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1. A briefing on the RCEP
RCEP
On November 15, 2020, the leaders of 15 participating countries witnessed the signing of the RCEP Agreement by the trade ministers. It marks the formal launch of a free trade area featuring the largest population, broadest commercial scale and greatest development potential.2020111515RCEP
Initiated by ASEAN in 2012, the RCEP went through 31 rounds of negotiations over the last 8 years. The Agreement is comprised of Preamble, 20 Chapters (Initial Provisions and General Definitions, Trade in Goods, Rules of Origin, Customs Procedures and Trade Facilitation, Sanitary and Phytosanitary Measures, Standards, Technical Regulations, and Conformity Assessment Procedures, Trade Remedies, Trade in Services, Temporary Movement of Natural Persons, Investment, Intellectual Property, Electronic Commerce, Competition, Small and Medium Enterprises, Economic and Technical Cooperation, Government Procurement, General Provisions and Exceptions, Institutional Provisions, Dispute Settlement, and Final Provisions), and four Market Access Annexes (Schedules of Tariff Commitments, Schedules of Specific Commitments for Services, Schedules of Reservations and Non-Conforming Measures for Services and Investment, Schedule of Specific Commitments on Temporary Movement of Natural Persons).RCEP2012831RCEP204
The RCEP is by far the largest free trade area by size. In 2019, the 15 member countries' population totaled 2.27 billion, GDP USD 26 trillion, export USD 5.2 trillion, accounting for around 30% of the world respectively. The establishment of the RCEP would create an integrated super-large market with around one third of the global economy.RCEP2019RCEP1522.7GDP265.230%RCEP
2. Major consensuses RCEP has reached in market liberalization
RCEP
In terms of trade in goods, the 15 parties have made arrangements for trade in goods liberalization through making offers in bilateral pairs. After the agreement enters into force, over 90% of the trade in goods in the region will eventually be duty-free, most of which will have zero-tariff immediately or within ten years. In this way, the RCEP FTA can deliver on all the commitments to liberalize trade in goods in a relatively short period of time. It is foreseeable that as general rules such as the rules of origin, customs procedures, inspection and quarantine and technical standards become effective, the synergy of tariff elimination and the removal of non-tariff barriers will gradually unleash the agreement's trade creation effect, substantially reduce the costs of intra-regional trade and product prices and raise the competitiveness of regional products to the benefit of businesses and consumers of the parties.1590%10RCEPRCEP

In terms of trade in services, seven parties, including Japan, Korea, Australia, Singapore, Brunei, Malaysia and Indonesia, made commitments using the negative list approach, while the remaining eight, China included adopted the positive list, which will be converted to negative list within six years of the entry into force of the agreement. As far as liberalization level is concerned, all the 15 parties made commitments higher than the level of their "10+1" FTAs. China's services liberalization commitments are of the highest level among China's existing FTAs, adding 22 sectors, such as research and development, management consulting, manufacturing-related services and air transport, to the 100 sectors committed at its accession to the WTO, while raising the commitment level for 37 sectors, including finance, legal services, architecture and maritime shipping. Other parties all made high-level liberalization commitments on architecture, healthcare, real estate, finance and transport, among other sectors of interest to China.7861510+11002237
On the investment side, the 15 parties all made high-level liberalization commitments through negative list on five non-service sectors, including manufacturing, agriculture, forestry, fisheries and mining, greatly enhancing policy transparency. China's investment negative list reflects the latest development in domestic reform. This is also the first time that China makes commitments on investment through negative list under an FTA, which is of great significance for improving its domestic foreign investment management system of pre-establishment national treatment plus negative list, consolidating its reform outcomes from reducing the negative list for foreign investment, and widening market access for foreign investment.155
In terms of the movement of natural persons, the parties commit to grant certain periods of residence and visa facilitation to commercial personnel of all kinds from regional countries, such as investors, corporate personnel, contracted service providers, accompanying spouses and family, engaging in various trade and investment activities. Compared to past agreements, RCEP expands the commitment scope from service providers to include all categories of natural persons that might move across borders under the agreement, such as investors, accompanying spouses and family, with a general level basically exceeding the parties' practice under existing FTAs.RCEP
3. What is RCEP like in terms of benchmarking against international high-standard free trade rules?RCEP
RCEP has expanded the scope of free trade rules of previous "10+1" FTAs, benchmarking against international high-standard rules while incorporating intellectual property, e-commerce, competition and government procurement and providing for strengthened cooperation on small and medium-sized enterprises and economic and technical cooperation.RCEP10+1
With respect to intellectual property, RCEP covers copyrights, trademarks, geographical indications, patents, industrial design, genetic resources, traditional knowledge and folklore, among others. While taking into account different development levels of RCEP countries, it remarkably enhances protection for intellectual property rights.RCEP
On e-commerce, RCEP provides for electronic authentication and signature, online consumer protection, online personal information protection, cyber security, cross-border transfer of information by electronic means and others. Besides, in accordance with Chinese laws and regulations, China for the first time includes the flow of data, information storage and other provisions in an FTA.RCEP
Regarding trade remedies, on the basis of WTO rules, RCEP makes detailed provisions on anti-dumping, countervailing, and safeguard measures, and for the first time includes "prohibition of zeroing" provisions in an FTA. Meanwhile, it draws on international high-standard rules and makes anti-dumping and countervailing investigations much more professional and transparent with a list of best practices.RCEP
On competition, RCEP excels in promoting antitrust and consumer protection. On government procurement, RCEP parties reached a consensus on active exchange of information and cooperation in government procurement, provision of technical assistance, and strengthening capacity building.RCEP
On cooperation, RCEP highlights the role of FTAs in stepping up support for and input into SMEs and economic and technical cooperation so that the provisions in the RCEP agreement can better benefit SMEs and developing economies.RCEPRCEP----TO BE CONTINUED


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More about RCEP ( Part 1)

Click LegalTips

to follow us

You may also feel interested in:
FAQs about Patent Applications in China
Rules on Counteracting Unjustified Extra-territorial Application
Weekly Legal Update-Amended Criminal Law

1. A briefing on the RCEP
RCEP
On November 15, 2020, the leaders of 15 participating countries witnessed the signing of the RCEP Agreement by the trade ministers. It marks the formal launch of a free trade area featuring the largest population, broadest commercial scale and greatest development potential.2020111515RCEP
Initiated by ASEAN in 2012, the RCEP went through 31 rounds of negotiations over the last 8 years. The Agreement is comprised of Preamble, 20 Chapters (Initial Provisions and General Definitions, Trade in Goods, Rules of Origin, Customs Procedures and Trade Facilitation, Sanitary and Phytosanitary Measures, Standards, Technical Regulations, and Conformity Assessment Procedures, Trade Remedies, Trade in Services, Temporary Movement of Natural Persons, Investment, Intellectual Property, Electronic Commerce, Competition, Small and Medium Enterprises, Economic and Technical Cooperation, Government Procurement, General Provisions and Exceptions, Institutional Provisions, Dispute Settlement, and Final Provisions), and four Market Access Annexes (Schedules of Tariff Commitments, Schedules of Specific Commitments for Services, Schedules of Reservations and Non-Conforming Measures for Services and Investment, Schedule of Specific Commitments on Temporary Movement of Natural Persons).RCEP2012831RCEP204
The RCEP is by far the largest free trade area by size. In 2019, the 15 member countries' population totaled 2.27 billion, GDP USD 26 trillion, export USD 5.2 trillion, accounting for around 30% of the world respectively. The establishment of the RCEP would create an integrated super-large market with around one third of the global economy.RCEP2019RCEP1522.7GDP265.230%RCEP
2. Major consensuses RCEP has reached in market liberalization
RCEP
In terms of trade in goods, the 15 parties have made arrangements for trade in goods liberalization through making offers in bilateral pairs. After the agreement enters into force, over 90% of the trade in goods in the region will eventually be duty-free, most of which will have zero-tariff immediately or within ten years. In this way, the RCEP FTA can deliver on all the commitments to liberalize trade in goods in a relatively short period of time. It is foreseeable that as general rules such as the rules of origin, customs procedures, inspection and quarantine and technical standards become effective, the synergy of tariff elimination and the removal of non-tariff barriers will gradually unleash the agreement's trade creation effect, substantially reduce the costs of intra-regional trade and product prices and raise the competitiveness of regional products to the benefit of businesses and consumers of the parties.1590%10RCEPRCEP

In terms of trade in services, seven parties, including Japan, Korea, Australia, Singapore, Brunei, Malaysia and Indonesia, made commitments using the negative list approach, while the remaining eight, China included adopted the positive list, which will be converted to negative list within six years of the entry into force of the agreement. As far as liberalization level is concerned, all the 15 parties made commitments higher than the level of their "10+1" FTAs. China's services liberalization commitments are of the highest level among China's existing FTAs, adding 22 sectors, such as research and development, management consulting, manufacturing-related services and air transport, to the 100 sectors committed at its accession to the WTO, while raising the commitment level for 37 sectors, including finance, legal services, architecture and maritime shipping. Other parties all made high-level liberalization commitments on architecture, healthcare, real estate, finance and transport, among other sectors of interest to China.7861510+11002237
On the investment side, the 15 parties all made high-level liberalization commitments through negative list on five non-service sectors, including manufacturing, agriculture, forestry, fisheries and mining, greatly enhancing policy transparency. China's investment negative list reflects the latest development in domestic reform. This is also the first time that China makes commitments on investment through negative list under an FTA, which is of great significance for improving its domestic foreign investment management system of pre-establishment national treatment plus negative list, consolidating its reform outcomes from reducing the negative list for foreign investment, and widening market access for foreign investment.155
In terms of the movement of natural persons, the parties commit to grant certain periods of residence and visa facilitation to commercial personnel of all kinds from regional countries, such as investors, corporate personnel, contracted service providers, accompanying spouses and family, engaging in various trade and investment activities. Compared to past agreements, RCEP expands the commitment scope from service providers to include all categories of natural persons that might move across borders under the agreement, such as investors, accompanying spouses and family, with a general level basically exceeding the parties' practice under existing FTAs.RCEP
3. What is RCEP like in terms of benchmarking against international high-standard free trade rules?RCEP
RCEP has expanded the scope of free trade rules of previous "10+1" FTAs, benchmarking against international high-standard rules while incorporating intellectual property, e-commerce, competition and government procurement and providing for strengthened cooperation on small and medium-sized enterprises and economic and technical cooperation.RCEP10+1
With respect to intellectual property, RCEP covers copyrights, trademarks, geographical indications, patents, industrial design, genetic resources, traditional knowledge and folklore, among others. While taking into account different development levels of RCEP countries, it remarkably enhances protection for intellectual property rights.RCEP
On e-commerce, RCEP provides for electronic authentication and signature, online consumer protection, online personal information protection, cyber security, cross-border transfer of information by electronic means and others. Besides, in accordance with Chinese laws and regulations, China for the first time includes the flow of data, information storage and other provisions in an FTA.RCEP
Regarding trade remedies, on the basis of WTO rules, RCEP makes detailed provisions on anti-dumping, countervailing, and safeguard measures, and for the first time includes "prohibition of zeroing" provisions in an FTA. Meanwhile, it draws on international high-standard rules and makes anti-dumping and countervailing investigations much more professional and transparent with a list of best practices.RCEP
On competition, RCEP excels in promoting antitrust and consumer protection. On government procurement, RCEP parties reached a consensus on active exchange of information and cooperation in government procurement, provision of technical assistance, and strengthening capacity building.RCEP
On cooperation, RCEP highlights the role of FTAs in stepping up support for and input into SMEs and economic and technical cooperation so that the provisions in the RCEP agreement can better benefit SMEs and developing economies.RCEPRCEP----TO BE CONTINUED


Tap "Read More" to visit our website

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