Rules of Origin: RCEP’s most potent ingredient
Spanning 10 ASEAN members, and Australia, China, Japan, South Korea, and New Zealand, the Regional Comprehensive Economic Partnership (RCEP) seeks to streamline trade agreements across 15 economies. These 15 economies amount to over a third of the world’s GDP, which stood at US$87.34 trillion in 2019. The partnership deal is expected to increase global national income by US$186 billion annually by 2030, and add 0.2% to the economy of its member states.
Key benefits of the RCEP are tariff eliminations of about 92% of goods traded amongst its member states. It will also harmonise tariff standards to bring down current divergent tariff rates from an average of 5.6% to 0% within the RCEP economic bloc. Even more ground-breaking is RCEP’s success in creating a common “Rules of Origin”. The first of its kind, this will give companies in RCEP countries incentives to look within the trade region for suppliers as parts from any member nation will be subjected to equal tax treatment.
What strategies would help ASEAN companies reap benefits of the RCEP’s Rules of Origin?
For media enquiries, please contact:
Manager, Group Marketing Communications
Spire Research and Consulting
Phone: (65) 6838 5355