment.
China and Japan established free trade relations for the first time and achieved bilateral tariff concessions, including some aquatic products and vegetable products.
“Not long ago, an order for 1000 tons of salmon trout products from a Japanese customer came back!” Guo Xiaohua, executive vice president of Shandong Meijia Group Co., Ltd., said that the original customer imported this product from Southeast Asian countries because RCEP tariff was reduced and the order returned to China. “With the tax reduction year by year, I believe orders will become more and more prosperous.” This enterprise, which mainly processes and exports frozen aquatic products and vegetables, feels particularly obvious about the policy dividend.
Expanding the market, strengthening the chain and enjoying services — Yang Zhengwei, deputy director of the Department of international economic and trade relations of the Ministry of Commerce, summarized the benefits brought to enterprises by the effective implementation of RCEP.
It not only promotes trade, but also benefits investment. “The implementation of the agreement will undoubtedly attract more foreign investment into Thailand, especially China, which is one of the main sources of foreign direct investment in Thailand.” Xu genluo, director and senior consultant of Thailand China Luoyong Industrial Park, said that measures such as abolishing tariffs and reducing non-tariff barriers will improve the integration of China Thailand supply chain.
There is a very important “cumulative rule of origin” in RCEP. According to the rules, as long as the value-added part of products in the processing process belongs to 15 member states and the cumulative value-added exceeds 40%, they can enjoy the corresponding tariff preference.
“This rule will effectively promote the minimization of regional production costs and the optimization of trade efficiency, and is conducive to strengthening regional industrial chain and supply chain cooperation.” Gao Feng, spokesman of the Ministry of Commerce, said.
Aspect 3: how can Chinese consumers benefit
New Zealand milk powder, Korean cosmetics, Japanese electronic equipment and Thai durian are “regular customers” of Beijing resident Ms. Zhang’s shopping cart. “With the reduction of tariffs, it will be cheaper for us to buy imported goods and have more choices for consumption.” She said.
More choices, lower prices, faster speed… High quality, affordable and convenient – these are the three key words brought to consumers by the effectiveness of RCEP.
On the day RCEP came into effect, tariffs on a large number of products were immediately reduced to zero. The proportion of immediate zero tariff between China and ASEAN, Australia and New Zealand exceeds 65%, the proportion of immediate zero tariff with South Korea reaches 39% and 50%, and the proportion of immediate zero tariff with Japan reaches 25% and 57% respectively.
After the tax reduction is completed, China’s coconut juice, pineapple products and paper products imported from ASEAN, induction cooker and electric oven imported from Japan will be gradually exempted from tariffs, and more high-quality and cheap goods will enter consumers’ shopping carts.
Not only more, but also faster. Perishable goods, such as fresh seafood, fruits and vegetables, shall be released within 6 hours; Allow air cargo to speed up customs clearance… RCEP’s provisions on Paperless Trade and electronic certification will make cross-border shopping more convenient.
The dividend after RCEP takes effect is not only reflected in shopping but also in services. In terms of trade in services, RCEP member states have generally committed to opening up more than 100 service trade sectors. “New formats and models such as cross-border e-commerce, Internet finance, online office, online education and online consultation will usher in greater development opportunities, which will enable Chinese consumers to enjoy more preferential prices and higher quality services.” Gao Feng said.
Focus 4: how to seize opportunities and meet challenges
RCEP takes effect, which is both an opportunity and a challenge. Reducing import tariffs will not only promote the growth of trade and investment, but also intensify the competition of industries and enterprises. The rule 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. “The accelerated entry of advanced manufacturing industries in Japan and South Korea into the ASEAN market will form a fuller market competition.” Li Dongchun, general manager of Guangxi Liugong Machinery Co.Ltd(000528) international business center, said that we must speed up the construction of international market response capacity and look at new opportunities for industrial cooperation in the reconstruction of international industry from a longer-term perspective.
The key to the agreement lies in its 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 deeply study and be familiar with the contents of the agreement, understand the preferential policies and facilitation rules in the agreement, make good use of RCEP rules of origin accumulation, actively benchmark the international advanced industrial level, and constantly enhance market competitiveness.
In order to help enterprises seize the opportunities brought by RCEP, commerce, customs and other departments have held more than 1000 training sessions nationwide. Many places have issued special policies to make all-round deployment from the aspects of expanding space for trade in goods and deepening two-way investment. In the near future, the Ministry of Commerce will issue the guidance on high-quality implementation of RCEP with relevant departments to guide and help local governments and enterprises to better use RCEP rules.
Shen Minghui, vice president of the Asia Pacific and Global Strategy Research Institute of the Chinese Academy of Social Sciences, suggested that in the future, on the basis of government publicity and training, we can further strengthen publicity and training for enterprises, especially small, medium-sized and micro enterprises and enterprises in the central and western regions, in the form of third-party services and business associations, And further establish and improve public service platforms serving the implementation of free trade agreements such as RCEP.
Shen Minghui said that it is necessary to promote the entry into force and implementation of the RCEP agreement in all Member States as soon as possible and truly play its role in driving regional economic growth. (Xinhua)
(source: China Economic Herald)
