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Chongqing Takes Measures to Help Enterprises Benefit from RCEP

By ZHAN CHENICHONGQING|May 19,2022

Chongqing- On January 1, when the Regional Comprehensive Economic Partnership (RCEP) took effect, Chongqing issued a batch of RCEP certificates of origin. By the end of April this year, nearly 400 certificates had been signed. So far, RCEP has been implemented for more than five months, while enterprises have mixed views.

The lack of understanding of RCEP policy is a great problem for many companies. They focus primarily on tariff concessions, while the other contents under RCEP, like customs clearance, trade, and investment, pay little attention, which may cause them to miss some opportunities, said a source of the municipal commission of commerce. 

RCEP

Information about Regional Comprehensive Economic Partnership (RCEP). (iChongqing/ Chen Zhan)

Status quo

According to the survey, the most positive response to the RCEP comes from the companies that have traded with Japan since its implementation. 

A Chongqing Customs District official addressed that the RCEP is the first free trade agreement signed between China and Japan. The favorable tariff policy has increased the enthusiasm of Japanese trading firms to apply for the RCEP certificate of origin. When the agreement came into force, China reduced tariffs on 25% of Japanese products to zero and eventually decreased tariffs on 86% of Japanese products to zero. Japan reduced tariffs on 57% of Chinese products to zero and ultimately reduced taxes on 88% of Chinese products to zero.

The Consulate General of Japan in Chongqing said that after the RCEP agreement comes into effect, tariffs on numerous goods such as spare parts, agricultural products, and Japanese sake will be steadily cleared, bringing great opportunities to firms in related fields.

Unlike the positive attitude towards Japanese trading companies, the others who have trade contacts with RCEP countries raised doubts about whether the RCEP could benefit. 

SAIC Hongyan is one example. As Chongqing’s first company to apply for the RCEP certificate of origin, Hongyan considered that the policy has limited benefits. The competent representative of the company said that China and the Association of Southeast Asian Nations (ASEAN) had a corresponding free trade agreement previously. After the RCEP came into effect, the tariff rates on both sides were the same as before.

The Chongqing Municipal Commission of Commerce said that the tariff reduction of RCEP is divided into countries and stages, prompting significant differences among distinct regions. According to the RCEP rules, tariff reductions among members are gradually reduced, and the commitment to reduce tariffs to zero within ten years is the main one. In the short term, it may have little incentive for small and medium-sized foreign trade firms with wait-and-see attitudes in the growth stage. 

RCEP

Information about Regional Comprehensive Economic Partnership (RCEP). (iChongqing/ Chen Zhan)

Countermeasures

At present, the RCEP training is mainly targeting departments, districts, counties, and some companies, said an official. In the future, Chongqing will conduct more targeted training, focusing on freight forwarding firms and customs declaration ones, to effectively serve the integration of foreign trade enterprises into RCEP rules. 

The official also said that the implementation of RCEP has put forward higher requirements for Chongqing to create a market-oriented, legalized, and international business environment. Next, the related department will focus on solving the issues of complicated business processes, high costs, and complex financing for foreign trade enterprises. 

In terms of infrastructure, Chongqing will rely on the New International Land-sea Trade Corridor to build the air, river, and road freight platforms, coordinating various domestic and international transportation methods. The air corridor connecting ASEAN and other countries will be opened to ensure cross-border intermodal transport services. 

Chongqing Customs District will further enhance the understanding and guidance of enterprises on RCEP. They will continue to strengthen the publicity, interpretation, and advice of the rules for enterprises. Meanwhile, Chongqing will promote the implementation of the self-declaration system for certificates of origin to help more enterprises make good use of relevant preferential policies and facilitation measures.

(Wang Yuxuan, as an intern, also contributed to this report.)

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