"RCEP" is finally coming into effect. Recently, China's foreign trade circles are discussing the profound impact of RCEP's entry into force on China's foreign trade cross-border e-commerce.
About the past and present of RCEP
The Regional Comprehensive Economic Partnership (RCEP) was initiated by ten ASEAN countries and included China, Japan, South Korea, Australia, New Zealand, and India ("10+6"), to establish a unified 16-countries market free trade agreements through the reduction of tariff and non-tariff barriers.
RCEP started negotiations as early as 2012, and took eight years to formally sign it. Due to the efforts of the Chinese government, it then took only one year from the signing stage to the final entry into force. This progress has completely exceeded our expectations. Reinvigorating in the post-pandemic era brings great confidence and opportunity.
What are the actual benefits of RCEP for foreign trade companies?
1. First and foremost, tax reduction and exemption.
2. Exporting is easier: With the official implementation of RCEP, the trade barriers between countries in the region are simplified, the complexity of exporting goods is reduced, and the distribution and sales of goods become more free. The biggest benefit is the 90% off of tariff. There may be zero tariffs, which will bring great benefits to China's foreign trade exports in the post-epidemic era.
3. The cost has become cheaper: many raw materials are made in China, and the core parts need to be imported. The raw materials of wool are imported from Vietnam, and the camera parts and auto parts machines are imported from Japan. With the RCEP policy, the release of dividends will greatly reduce the cost of raw materials in the region, which will greatly increase the competitiveness of Chinese suppliers.
For example, denim, smart instruments, mobile phones, camera parts, etc., the import cost of raw material is greatly reduced, which ultimately reduces the production cost, thereby greatly improves the competitiveness of our products and expands foreign trade exports.
RCEP brings the improvement of cross-border e-commerce logistics efficiency in the region
One of the biggest pain points of cross-border e-commerce in 2021 is the logistics. The implementation of RCEP has greatly improved the logistics efficiency of cross-border e-commerce. The advantage for cross-border e-commerce sellers is that it simplifies the logistics process, reduces the risk of tariff collection on postal parcels, reduces the construction cost of overseas warehouses, and ultimately benefits logistics companies, overseas warehouse companies, and cross-border e-commerce companies.
The impact of RCEP on promoting trade facilitation
One of the greatest values of RCEP is the facilitation of trade. RCEP unifies the rules and terms of the region. Whether it is exporting to the international market in the region or investing in the capital in the region, the policy is more stable, and the value and efficiency of investment exports are improved. Secondly, RCEP vigorously promotes paperless trade and submits trade management documents in electronic form, which promotes the process of trade facilitation to the greatest extent. RCEP also emphasizes the importance of electronic certification and electronic signatures, and recognized electronic contracts and electronic signatures in the region, which greatly promotes the development of e-commerce in the region.
RCEP promotes the development of cross-border e-commerce in China
There are many clauses in RCEP that encourage the development of cross-border e-commerce, which will ultimately help my country to further promote the development of cross-border e-commerce, and enhance China's influence and economy through cross-border e-commerce.
The most commendable thing is that the RCEP clauses have improved the e-commerce dispute resolution mechanism. RCEP clearly stipulates that in the event of an e-commerce dispute, first negotiation in good faith, and if no dispute settlement is reached, it can be submitted to the RCEP Joint Committee for final settlement of the dispute.
Optimize and stabilize the value chain and supply chain within the RCEP region
The release of the RCEP policy dividend can bring the best benefits to the circulation of commodities in the region, bring the greatest benefits and optimize the allocation of resources through talent exchanges and technical cooperation, and maximize the creation of integrated value.
The value of RCEP for brand building
One of the biggest trends in cross-border e-commerce in 2021 is the construction of branding and the wave of branding. The key to branding is intellectual property rights, such as appearance patents and copyrights. The release of RCEP's policy dividends has made the promotion of branding more stable. RCEP essentially unifies the rules of countries in the region, causes the transactions in the region to be more efficient and investment more stable. In such a large environment, the regional brand will also advance faster.
On the Rules of Origin and Cumulative Origin Principles brought by RCEP
For the vast number of foreign trade exporting small and medium-sized enterprises, one of the biggest dividends of RCEP should be the principle of origin and accumulation. Everyone doing foreign trade should know whether they meet the rules of origin, which will generate huge economic benefits for the supply chain of cross-border e-commerce. The rules of origin are essentially the "economic nationality" of commodities. According to the original product principle of RCEP, entering a country is equivalent to entering all countries in the region, in which the tax classification and change standards, regional value component standards, and regional component accumulation rules are completed.
The principle of RCEP is that in the region, the originating goods or production activities of other parties used in the production of commodities by a party can be counted as the originating components of the commodity.
The principle of accumulation of origin can help enterprises to greatly reduce operating costs, because the tariff cost of enterprises has dropped, and the competitiveness of export products has been improved to the greatest extent. At the same time, the principle of accumulation of original origins further strengthens the flow of raw materials, goods and talents within the region, the division of labor in the industrial chain, and ultimately increases consumer demand and promotes industrial upgrading.
For this policy bonus, companies should have an in-depth understanding of the policy details, and at the same time, make arrangements for production and logistics in advance based on their own company products and industrial chain conditions, as well as the principle of origin suitable for different products, and speed up the company's export business system and management. The principle of origin also involves the classification of goods, customs assessment, etc.
Enterprises' overall planning on tariffs
The biggest benefit of RCEP for foreign trade companies is the reduction and exemption of tariffs and tax rebates. However, different countries and products have different tax rebate ratios. For enterprises, we need to compare RCEP with the current tax rebates in free trade areas, choose your own most favorable tax rebate rate, and enjoy the market dividend of tariff reduction to the greatest extent.
