RCEP to Take Effect from 1 January 2022
The Secretariat of the Association of Southeast Asian Nations (ASEAN), the official depository for the Regional Comprehensive Economic Partnership (RCEP), announced on 2 November 2021 that 6 member countries of the ASEAN (Brunei, Cambodia, Laos, Singapore, Thailand and Vietnam) and 4 non-ASEAN countries (China, Japan, New Zealand, and Australia) had formally submitted their RCEP ratification instruments to the Secretary General of ASEAN. The RCEP will take effect from 1 January 2022 in those 10 countries. As to the remaining 5 signatories (South Korea, Malaysia, Indonesia, Philippines, Myanmar), the RCEP will take effect from the 60th day after those countries have completed their procedures for ratification and formally submitted the RCEP ratification instruments to the Secretary General of ASEAN.
The RCEP consists of one preamble, twenty chapters (covering trade in goods, rules of origin, customs procedures and trade facilitation, trade remedies, trade in services, investment, etc.), and four annexes of commitment schedules.
After the RCEP takes effect, more than 90% of intra-regional trade in goods will eventually achieve zero tariff. And the tariff concessions among its members are mainly based on the commitment to reduce to zero tariff immediately and reduce to zero tariff within 10 years. It will greatly reduce the costs of intra-regional trade and product prices, enhance the competitiveness of regional products and benefit all enterprises and consumers in the region.
In terms of rules of origin, the RCEP adopts the intra-regional cumulative rules of origin. It means the raw materials value components from any RCEP member state will be considered to be accumulated in the raw materials value of the final production or processing member countries, which will significantly improve the utilization rate of the preferential tariff rate and greatly promote the deep integration and development of supply chain and value chain in the region.
In terms of trade in services and investment, member states have also made high-level openness pledges. After the RCEP takes effect, it will play a positive role in facilitating trade in services and investment in the region.
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