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Interpretation signed by RCEP: 90% or more of the tax items are zero tariffs and the prices of some imported goods are reduced
On November 15, the world’s largest free trade agreement, the Regional Comprehensive Economic Partnership Agreement (RCEP), was officially signed.
Currently, RCEP has 15 member states, including 10 ASEAN countries and China, Japan, South Korea, Australia, and New Zealand. The total population, economic volume and total trade volume represent about 30% of the world total.
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, electronic commerce, government procurement, etc.) and a table of commitments on trade. of goods, trade in services, investment and temporary movement of natural persons. To accelerate the liberalization of trade in goods in the region, the reduction of tariffs is a consensus of the member states.
Vice Commerce Minister Wang Shouwen said that the RCEP is not only the world’s largest free trade agreement, but also a comprehensive, modern, high-quality and mutually beneficial free trade agreement. The total number of duty-free products in merchandise trade exceeds 90%.
In order to ensure smooth and effective implementation of the trade agreement, current RCEP member state specific tax reduction models basically include “zeroing immediately after the agreement enters into force”, “zeroing during the transition period “(including zeroing within 10 years, etc.) and” partial tax reduction “. And a small number of “exceptional products” and four other categories.
According to the Ministry of Finance, the tariff reduction among members is based mainly on the commitment to immediately reduce tariffs to zero tariffs and reduce tariffs to zero tariffs in ten years. The free trade zone is expected to achieve significant phased construction results in a relatively short period of time.
Huang Peng and others from the Shanghai WTO Issues Consultation Center wrote and discussed that overall, the agreement’s members will achieve zero tariffs for more than 90% of tax items and, through agreements that focus on a shorter transition period, consumers and businesses can be Enjoy the benefits of the agreement during implementation and a short transition period, enriching consumer market options, driving business development and generating benefits.
Li Xuhong, a professor at the Beijing National Accounting Institute, told CBN that in the future, more than 90% of the agreement members’ tax items will reach zero tariffs, which will reduce the cost of purchasing products and raw materials without tariffs in the region. Among them, the reduction in raw material costs has a double effect, one is the increase in corporate profits and the other is the decrease in the price of finished products. Of course, reducing the cost of tariffs on imported goods will also encourage companies that use imported raw materials for domestic processing to increase their profitability, lose tariff barriers and make competition between companies more fair.
The Finance Ministry said that China and Japan have reached a bilateral tariff reduction agreement for the first time, achieving a historic breakthrough.
Huang Peng analyzed that under the RCEP agreement, with the reduction of tariffs between China and Japan, Chinese imports of aquatic products, minerals, chemicals, textiles and clothing, machinery products and electrical equipment from Japan, as well as Japanese aquatic products imported from China. Some nuts, fruits and vegetables, fertilizers, household chemicals, mechanical products, electrical equipment, some optical equipment, and other commodities are expected to reduce business costs and expand business scale.
In recent years, the scale of trade between China and Japan has steadily developed. In 2019, the bilateral trade volume reached US $ 314.7 billion. Bilateral trade between China and Japan is mainly concentrated in electronic and electrical products, mechanical products, automobiles, and optical products.
The Ministry of Finance stated that the successful signing of the RCEP will play an extremely important role in enhancing the countries’ economic recovery after the epidemic and promoting long-term prosperity and development. Further acceleration of the trade liberalization process will bring further promotion of regional economic and trade prosperity. The preferential results of the agreement directly benefit consumers and businesses in the industry, and will play an important role in enriching consumer market options and reducing business costs for businesses.
Yang Zhiyong, a researcher at the Institute of Financial Strategy of the Chinese Academy of Social Sciences, told CBN that the signing of the RCEP agreement will promote free trade and further promote economic globalization, which is of great importance for the world economic recovery after the epidemic, and has also
Li Xuhong said the signing of the RCEP has promoted free trade through regional tariff reductions and zero tariffs, reduced the fiscal cost of imported goods between RECP member countries, increased corporate profits, and enabled companies in various countries improve comprehensively in a fairer tax environment. The competitiveness of companies, at the same time, has also allowed more countries to obtain benefits through trade exchanges. The RECP signature is conducive to advancing the dual cycle. At the same time, since its total trade volume represents 30% of the world total, it will also make a positive contribution to the growth of the world economy and help to face the uncertainty of the world economy through openness and cooperation. .
According to Wang Shouwen, according to the RCEP, the deal must be approved by at least 9 of the 15 members, including at least 6 ASEAN member states and at least 3 from China, Japan, South Korea, Australia and New Zealand. Now that the agreement has been signed, RCEP members will conduct their own national legal approval procedures and will strive to promote early implementation of the agreement. Leaders have instructed ministers to speed up the national approval process. China will also work with all parties to make the RCEP deal benefit businesses and individuals in the region as soon as possible.
The Ministry of Finance has already done meticulous work in terms of tariff concessions in trade in goods. In the next step, the Ministry of Finance stated that it will actively do a good job related to lowering rates in the deal.
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Editor in Charge: Lu Wenyun
