News! Formal approval RCEP! How do exporters enjoy tariff preferences?

      On November 15,2020, the Regional Comprehensive Economic Partnership Agreement (Regional Comprehensive Economic Partnership, RCEP) was formally signed, marking the official launch of the world's most populous, largest economic and trade free trade area and the most potential for development. Flat ribbon cable, Wago 236 and Bike Spoke Reflector should be noted.

 The regional organization was launched by 10 ASEAN countries (Indonesia, Malaysia, Philippines, Thailand, Singapore, Brunei, Cambodia, Laos, Myanmar, Viet Nam) and invited (China, Japan, South Korea, Australia, New Zealand and India) to participate in a trade agreement aimed at reducing tariff and non-tariff barriers, establishing a 16-nation unified free market, and implementing regional economic integration through mutual opening of markets among member States. (India withdraws at the last minute)

 After the entry into force of the agreement, more than 90% of the goods trade in the region finally achieved zero tariffs, and mainly immediately reduced taxes to zero and gradually reduced taxes to zero. Import and export enterprises to achieve tax reduction and zero tariff premise is that the products comply with the RCEP rules of origin, and according to the customs requirements of import parties to declare and enjoy the relevant agreement tax rate.

 According to the provisions, the RCEP agreement requires the ratification of at least 9 of the 15 members, including at least 6 ASEAN members and at least 3 of China, Japan, the Republic of Korea, Australia and New Zealand. Currently, members have initiated domestic legal clearance procedures aimed at facilitating the early entry into force of the Agreement.

 Some important recent processes are:

 3 February

 The Guangzhou Municipal Bureau of Commerce, through its government affairs website, published "Some Measures (Draft for Comments) to Seize RCEP Opportunities and Promote the Innovation and Development of Cross-border Electronic Commerce in Guangzhou ", which is the first local supporting measure to promote RCEP in China. Notice PDF download, please pay attention to Subscription account "focus horizon "(ID:focus vision ), reply to" Guangzhou "access.

 24 February

 At the Cabinet meeting, the Government of Japan adopted the procedure for the ratification of the Regional Comprehensive Economic Partnership Agreement (RCEP), with a view to its approval in the current Congress. (The 204th ordinary session of Japan's parliament opened on January 18 this year and will end by the end of June)

 28 February

 China's General Customs Administration said that the Regional Comprehensive Economic Partnership Agreement (RCEP) rules of origin and tariff reduction implementation of technical preparations are being comprehensively promoted. At present, we have completed the drafting of Chinese proposals such as the transfer of origin standards and the guidelines for the implementation of rules of origin. At the same time, the RCEP origin management information system, which includes export visas, the application of agreed tax rates, and other functions, is in the process of completing the system adjustment preparations.

 4 March

 The official website of the General Administration of Customs published the draft of the Measures for the Administration of Approved Exporters by the Customs of the People's Republic of China, and made public comments before April 5.

 8 March

 Minister of Commerce Wang Wentao confirmed in an interview with "Minister Channel" that our government has formally approved the agreement.

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

01RCEP cumulative rules of origin

RCEP achieve the accumulation of 15 member countries break the original China-South Korea, China-Australia, China-ASEAN and other non-accumulative restrictions. In the process of processing, the value added part of the product is regarded as the product of origin as long as it belongs to 15 member countries and the value added value exceeds 40%.

Certificate of Origin concept

Exporters of intermediate Parties have the flexibility to issue certificates of origin again in instalments for goods that have issued certificates of origin, and the relevant goods are still subject to the agreed tax rate when sold to other States Parties.

This means that the products exported by a Contracting State, after being split up by an intermediate Contracting State, may be re-exported using back-to-back certificates of origin for a period not exceeding the quantity and validity of the initial certificate of origin and the agreed tax rate in the importing State, greatly increasing the flexibility of the enterprise in terms of sales strategy and logistics arrangements.

Declaration of Origin Large-scale Use

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

The declaration of independent origin of enterprises means that in addition to the traditional certificate of origin issued by the visa agency, the declaration of origin issued by the approved exporter will also be an effective certificate of benefit. The system will effectively enhance the facilitation of the implementation of free trade agreements.

New China-Japan Free Trade Partnership

Prior to this, China has set up a free trade area with the ten ASEAN countries, and the zero tariff of the China-ASEAN Free Trade Zone has covered more than 90% of the tax items on both sides. As a result RCEP one of the biggest breakthroughs is the first time that China and Japan have a free trade zone zero tariff agreement arrangement, which has achieved a historic breakthrough.

Japan promised to gradually cut some commodity tariffs under RCEP until 15 years later to zero. Among the main commodity categories China exports to Japan, textiles may be the most profitable sector. The textile and clothing category originally faced Japan to impose about 8-11% import tariffs.

Customs Authority Guidance

01 Clear rules of origin

If products are produced in China or other memberStates of the Party, they shall not automatically enjoy the RCEP agreement tax rate, and shall also be judged in accordance with the relevant rules of origin and obtained a certificate of origin in accordance with the regulations. RCEP rules of origin under the Agreement are characterized by complexity and diversity. It is suggested that enterprises define the concepts of origin qualification, direct transportation and so on according to their own product characteristics, so as to improve the accuracy of relevant information declaration.

02 Accurate Selection of Preferential Agreements

Apart from implementing five tariff reduction tables with 14 other member countries under RCEP heading, China has crossed tax rates with six regional trade agreements, including China-ASEAN, China-Singapore, China-Korea, China-Australia, China-New Zealand Free Trade Agreement and Asia-Pacific Trade Agreement, and proposes that enterprises choose the FTA which is most suitable for their own needs, taking into account the range of products on the list of tax reductions, the degree of leniency of the standards of origin, the range of tariff concessions and the convenience of operating procedures.

Focus on Declaration of Origin

RECP the form of certificate of origin is expanded, in addition to the traditional certificate of origin, a variety of forms of declaration of origin have been added. It is suggested that enterprises should understand the relevant system of declaration of origin in advance, choose the mode of certificate of origin suitable for themselves and improve the efficiency of customs clearance.

Improving Supply Chain Layout

RCEP provides more possibilities and options for operators to optimize supply chain layout in Asia and the Pacific and even around the world. Therefore, it is suggested that enterprises should optimize the industrial layout and improve the efficiency of enterprise management in combination with different free trade agreements, as well as the above-mentioned regional value determination, regional component accumulation, back-to-back origin certification and so on.

Suggest intentional layout RCEP "circle of friends" foreign trade people, keep concerned about the progress, early preparation, seize the opportunity!

Post time: Mar-15-2021