Australia has signed the Regional Comprehensive Economic Partnership (RCEP). The RCEP is currently the world’s largest free trade agreement (FTA) and covers up to 1/3 of global trade. It has taken eight years to negotiate and involves fifteen countries (Australia, China, Japan, South Korea, New Zealand, Singapore, Indonesia, Malaysia, Cambodia, Laos, Myanmar, Philippines, Thailand, Brunei and Vietnam).
Although RECP will cover 58% of Australia’s imports and exports, the fact Australia already has FTAs with the RCEP members, either directly and/or via ASEAN, will limit its impact. There will however be benefits.
The key benefits of Regional Comprehensive Economic Partnership for importers and exporters will be:
- The improved likelihood for goods satisfying rules of origin. This is because content from all RCEP members is counted when assessing whether an exported good qualifies under RCEP. Under current bilateral FTA’s only content from the two parties to that agreement is considered qualifying content.
- Declarations of Origin may be used, replacing the need to obtain a certificate of origin issued by an authorised body.
- Declarations of Origin and Certificates of Origin may be submitted in electronic form; and
- There will be better access into RCEP countries for Australian investors and exporters.
While the RCEP offers some benefits, it will not circumvent the Direct Consignment Rules currently imposed by other FTA’s to which Australia is a signatory. Transshipments via other RCEP members are subject to strict requirements whereby such goods must remain strictly under customs control.
The RCEP is currently a signed agreement. The RCEP comes into force once it has parliamentary approval and member countries have ratified it. Once a minimum of 6 ASEAN countries and 3 other non-ASEAN countries have ratified the agreement it will come into force for those countries. We expect to occur in late 2021 or early 2022.
Importers and exporters will need to weigh up the benefits of the RCEP for them. Where goods are moving duty-free via another FTA, the only reason to change may be simplified certificates of origin.
Please get in touch with me via email Peter.firstname.lastname@example.org or a Magellan Logistics customs broker should if you have any further questions about the RCEP.
For more information please visit DFAT