RCEP leverages a new pattern of global trade

18 Nov.2020

After eight years of negotiations, the world’s largest free trade zone agreement was reached. On 15. November, the "Regional Comprehensive Economic Partnership Agreement" (RCEP) was formally signed. According to statistics in 2018, compared with other free trade agreements, RCEP, as a new free trade agreement, covers about 2.3 billion people in 15 member countries, accounting for 30% of the global population, and the total GDP exceeds 25 trillion US dollars.

At the 4th Regional Comprehensive Economic Partnership Agreement Leaders’ Meeting, Premier Li Keqiang stated that as the free trade zone with the largest population, the most diverse membership structure and the greatest development potential in the world, this is not only a landmark for East Asian regional cooperation. The meaningful result is the victory of multilateralism and free trade.

RCEP

As the world's largest free trade agreement, RCEP member countries include 10 ASEAN countries as well as China, Japan, South Korea, Australia, and New Zealand. The total population, economic volume and total trade volume of the 15 member countries account for about 30% of the global total. Xinhua News Agency once pointed out that once the RCEP is reached, it will establish a unified market by reducing the tariff and non-tariff barriers of member countries, and become the world's most populous and most potential regional free trade agreement.

From the framework of this agreement, the agreement consists of a preamble, including 20 chapters including trade in goods, rules of origin, trade remedies, trade in services, investment, e-commerce, government procurement, etc., as well as trade in goods, trade in services, investment and temporary natural persons. Mobile commitment table composition.

For China, the signing of RCEP is at the right time. Since the beginning of this year, ASEAN has surpassed the European Union to become China's largest trading partner. Under the impact of the epidemic, the economic and trade cooperation between the two sides continued to rise against the trend. The trade volume between the two sides reached 3.79 trillion yuan in the first 10 months, a year-on-year increase of 7%, accounting for 1/7 of China’s total foreign trade; in terms of investment, in the first three quarters, China’s direct investment in ASEAN's entire industry reached US$10.7 billion, a year-on-year increase of 76.6 %.

It is worth noting that on the day the agreement was signed, the Ministry of Finance mentioned that China and Japan reached a bilateral tariff concession arrangement for the first time, achieving a historic breakthrough. It is understood that the RCEP agreement is the first free trade agreement between China and Japan, and it is also the first free trade agreement between Japan and South Korea.

On November 15, the signing ceremony of the Regional Comprehensive Economic Partnership (RCEP) in Hanoi, capital of Vietnam.

What important consensus has RCEP reached on market opening?

In terms of trade in goods. The 15 parties have adopted bilateral two-by-two bidding methods to make arrangements for the liberalization of trade in goods. After the agreement takes effect, more than 90% of the goods trade in the region will eventually achieve zero tariffs, and the tax will be reduced to zero immediately and within 10 years. To zero, the RCEP free trade zone is expected to fulfill all its commitments to liberalize trade in goods in a relatively short time. It is foreseeable that with the implementation of unified rules such as rules of origin, customs procedures, inspection and quarantine, and technical standards, the abolition of the superposition of tariff and non-tariff barrier effects will gradually release the trade creation effect of RCEP and significantly reduce intra-regional trade costs and product prices. Enhance the competitiveness of products in the region and benefit all companies and consumers.

Service trade. Seven members, including Japan, South Korea, Australia, Singapore, Brunei, Malaysia, and Indonesia, adopted negative list commitments, while the remaining eight members, including China, adopted positive list commitments, which will be converted into negative lists within 6 years after the agreement takes effect. As far as the level of openness is concerned, all 15 parties have made openness commitments higher than their respective "10+1" free trade agreements. China’s service trade opening commitment has reached the highest level of existing free trade agreements. The number of service departments promised is based on the approximately 100 departments promised by China’s WTO accession, and 22 new departments including R&D, management consulting, manufacturing-related services, and air transportation have been added. , And raised the level of commitments in 37 departments including finance, law, construction, and shipping. Other members have made high-level openness commitments in the construction, medical, real estate, finance, transportation and other service sectors that China focuses on.

Investment. All 15 parties have adopted a negative list method to make high-level openness commitments for investment in the five non-service sectors of manufacturing, agriculture, forestry, fishery, and mining, which has greatly improved the transparency of policies of all parties. The negative list of Chinese investment reflects the latest developments in domestic reforms. This is also the first time that my country has made a commitment to the investment sector in the form of a negative list under the free trade agreement, to improve the domestic pre-access national treatment plus the negative list foreign investment management system, and lock in domestic compression The results of the reform of the negative list of foreign investment are of great significance to expand market access for foreign investment.

Movement of natural persons. The parties promise that investors from countries in the region, internal mobile personnel, contract service providers, accompanying spouses and family members, and other business personnel, can obtain a certain period of residence, enjoy visa convenience, and carry out various activities if they meet the conditions. Kind of trade and investment activities. Compared with previous agreements, RCEP extends the scope of its commitment to all types of natural persons that may move across borders under agreements such as investors other than service providers, accompanying spouses, and family members. The level of commitment in contracting practice.

What content does RCEP have on benchmarking international high-standard free trade rules?

RCEP expands the scope of the original "10+1" free trade agreement rules, not only benchmarking international high-level free trade rules, including intellectual property, e-commerce, competition, government procurement and other topics, but also in small and medium enterprises, economic technology Provisions have been made to strengthen cooperation in areas such as cooperation.

In the field of intellectual property rights, RCEP covers a wide range of content such as copyrights, trademarks, geographical indications, patents, designs, genetic resources, traditional knowledge, and folklore. While taking into account the different development levels of various countries, RCEP has significantly improved the level of regional intellectual property protection. In the field of e-commerce, RCEP provides provisions for electronic certification and signature, online consumer protection, online personal information protection, network security, and cross-border electronic information transmission. For the first time, my country has also entered into a free trade agreement under the premise of complying with Chinese laws and regulations. Provisions for data flow, information storage, etc. are included. In the field of trade remedies, on the basis of WTO rules, RCEP made detailed regulations on anti-dumping, countervailing, and safeguard measures, and for the first time included the “prohibition of zero-return” clauses in the free trade agreement; at the same time, it learned from international high-standard rules and adopted “best practices”. "The list method has significantly improved the technical level and transparency of anti-dumping and countervailing investigations. In the field of competition, RCEP has reached a relatively high level in areas such as the promotion of antitrust and consumer protection. In the field of government procurement, all parties reached a consensus on actively carrying out government procurement information exchange and cooperation, providing technical assistance, and strengthening capacity building. The field of cooperation highlights that RCEP countries use the free trade agreement platform to strengthen support and investment in SMEs and economic and technical cooperation, so that the contents of the RCEP agreement can better benefit SMEs and developing economies.

What important consensus does RCEP reach on rules of origin?

In terms of rules of origin, RCEP uses the regional accumulation principle in this region, so that the value component of product origin can be accumulated in the region composed of 15 member states, and the value component from any party of RCEP will be taken into account, which will be significant Increase the utilization rate of treaty preferential tax rates. For example, according to the previous bilateral free trade agreement, the country of origin cannot be counted as a certain product of a country’s origin. After the accumulation of regional value, it may be recognized as RCEP regional origin and enjoy RCEP preferential tariffs. This will help multinational companies to carry out industrial layout more flexibly, establish a more refined and complete industrial chain division system, and reduce the production cost of final products. It will not only help expand trade between RCEP members, but also greatly promote regional Deep integration and development of supply chain and value chain.

At the same time, compared with the previous "10+1" agreement, RCEP has further enriched the types of certificates of origin. In addition to traditional certificates of origin, it will also allow approved exporters' declarations and exporters' independent declarations. It marks the transformation of the declaration of origin system from the issuance mode of officially authorized visa agencies to the independent declaration mode of enterprise credit guarantee, which greatly saves the government's administrative management costs and the enterprise's operating costs, and further improves the timeliness of customs clearance of goods.

What are the provisions of RCEP in enhancing the level of trade facilitation in the region?

RCEP's trade facilitation measures mainly include customs procedures and trade facilitation measures, sanitary and phytosanitary measures, standards, technical regulations and conformity assessment procedures. In terms of customs procedures and trade facilitation, RCEP simplifies customs clearance procedures, adopts effective management methods such as advance rulings, pre-arrival processing, and the use of information technology to promote customs procedures, and where possible, strive for express goods and perishable goods. The realization of the release of goods within 6 hours after arrival has promoted the development of new cross-border logistics such as express delivery, and promoted the rapid customs clearance and trade growth of fresh products such as fruits, vegetables and meat, eggs, and dairy products. The overall level exceeds the WTO’s Trade Facilitation Agreement. In terms of sanitary and phytosanitary measures, a series of measures have been formulated to protect the life or health of humans, animals or plants, and ensure that these measures do not restrict trade as much as possible and do not constitute unreasonable discrimination against other RCEP members. On the basis of the WTO Agreement on Sanitary and Phytosanitary Measures, RCEP has also strengthened the implementation of rules such as risk analysis, audit, certification, import inspection, and emergency measures. In terms of standards, technical regulations and conformity assessment procedures, RCEP promotes all parties to reduce unnecessary technical trade barriers in the recognition of standards, technical regulations and conformity assessment procedures, and encourages standardization agencies of all parties to strengthen standards, technical regulations and conformity assessment procedures Information exchange and cooperation. These measures will greatly improve the facilitation level of goods trade in the region, reduce trade costs, shorten logistics time, and further promote the formation of a regionally integrated market.

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