Chongqing —"The signing of the RCEP will help develop Chongqing Cross-border Highway Regular Lorry into the fast lane,"  said Chris Zeng, the General Manager of Chongqing-ASEAN International Logistics Co., Ltd. On January 18, 2021, Chris Zeng told iChongqing, the RCEP clause clearly supports cross-border operations and facilitates customs procedures, and it will greatly promote foreign trade growth between Chongqing and ASEAN countries in the next decades. 

On November 15, 2020, the Regional Comprehensive Economic Partnership (RCEP), which is known as the world's most potential regional free trade agreement has formally signed among 15 countries, including ten ASEAN countries as well as China, Japan, South Korea, Australia, and New Zealand.

According to the official interpretation of the Ministry of Commerce of the People's Republic of China, RCEP requires all 15 member states to commit to lower tariffs, open markets, and reduce standard barriers. It is a modern, comprehensive, high-quality, and mutually beneficial large-scale regional free trade agreement.

In recent years, Chongqing's foreign trade with ASEAN countries has continued to grow. According to Chongqing Customs on January 20, in 2020, Chongqing's import and export to ASEAN was 112.17 billion yuan, an increase of 3.4%, accounting for 17.2% of the whole volume. The data shows that ASEAN is still Chongqing's largest trading partner. So, it's worthwhile asking, after the signing of RCEP, what kind of new opportunities will the RCEP bring to the trade cooperation between Chongqing and ASEAN?

RECP accelerates ILSTC development

Dong Jianguo, director of the Chongqing Development and Reform Commission, said at a press conference that the official signing of the RCEP is a great benefit. The implementation of the agreement will enable the ILSTC to better play the open channel's role in the Chengdu-Chongqing area.

He also stated that Chongqing would deepen economic and trade cooperation with ASEAN in the future, including promoting trade quality and increment and strengthening channel industry cooperation.

As an important transportation mode for ILSTC, Chongqing Cross-border Highway Regular Lorry has undertaken many transportation tasks. The data shows since the launch on April 28, 2016, the number of Chongqing Cross-border Highway Regular Lorry departures has exceeded 5,000, shipping 11,252 TEUs with a total weight of about 75,100 tons and a total value of about 2.9 billion yuan (about 449.12 million U.S. dollars).

"It's obvious that the signing of the RCEP will accelerate the development of Chongqing Cross-border Regular Lorry," Chris Zeng, the General Manager of Chongqing-ASEAN International Logistics Co., Ltd said.

Zeng also said that trade is the basis and condition of logistics development. The RCEP clause clearly supports cross-border operations and facilitates customs procedures. On the one hand, it will greatly promote trade growth, and the supply of goods will increase substantially. On the other hand, it will further simplify the customs clearance procedures, which will effectively improve customs clearance timeliness.

"In the next step, Chongqing-ASEAN International Logistics will expedite the exploration of new models, promote the development of ILSTC with diversified cross-border transportation services, actively develop the ASEAN professional market, and strengthen the trade linkages with ASEAN countries. The company will continue to cultivate emerging industries, build ASEAN cargo distribution centers, and promote business cooperation between ASEAN countries’ overseas companies in ASEAN Commodity Centralized & Purchasing City. We will use cross-border regular lorry as a link to circulate commodities from various regions and countries, and to build an international and domestic dual-circulation pattern with the ILSTC the bridge and the ASEAN Commodity Centralized & Purchasing City as the distribution center."

As a multimodal transport-branded international trade and logistics hub, Chongqing Guoyuan Port is expected to cooperate with Yangon Port in Myanmar in port operations, information sharing, and talent exchange after signing RCEP. “We hope to use Yangon Port as an opportunity further to strengthen exchanges and cooperation between Guoyuan Port and ASEAN,” staff from the Guoyuan Port National Logistics Hub said.

RCEP stimulates Chongqing-ASEAN trade

An official of the Foreign Affairs Department of the Chongqing Municipal Commission of Commerce stated that the tariff reduction mentioned in the RCEP would further reduce the transaction cost of import and export business, stimulate the market passion for import and export trade, and encourage small and medium-sized enterprises to participate in the import and export trade. The opportunity to further stimulate import and export business growth will also greatly stimulate economic growth during the epidemic.

Take the Chongqing-ASEAN International Logistics as an example by reducing standard barriers and further promote trade standardization.

"For different countries where Chinese goods are exported, they have completely different trade standards for the same goods. For example, for complete sets of auto parts exported from China to Vietnam, China can declare according to the whole vehicle, while Vietnam can only declare according to the parts. Different trade standards further increase the workload of customs clearance. Then with the signing of the RCEP, by reducing standard barriers, it will be conducive to the unification of trade standards and promote trade facilitation," said Zeng.

On the other hand, the signing of RCEP will also help Chongqing introduce more foreign-funded enterprises and projects. The Municipal Commission of Commerce's relevant person said that Chongqing has close contacts with Japan, South Korea, Singapore, and other countries. With the in-depth implementation of RCEP, Chongqing will be easier to attract investment in these countries.

Chongqing-ASEAN cooperation

According to the Chongqing Commission of Commerce, Chongqing will take the Belt and Road Initiative's joint construction as its lead and promote the cooperation between Chongqing and ASEAN in four aspects.

The first is to seize the opportunity of signing the RCEP, expand the scale of bilateral trade, strengthen industrial division of labor, enhance the level of two-way investment, and build Chongqing into an entrepot trade center and international trade center along the Belt and Road routes, such as ASEAN. The logistics hub aims to promote the deep integration of the region's industrial chain, supply chain, and value chain.

The second is to comprehensively improve the strategic channel functions of the ILSTC, promote multimodal transportation, better play the role of the logistics and operation organization center of Chongqing, improve the interconnection level of railways, highways, ports, airports, and other infrastructure.

The third is to give full play to the role of the China-Singapore (Chongqing) Demonstration Initiative on Strategic Connectivity, improve the operating mechanism, attract more western provinces, autonomous regions and municipalities, more countries and regions, and more business entities to participate. Besides, it will also coordinate the promotion of project implementation and policy innovation and promote people's all-around interconnection, Logistics, capital flow, information flow, and others.

The fourth is to actively create new growth points for digital economic cooperation, expand digital cooperation platforms, implement digital economic projects, and explore digital trade rules in 5G, cross-border finance, and cross-border e-commerce blockchain, and other fields.

(Fu Xiaoduo, as an intern, also contributed to this report.)