—-From PCBWorld

The Fourth Regional Comprehensive Economic Partnership Agreement Leaders’ Meeting was held on November 15. The ten ASEAN countries and 15 countries including China, Japan, South Korea, Australia, and New Zealand formally signed the Regional Comprehensive Economic Partnership Agreement (RCEP), marking the global The largest free trade agreement was officially reached. The signing of the RCEP is an important step for regional countries to take concrete actions to safeguard the multilateral trading system and build an open world economy. It is of symbolic significance for deepening regional economic integration and stabilizing the global economy.

The Ministry of Finance wrote on its official website on November 15 that the RCEP Agreement has achieved fruitful results in the liberalization of trade in goods. Tariff reductions among members are mainly based on the commitment to immediately reduce tariffs to zero tariffs and reduce tariffs to zero tariffs within ten years. The free trade zone is expected to achieve significant phased construction results in a relatively short period of time. For the first time, China and Japan reached a bilateral tariff reduction arrangement, achieving a historic breakthrough. The agreement will help promote the realization of a high level of trade liberalization in the region.

The Ministry of Finance stated that the successful signing of RCEP will play an extremely important role in enhancing the economic recovery of countries after the epidemic and promoting long-term prosperity and development. The further acceleration of the process of trade liberalization will bring greater promotion to regional economic and trade prosperity. The preferential results of the agreement directly benefit consumers and industry enterprises, and will play an important role in enriching consumer market choices and reducing enterprise trade costs.

Agreement included in the e-commerce chapter

The RCEP Agreement consists of a preamble, 20 chapters (mainly including chapters on trade in goods, rules of origin, trade remedies, trade in services, investment, e-commerce, government procurement, etc.), and a table of commitments on trade in goods, trade in services, investment, and temporary movement of natural persons. In order to speed up the liberalization of goods trade in the region, lowering tariffs is a consensus of the member states.

Vice Minister of Commerce and Deputy International Trade Negotiation Representative Wang Shouwen said in an interview with the media that RCEP is not only the world’s largest free trade agreement, but also a comprehensive, modern, high-quality and mutually beneficial free trade agreement. “To be specific, first of all, RCEP is a comprehensive agreement. It covers 20 chapters, including market access for goods trade, service trade, and investment, as well as trade facilitation, intellectual property rights, e-commerce, competition policy, and government procurement. A lot of rules. It can be said that the agreement covers all aspects of trade and investment liberalization and facilitation.”

Second, RCEP is a modernized agreement. Wang Shouwen pointed out that it adopts regional origin accumulation rules to support the development of regional industrial chain supply chains; adopts new technologies to promote customs facilitation and promotes the development of new cross-border logistics; adopts a negative list to make investment access commitments, which greatly enhances the transparency of investment policies; The agreement also includes high-level intellectual property and e-commerce chapters to meet the needs of the digital economy era.

In addition, RCEP is a high-quality agreement. Wang Shouwen further stated that the total number of zero-tariff products in trade in goods exceeds 90%. The level of service trade and investment liberalization is significantly higher than the original “10+1″ free trade agreement. At the same time, RCEP has added a free trade relationship between China, Japan and Japan and South Korea, which has significantly increased the degree of free trade in the region. According to calculations by international think tanks, in 2025, RCEP is expected to drive member countries’ export growth 10.4% higher than the baseline.

According to the latest statistics from the Ministry of Commerce, from January to September 2020, my country’s total trade with other RCEP members reached US$1,055 billion, accounting for about one-third of China’s total foreign trade. In particular, through the newly established China-Japan free trade relationship through RCEP, my country’s trade coverage with free trade partners will increase from the current 27% to 35%. The achievement of RCEP will help expand China’s export market space, meet the needs of domestic import consumption, strengthen the supply chain of the regional industrial chain, and help stabilize foreign trade and foreign investment. It will help form a domestic and international double cycle that promotes each other. The new development pattern provides effective support.

Which companies benefit from signing RCEP?

With the signing of RCEP, China’s main trading partners will further transfer to ASEAN, Japan, South Korea and other countries. RCEP will also bring opportunities to companies. So, which companies will benefit from it?

Li Chunding, a professor at the School of Economics and Management of China Agricultural University, told reporters that export-oriented companies will benefit more, companies with more foreign trade and investment will get more opportunities, and companies with competitive advantages will get more benefits.

“Of course, it may also bring certain challenges to some companies. For example, as the degree of openness deepens, companies with comparative advantages in other member states may bring certain impacts to corresponding domestic companies.” Li Chunding said that the reorganization and reshaping of the regional value chain brought about by RCEP will also bring about the reorganization and reshaping of enterprises, so on the whole, most enterprises can benefit.

How do companies seize the opportunity? In this regard, some experts believe that on the one hand, companies are looking for new business opportunities brought about by RCEP, on the other hand, they must build internal strength and enhance their competitiveness.

RCEP will also bring about an industrial revolution. Li Chunding believes that due to the transfer and transformation of the value chain and the impact of regional opening, the original comparative advantage industries may develop further and bring about changes in the industrial structure.

The signing of RCEP is undoubtedly a huge benefit for places that mainly rely on imports and exports to drive economic development.

A staff member of the local commerce department told reporters that the signing of RCEP will certainly bring benefits to China’s foreign trade industry. After colleagues sent the news to the work group, they immediately aroused heated discussions.

The staff member said that the main business countries of local foreign trade companies are ASEAN countries, South Korea, Australia, etc., in order to reduce business costs and promote business development, the main method of issuing preferential certificates of origin is to issue the largest number of certificates. All origins belong to RCEP member states. Relatively speaking, RCEP reduces tariffs more strongly, which will play a more active role in promoting the development of local foreign trade enterprises.

It is worth noting that some import and export companies have become the focus of attention of all parties because their product markets or industrial chains involve RCEP member states.
In this regard, Guangdong Development Strategy believes that the signing of RCEP by 15 countries signifies the official conclusion of the world’s largest free trade agreement. Related themes usher in investment opportunities and help boost market sentiment. If the theme sector can continue to be active, it will help the overall restoration of market sentiment and will also play a leading role in the Shanghai Stock Exchange Index. If the volume can be effectively amplified at the same time, after the short-term shock consolidation, the Shanghai Index is expected to hit the 3400 resistance area again.