ASEAN countries look forward to RCEP dividends


The Regional Comprehensive Economic Partnership (RCEP) will come into effect on January 1, 2022, and its dividends are highly anticipated by ASEAN countries. Some people from ASEAN countries believe that the launch of the world's largest Free Trade Zone will bring tangible benefits to domestic enterprises, significantly boost the economies of ASEAN countries, and accelerate the process of ASEAN economic integration.

According to the "Cumulative Rules of Origin" in RCEP, as long as the value-added part of the product during processing belongs to 15 member states, and the cumulative value-added exceeds 40%, it can enjoy the corresponding tariff preference.

In 2022, the Cambodian Ministry of Commerce expects that Cambodian agricultural products and industrial products will enjoy preferential tariff treatment under the RCEP framework. RCEP can boost Cambodia's GDP by about 2%, with exports and investment increasing by 7.3% and 23.4%, respectively.

The president of Thai-Chinese Rayong Industrial Zone Co., Ltd said that many export-oriented enterprises in Thailand import raw materials and components from RCEP member countries. The Cumulative Rules of Origin allows enterprises to enjoy more and more preferential tax policies, which will help them expand their business.

Since the 1st, RCEP has officially entered into force for 10 countries, including, Brunei, Cambodia, Laos, Singapore, Thailand, Vietnam, China, Japan, New Zealand, and Australia. South Korea will join the implementation on February 1. The remaining member states will also take effect after completing the domestic ratification process.

Ramon M. Lopez, the Secretary of the Philippine Department of Trade and Industry (DTI), recently urged the Senate to ratify RCEP as soon as possible, believing that joining this agreement is crucial to the Philippine economic recovery. Data show that in 2020, 51% of Philippine exports, 68% of imports, and 58% of foreign direct investment involved RCEP member countries. After joining RCEP, the exports of fruits, seafood, clothing, and paper from Philippine to East Asian countries such as China, Japan, and South Korea will benefit significantly.