Economic recovery coming into focus

Danial Norjidi

Aspects of the Regional Comprehensive Economic Partnership (RCEP) agreement were discussed in a recent webinar titled ‘Unlocking RCEP for Business: Trade for Goods II’.

Organised by the ASEAN Secretariat in collaboration with the East Asia Business Council, the webinar was held on September 3 and is the second in a series. The webinar focussed on Rules of Origin (ROO) and Customs Procedures and Trade Facilitation (CPTF) of the RCEP Agreement.

The RCEP agreement was signed in November last year, and involves 15 participating countries – Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam, Australia, China, Japan, the Republic of Korea and New Zealand.

Deputy Secretary-General for ASEAN Economic Community Satvinder Singh delivered opening remarks at the webinar, highlighting the importance of trade in goods for ASEAN and how the RCEP agreement can help ASEAN’s trade to expand. He noted that ASEAN’s overall value in trade in goods was recorded at USD2.66 trillion, down 5.5 per cent from the previous year due to the pandemic.

“I think this is why all of us in the ASEAN and our private sectors are looking forward to the RCEP agreement, hoping that it will help to contribute to our economic recovery and our resilience,” he said.

“Therefore, I do believe that good understanding of the technicalities and the details of the regulations under the RCEP agreement, especially among our small and medium-sized enterprises (SMEs), will help assist the business community in the region to benefit from the preferences that have been negotiated.”

Looking ahead, the deputy secretary-general said, “What is important is taking the situation as we see it today, most of the RCEP participating countries, they are targetting January 1, 2022, the date of entry of the force of the agreement because we believe the RCEP agreement is going to bring tangible benefits to businesses in the region.

“The agreement is targetted to help lower our trade costs. It will also help to further integrate our ASEAN producers into the global value chains by simplifying and streamlining the rules related to trade in goods. I think we all strongly believe that RCEP is going to help businesses in the ASEAN to harness more opportunities among the participating countries. We are hoping that new demand is generated for all.”

The deputy secretary-general said that, for that to happen, the simplified trade rules under the RCEP agreement, especially the ROO and CPTF measures, will give value addition on top of the existing ASEAN Plus One Free Trade Agreements (FTAs).

He noted that the RCEP aims to streamline the different rules that exist today across the participating countries into a single set of rules.

The Deputy Secretary-General also highlighted the need to ensure an inclusive, effective and efficient implementation and utilisation of the RCEP agreement once it enters into force.

He said that the agreement includes a dedicated chapter on economic and technical cooperation as well as a cooperation provision under other chapters, including the customs chapter.

“Now these provisions, they all aim to maximise mutual benefits among the parties, and since in most of the ASEAN member states, the SMEs represent almost close to 95 to 97 per cent of all firms, and they account for almost 60 to 80 per cent of employment, it’s important that we ensure their participation and understanding of the technical cooperation programmes. And I do feel that these programmes will be inclusive and they will help the acceptance amongs the SMEs as well as the RCEP utilisation rate.”

Singh added that efforts are being taken to increase business awareness, including the webinar. “Our hope is that these kinds of events will improve the understanding of the RCEP agreement among the private sector, who are going to be the main beneficiaries.”

According to a press statement by the ASEAN secretariat, the webinar brought in experts, who were involved in the RCEP negotiations, to explain how the RCEP ROO and CPTF chapters work to facilitate the movement of trade in goods within RCEP.

It also discussed the advantages brought about by these chapters for businesses in the region, especially to micro, small and medium enterprises.

It was shared that presenters and panellists at the webinar acknowledged that ROO and CPTF chapters make the RCEP agreement better and more trade facilitative than the ASEAN Plus One FTAs.

“The ROO Chapter is one of the chapters that value-adds the most to the ASEAN Plus One FTAs in terms of streamlining different rules into just a single set rule, and provides more options for the business to claim RCEP origin status of products, ie Certificate of Origin or Declaration of Origin.

“The various presentations also sought to guide businesses on how to take advantage of the opportunities brought about by the RCEP ROO and CPTF chapters, including the step-by-step checking whether their products are eligible for RCEP tariff preferential treatments.”

The press statement also highlighted that a recent study by the Peterson Institute for International Economic suggests that the RCEP agreement will further expand trade among its members; directly contributing to their economic growth.

It said that, based on the study, by 2025, the RCEP agreement is projected to boost its members’ exports by over 10 per cent and by 2030 add around 0.2 per cent to GDP growth in the region.

The webinar highlighted that the realisation of RCEP’s potential will depend on its timely entry into force and the full, effective, and inclusive implementation of the Agreement by its members.

“Following the signing of the RCEP agreement last year, signatory states are currently undertaking their respective ratification processes and aim to complete them within this year,” the statement said.