Posted on 06 Jan 2021
A First Look at the Regional Comprehensive Economic Partnership (RCEP)
On 15 November 2020, 15 countries hailed the signing of the Regional Comprehensive Economic Partnership. Abbreviated RCEP, the trade pact brought together ASEAN, China, Japan, South Korea, Australia & New Zealand, forming the world’s largest trade bloc with a total GDP of USD 26.2 trillion (30% of global GDP), with a population of 2.2 billion (also 30% of world population).
While the RCEP is a significant achievement, it is nothing new to the ASEAN Countries (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam). Actually, ASEAN already has bilateral trade pacts with Japan, Australia & New Zealand, China, South Korea and India. To ASEAN, the RCEP is like a unification of all its trade pacts with 5 out of 6 of their Free Trade Agreement (FTA) partners; only India prefers to be excluded.
ASEAN Free Trade Agreements
|
ASEAN’s FTAs |
Signed |
Effected |
|
AFTA: ASEAN-6 |
Jan 1992 |
1 Jan 2010 |
|
AFTA: Vietnam |
Jul 1995 |
1 Jan 2010 |
|
AFTA: Laos |
Jul 1997 |
1 Jan 2010 |
|
AFTA: Myanmar |
Jul 1997 |
1 Jan 2010 |
|
AFTA: Cambodia |
Apr 1999 |
1 Jan 2010 |
|
ASEAN Japan |
Oct 2003 |
1 Dec 2008 |
|
ASEAN ANZ |
Feb 2009 |
1 Jan 2010 |
|
ASEAN China |
Nov 2002 |
1 Jan 2010 |
|
ASEAN India |
Oct 2003 |
1 Jan 2010 |
|
ASEAN S. Korea |
Nov 2004 |
1 Jan 2010 |
|
RCEP |
Nov 2020 |
? |
The respective countries within the RCEP will work on reducing 90% of their inter-country tariffs to 0 – 5% over 20 years.The unique part of the RCEP is, it brings along for the first time, a trade pact between China and Japan and South Korea and Japan.
The key areas covered by RCEP are trade in goods & rules of origin, trade remedies, dispute settlement, trade in services, investments, intellectual property and eCommerce.
Generally, to qualify for preferential tariffs, the rule of origin requires the products to be at least of 40% regional value content, which can be cumulated within the countries in the RCEP or be substantially modified at the 4-digit HS Code level. For example, steel produced in China from iron ore imported from Australia and coking coal from Indonesia, will qualify for preferential tariffs under the RCEP as long as the cumulative value of the local production content is above 40%.
So, when does the RCEP take effect? It will take effect 60 days after it has been ratified by at least six ASEAN and three non-ASEAN signatories.
Once RCEP takes effect, the respective countries work on reducing 90% of their inter-country tariffs to 0 – 5% over 20 years.
So, the first step of the world’s largest economic bloc has been taken. It is a matter of time when the agreement will take effect.
This is the first part of a series of reviews of FTAs and their impact on the ASEAN Steel Industry and we will have more views in the upcoming SEAISI newsletters.
The 2020 SEAISI e-Forum on Sustainable Construction
The 2020 SEAISI e-Forum on Sustainable Construction was held from 24 – 27 November 2020, covering both market as well as technical areas. The event ended with a very interesting Special Session on the Future of Building Construction: How Could A New Normal Look Like?
SEAISI would like to thank all our speakers and delegates for their time and effort to make this event a successful one. We hope the event has given you some latest views of how the new norm could possibly turn out.
ASEAN Japan Steel Initiative Seminar
On 14 December 2020, the ASEAN Japan Steel Initiative (a partnership between the Japan Iron & Steel Federation and the ASEAN Iron and Steel Council), organised the 2020 AJSI Webinar on Energy-Efficient and Environmental Transition towards Sustainable Steel Industry.
The opening remarks came from Mr. Masayoshi Otake from the Ministry of Economy, Trade and Industry (METI) and Mr. Nghiem Xuan Da, Chairman of the South East Asia Iron and Steel Institute (SEAISI) and President of the ASEAN Iron & Steel Council (AISC).
Various energy saving and environmental technologies and methodologies were presented by the Japanese experts from JFE Steel, Daido Steel, JP Steel Plantech, Chugai Ro, Nippon Steel. One presentation on benchmarking came from the Iron and Steel Institute of Thailand.
We would like to thank all the Japanese experts for sharing their knowledge with the members of the steel industry in ASEAN.
Goodbye 2020, Hello 2021
SEAISI will like to wish all our Directors, Committee Members, Members, Delegates, Speakers, Exhibitors, Advertisers and our many stakeholders, a Merry Christmas and a Happy New Year. May 2021 bring all of you a Healthy, Safe and Successful Year, which promises to be better than 2020.
Keep Your Distance. Wear A Mask. Stay Safe.
YEOH WEE JIN
Source:SEAISI
