Summary: China has launched approval procedure of RCEP, which will be completed within six months.

On 16 Dec., the China Council for the Promotion of International Trade held a seminar of Regional Comprehensive Economic Partnership (RCEP) with representives from Vietnam, Indonesia, Laos, Malaysia, the Philippine, Thailand, Australia, Japan, South Korea, New Zealand and other member countries. At the meeting, Ministry of Commerce revealed that China has launched approval precedures for domesitc RCEP, whose preparatory works would be fininshed within six months. It is expected to obtain approvals in May or June 2021.

In fact, Minister of Commerce Zhong Shan signed the RCEP on behalf of the Chinese government, together with the trade ministers of 10 ASEAN countries (Indonesia, Malaysia, the Philippines, Thailand, Singapore, Brunei, Cambodia, Laos, Myanmar and Vietnam), Japan, South Korea, Australia and New Zealand on 15 Nov. RCEP is by far the largest free trade area by size. In 2019, the 15 member countries' export values made for around 30% of the world. The establishment of the RCEP would create an integrated super-large market with around one third of the global economy.

Initiated by 10 ASEAN countries in 2012, the RCEP went through 31 rounds of negotiations over the last 8 years. Before the agreement takes effect, it should be ratified by at least 9 member countries, including at least 6 ASEAN countries and 3 major trading partners: China, Japan, South Korea, Australia and New Zealand, according to the RCEP. In the next step, member states are committed to completing their domestic approval procedures so that the agreement will enter into effect as early as possible. This may take one or two years. After the agreement enters into force, over 90% of the trade in goods in the region will eventually be duty-free, most of which will have zero-tariff immediately or within ten years. In this way, the RCEP free trade areas can deliver on all the commitments to liberalize trade in goods in a relatively short period time.

China's tariff commitments for acidity regulators can see the table below. (Note: The RCEP agreement has not been brought into effect. And the above contents of the agreement may not be the final results.)

Addtionally, China and the EU leaders announced on 30 Dec., 2020 that they finished talks on bilateral investment treaties. The investment deal went through 35 rounds of negotiations over the last 7 years from 2013.

An official for treaty and law at the Commerce Ministry said that the agreement is beyond traditional bilateral investment treaties covering market access commitement, fair competition rules, sustainable development and dispute settlement. The deal will permit more European investment in services and non-services industries and provide legally binding commitments for China to access the European market. Moreover, the two parties have committed to set no limits of enterprises numbers, output, revenues, senior executives, local R&D, export performances and headquater in various economic fields, and have allowed foreign exchange transfer, entry and residence permits related to investment. In the next step, China and the EU will carry out text approval, translation and other works to push forward implementation of the deal. The agreement will come into force after their domestic approval procedures.

China and the EU are each others' major trading partners. The investment deal will further promote their trades and provide more investment opportunities for enterprises of the both parties.

Table Tax reduction plan for some acidity regulator products specified in China’s tariff commitment list (ASEAN member states, Australia,New Zealand)
 

Source of the table: China FTA network

Table Tax reduction plan for some acidity regulator products specified in China’s tariff commitment list (South Korea)

Source: China FTA network

Table Tax reduction plan for some acidity regulator products specified in China’s tariff commitment list (Japan)

Source: China FTA network

You can find more information about this article in CCM Acidity Regulator China Quarterly Newsletter. If you would to know how RCEP affect other industries, check out CCM online database or email emarket1@cnchemicals.com to gain more market insight.

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