International News

China officially approves RCEP

Views : 351
Author : Bozhou Marine
Update time : 2021-03-15 16:28:08

This regional organization was initiated by 10 ASEAN countries (Indonesia, Malaysia, the Philippines, Thailand, Singapore, Brunei, Cambodia, Laos, Myanmar, Vietnam) and invited (China, Japan, South Korea, Australia, New Zealand and India) to participate in order to reduce Tariff and non-tariff barriers, the establishment of a 16-country unified free market trade agreement, and the implementation of regional economic integration through the mutual opening of markets among member states. (India exits at the last minute)

After the agreement comes into effect, more than 90% of the goods trade in the region will eventually achieve zero tariffs, and it will mainly be reduced to zero immediately and gradually to zero. The prerequisite for import and export enterprises to achieve tax reduction and zero tariffs is that the products comply with the RCEP rules of origin, and declare and enjoy the relevant agreed tax rates in accordance with the customs requirements of the importing party.

According to regulations, the RCEP agreement needs to be approved by at least 9 of the 15 members before it can enter into force, including at least 6 ASEAN member states and at least 3 countries among China, Japan, South Korea, Australia and New Zealand. At present, all members have started the domestic legal approval process, aiming to promote the early entry into force and implementation of the agreement.

So, what should exporters pay attention to when enjoying tariff preferences in the future?

  01, RCEP country of origin accumulation rules

RCEP achieves accumulation among 15 member states, breaking the original restrictions that China and South Korea, China and Australia, China and ASEAN cannot accumulate across agreements. In the process of product processing, the value-added part realized as long as it belongs to 15 member states and the value-added value exceeds 40% is regarded as the product of origin.

  02, back to back proof of origin concept

The exporters of the intermediate contracting parties shall flexibly issue the certificate of origin in batches and installments for the goods that have issued the certificate of origin, and the relevant goods will still enjoy the agreed tax rate when they are sold to other contracting states.

This means that after the export products of the contracting states are split in the intermediate contracting states, they can use the back-to-back certificate of origin to re-export the goods and enjoy the treaty tax rate in the importing country within the quantity and validity period contained in the initial certificate of origin, which greatly improves the company's sales strategy and Flexibility in logistics arrangements.

  03. Large-scale use of declaration of origin

The declaration of origin issued by the approved exporter will be used in conjunction with the traditional certificate of origin on the date of entry into force of the agreement.

Enterprise independent declaration of origin means that in addition to the traditional certificate of origin issued by the visa agency, the declaration of origin independently issued by the approved exporter will also be a valid certificate of enjoyment. This system will effectively enhance the free trade agreement. The degree of facilitation of implementation.

  04. New China-Japan Free Trade Partnership

Prior to this, China has established a free trade area with the ten ASEAN countries, and the zero tariff of the China-ASEAN Free Trade Area has covered more than 90% of the tax items of both parties. Therefore, one of the biggest breakthroughs of RCEP is the establishment of a zero-tariff agreement between China and Japan for the first time in a free trade zone, achieving a historic breakthrough.

Under the RCEP, Japan has promised to gradually reduce tariffs on some commodities until it drops to zero 15 years later. Among the main categories of commodities that China exports to Japan, textiles may be the most profitable industry sector. Most textiles and apparels originally faced import tariffs of 8%-11% imposed by Japan.

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