Implementing RCEP, more incentives for export

Trường Lăng

June 9, 2022


Implementing RCEP, more incentives for export

Trường Lăng

June 9, 2022

The Regional Comprehensive Economic Partnership (RCEP) agreement is the latest free trade agreement coming into force early 2022. This agreement is being used by industries and enterprises to accelerate export and to get the preferential treatment.

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Huge market

Mr. Nong Duc Lai, Commercial Counselor, Vietnam Trade Office in China spoke at the consultation session on export to RCEP market held on May 27 that the demand in aquafood consumption in this market is up to 67.3 million tons/year. It is a very good opportunity for Vietnamese enterprises to accelerate export.

Said Mr. Lai, RCEP opens the opportunities for Vietnamese aquafood exporters to join the new production and value chains in the region, and to help enterprises promote aquafood export to member countries’ markets, especially the leading trading partners such as Japan, Korea, China, Australia…, thanks to the relaxed rules of origin.

For Australia, Vietnam’s aquafood export in the first four months of 2022 reached US$128.1 million, up 53.8% over the same period in 2021.

The Regional Comprehensive Economic Partnership (RCEP) agreement promotes the economic recovery, as well as the region’s long-term prosperity. RCEP creates a big market with the scale of consumers accounting for about 30% of the global population, bringing the global revenue 209 billion USD a year and USD 500 billion to the global trade by 2030.

RCEP opens more opportunities for Vietnamese enterprises to boost export, join the new value chains in the region, and attract foreign investment.

Along with the agreements to open markets for goods, services and investments, the difference is that RCEP creates a framework to simplify customs procedures and establish the rules of origin, to facilitate trade, to create a common connection space for manufacturing throughout ASEAN.

There are many advantages for Fiber when RCEP comes into effect. In 2021, Vietnam’s export of textile fibers and yarns of all kinds reached US$5.6 billion, up 50.2%, only Chinese market imported nearly US$3 billion, up 39% over the same period last year.

Thanks for the characteristics of imported raw materials mainly from China and ASEAN – a member of RCEP, exporters can choose RCEP for the highest and most favorable incentives.

The export prospect for the cashew industry is very significant. With an export scale of over USD3.6 billion in 2021, the deep-processed kernel product has an import tax of 5% before signing RCEP and 0% after signing the agreement. This is a favorable factor for deep processing enterprises to boost production and export to these markets in the coming time, said Mr. Dang Hoang Giang, Vice Chairman of Vietnam Cashew Association (Vinacas).

In 2021, RCEP market accounts for 17.25% of Vietnam’s total cashew kernel export, of which China accounts for 10.56% of the market share.

Vietnam’s cashew nuts is also occupying an outstanding import market share in many RCEP member countries, such as accounting for 99% of the cashew kernel import market share of Australia, 97.8% of China, and 97.66% of New Zealand, 78.61% of Korea, 55.22% of Japan…

Strengthening the supply chain

The implementation of RCEP will not only facilitate export activities, but also create the new supply chain in the region.

Acknowledged Mr. Nguyen Anh Duong, the Manager of the General Research Department (Central Institute for Economic Management, Ministry of Planning and Investment), the difference makes RCEP peculiarity is its association with the production networks and the regional supply chain. This is not only a trade and investment agreement, but also attaches Vietnam to a large playground. That is the production chain in the region.

“RCEP includes Vietnam’s cooperation in the region into a new chapter, when Vietnam attracts the attention of a series of new trading partners. RCEP helps the economy increase exports, increase income, through the reduction of tariff and non-tariff barriers as well as initiatives related to one stop mechanism or paperless trade… , thereby helping commercial activities take place faster, timely, less costly, larger scale”, analysed Mr. Duong.

RCEP is affirmed to create a new supply chain in the region and that Vietnam will become a “link” of that supply chain, to create the great opportunities for export, when export along the supply chain is increased, Vietnam will reduce the risk of applied trade defense measures, said Ms. Nguyen Thi Thu Trang, Director of the Center for WTO and Integration (Vietnam Federation of Trade and Industry – VCCI).

Said Ms. Trang, one of RCEP’s most remarkable aspects is that the agreement is designed to cut costs and time for enterprises when allowing the export of goods to any member country of RCEP without meeting the specific requirements of each country.

“If in Comprehensive and Progressive Trans-Pacific Partnership Agreement, it is difficult for Vietnam to take advantages of preferential tariffs for textile products because most of Vietnam’s raw material supply comes from China, when participating in RCEP, the burden of input material importing costs will be reduced thanks to tariff incentives,” analyzed Ms. Trang.

Source : Baodautu

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