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15 countries sign RCEP to launch world’s biggest free trade bloc


On November 15, 2020, 15 countries alongwith the Association of Southeast Asian Nations, China Japan, the Republic of Korea, signed the Regional Comprehensive Economic Partnership (RCEP) agreement to launch the world's biggest free trade bloc, after 31 rounds of negotiations over eight years, reports CCF Group.

According to this trade pact, it will not exert great impact of this part of the commodity trade as current ASEAN countries enjoy preferential tariff policies. For example, the actual import tariff for nylon 6 chips is 0, and the actual import tariff for caprolactam is 6 per cent (lower than 9 per cent MFN rate).

South Korea and Japan will directly reduce CPL import tariff from China to 0 after the RCEP trade pact. In addition, Japan, Thailand, Indonesia and other countries will reduce tariffs on other nylon products from China directly or gradually to zero. These changes will benefit the nylon exports by China.

Each country or region has a different rate of tariff implementation without or with the Certificate of Origin on the same commodity. For example, South Korea’s tariff for nylon filaments from China is 4 per cent if there is the Certificate of Origin, and 8 per cent is levied if there is no Certificate of Origin.

In Chapter 3 of the RCEP Agreement text, “Rules of Origin”, the implementation of (b) and (b) undoubtedly makes more goods comply with the "source of origin" and have certificates of origin. Therefore, the actual tariff levied will be lower than those listed in the above three figures, which will definitely strengthen the export competitiveness of China-made products.