What benefits will RCEP bring to agricultural trading companies
By: Date: 2021-01-05 Categories: chinesefood Tags: ,
   On November 15, 2020, the Regional Comprehensive Economic Partnership Agreement (RCEP) involving 10 ASEAN countries and 15 countries including China, Japan, Korea, Australia and New Zealand ) Was officially signed, marking that the free trade zone with the largest scale, the largest population and the greatest development potential in the world has finally been completed.

   took 8 years and finally signed

   RCEP originated from ASEAN’s initiative in 2011, which aims to promote the regional economic integration of East Asia, in the 10 ASEAN countries with China, Japan, South Korea, Australia, New Zealand and India. Based on the previously signed bilateral free trade agreements (“10+1″), a comprehensive, high-quality, and mutually beneficial regional free trade agreement covering 16 countries will be constructed. In November 2012, during the East Asian Leaders’ Meeting in Phnom Penh, Cambodia, the leaders of 16 countries jointly issued the”Joint Statement on Launching RCEP Negotiations”, officially launching the process of building this large-scale free trade zone.

   RCEP originally planned to end negotiations in 2015, but due to the significant differences in the economic development level, openness and interest demands of each member, it is more difficult to reach an agreement and the speed of progress Not as expected. After repeated consultations, the members compromised with each other, and reached a consensus. RCEP was formally signed in 2020 after 31 rounds of formal negotiations over 8 years. The initial member, India, decided not to join in the final stage of the negotiations, so the other 15 member states except India signed the agreement.

   is fully open and genuine

  The population, economic volume, and trade scale in the RCEP area are very substantial, all close to 30%of the global total, and its members are mostly developing countries and emerging economies Many members are also major producers, trading countries, and consumers of agricultural products in the world. The region’s current consumer demand and future growth potential are huge. RCEP has achieved high-level results in trade and investment liberalization and facilitation, which is of great significance for enterprises to carry out agricultural trade and investment cooperation.

  In terms of trade in goods, the 15 member states will gradually achieve zero tariffs on imports of more than 90%of their goods within 20 years, most of which will be in the year when RCEP takes effect And gradually eliminate import tariffs in the following 10 years. The reduction of tariffs on agricultural products is a sensitive area for most member states and certain breakthroughs have been made. In general, with the exception of Japan, South Korea and individual least developed countries, most members have reached a high level of zero tariffs on agricultural products of more than 90%. For the first time, my country and Japan have reached an agricultural tariff reduction arrangement. Over 60%of Japan’s agricultural products and over 80%of my country’s agricultural products will cancel each other’s tariffs. my country’s tilapia, shrimps and crabs, potatoes, tomatoes, citrus, watermelon, ginger and other advantageous agricultural products High-end specialty agricultural products such as sake and processed foods from Japan and Japan are expected to enter each other’s consumer market with zero tariffs. In terms of trade facilitation, more efficient and transparent rules have been introduced, such as requiring perishable goods to strive for 6-hour customs clearance, which will improve the efficiency of cross-border circulation of fresh agricultural products. In terms of the rules of origin, the regional accumulation rules of origin are implemented, allowing the value components of the origin of goods to accumulate in the region, and they can enjoy preferential treatment when they meet the regional value component standards stipulated in the agreement. Due to the large number of RCEP members, the accumulation of participating regions is easier to meet the standards. Compared with the original”10+1″ agreement, the threshold for benefits is significantly lower, which is conducive to all parties to give full play to their comparative advantages and develop regional industrial chain cooperation. The investment field adopts the open method of”non-prohibition and entry” in the negative list. The market access and policy transparency of foreign investment by members have been significantly improved. The external environment for Chinese agricultural enterprises to conduct agricultural investment in ASEAN and other regions has been further improved.

   free trade expansion, enterprises enjoy benefits

   RCEP member countries are mostly important markets for Chinese enterprises to carry out economic and trade activities. In 2019, the total trade volume between my country and other member states of RCEP exceeded US$1.4 trillion, accounting for 31.2%of my country’s total foreign trade. In terms of agricultural trade, trade with other member states of RCEP reached US$79.25 billion, accounting for 34.4%of my country’s total agricultural trade. Among them, ASEAN is China’s largest agricultural product export market and the second largest source of imports, Japan and South Korea are my country’s important agricultural product export markets, and Australia and New Zealand are the main import sources of my country’s agricultural products. The signing of RCEP has significantly expanded my country’s free trade “circle of friends”. my country’s trade coverage with existing free trade partners will increase from the current 27%to 35%, and the trade coverage of agricultural products’ free trade partners will increase from 39%to 35%. 44%, the trade coverage rate of free trade partners for agricultural exports will increase even more, jumping from 48%to 61%.

After the implementation of    RCEP, the majority of agricultural trading companies will enjoy many benefits:the reduction of import tariffs will reduce costs and increase profits for companies that process imported raw materials domestically; The rules for the accumulation of production components make it easier for companies to purchase within the region; further liberalization of investment thresholds and a more transparent investment environment will help companies optimize the layout of the industrial chain in the region and enhance their new advantages in international agricultural cooperation and competition.

   manuscript source:

   Agricultural Trade Promotion Center, Ministry of Agriculture and Rural Affairs