MoIT helps businesses to prepare for RCEP

Monday, Sep 27, 2021 16:19

The RCEP agreement will create the world largest free trade area of 2.2 billion people. — VNA/VNS Photo Tran Viet

The Ministry of Industry and Trade (MoIT) is collecting comments on a draft circular regarding the Rules of Origin regulations for the Regional Comprehensive Economic Partnership (RCEP).

According to the MoIT, after 8 years of negotiations on the RCEP agreement, ten ASEAN countries and five partner countries (Australia, China, Japan, Korea and New Zealand) officially signed the agreement in October 2020.

When the agreement comes into force Viet Nam will be part of the largest free trade area in the world, with 2.2 billion consumers, and account for about 30 per cent of global GDP.

The RCEP will eliminate about 92 per cent of import tax between the signatory countries within 20 years, and establish common rules for e-commerce, commerce and intellectual property rights.

In particular, RCEP is designed to cut both costs and time for traders by allowing them to export goods to any of the signatory countries, without having to meet the specific requirements of each member country.

The ministry said Vietnamese enterprises will benefit from reduced transaction costs and a more business-friendly environment, as existing regulations in different ASEAN FTAs are harmonised under the RCEP agreement.

Regarding the import and export of goods, Tran Thanh Hai, deputy director of the ministry's Import-Export Department, said that although ASEAN countries and Viet Nam have some separate FTAs, the RCEP can be considered as both an upgrade and a set of higher requirements for the tradings within the region.

Hai said: "When the RCEP agreement comes into effect it will create vitality in the Vietnamese economy, as relationships between Viet Nam and other Asian countries are further developed."

Luong Hoang Thai, director of MoIT's Multilateral Policy Department, said the RCEP agreement is expected to make an important contribution to the recovery of the regional economy after the COVID-19 pandemic.

The Rule of Origin regulations on goods means, that instead of applying five sets of rules from five different agreements, the signatory countries can instead trade more freely.

The establishment of this agreement will create opportunities for Vietnamese businesses to develop new supply chains in the region.

Thai added that the recent volatility around the world has caused prolonged disturbances to supply chains. The formation of the world's largest free trade area will allow a more stable export market, meaning Viet Nam can focus instead on building an export-oriented production base for the world.

The RCEP agreement will also create a legally binding framework on trade policy, investment, intellectual property, e-commerce and dispute settlement.

In order to fully exploit the benefits of the RCEP agreement, Vietnamese enterprises need to carefully study the agreement, especially those related to the business sector, said Thai.

Experts from MoIT recommend that businesses prepare for the implementation of RCEP by strengthening the domestic market, improving product quality, and accurately identifying their brands.

They said businesses must develop a plan to open their markets and proactively prepare for some of the adverse effects caused by the agreement.

To help local businesses join the RCEP, the circular issued by MoIT regarding Rules of Origin of goods details the regulations agreed upon by the member countries.

The draft said that the certificate of origin will be a common form agreed upon by all members, with a specific reference number expressed in English and bearing the signature and seal of the issuing organisation. The certificate of origin will be valid for one year from the date of issue.

To accommodate feedback on the Rule of Origin certificate, MoIT is asking for comments on the draft to be submitted via the ministry's web portal. — VNS

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