Economic Observer Network reporter Li Si/wen Since the "Regional Comprehensive Economic Partnership Agreement" (hereinafter referred to as "RCEP") was officially signed during the East Asia Cooperation Leaders' Meeting on November 15, RCEP has continued to grow hot.
Economic Observer.com interviewed Zhang Jianping, director of the Research Center for Regional Economic Cooperation of the Ministry of Commerce Research Institute, and a doctoral supervisor of the WTO Research Institute of the University of International Business and Economics on key issues such as the impact of RCEP on China, India’s withdrawal from the group, and the relationship with TPP.
The world's most potential regional free trade agreement
RCEP includes 15 member states, 10 member states of ASEAN, Japan, China, South Korea, Australia and New Zealand. It is known as the world’s most potential regional free trade agreement, because RCEP will cover 29.7% of the global population, and its economic scale will account for 28.9% of the global economy, which will be larger than the US-Mexico-Canada Agreement (USMCA), CPTPP or EU The proportion of 28 countries. In terms of investment, RCEP will attract foreign direct investment inflows to account for 38.3% of the global total.
According to the official interpretation of the Ministry of Commerce, RCEP is a modern, comprehensive, high-quality, and mutually beneficial large-scale regional free trade agreement. RCEP is currently the world's largest free trade zone and an "integrator" of economic and trade rules in the region, achieving high quality and inclusive unity.
Zhang Jianping said that the "rules of origin" in the RCEP agreement are very worthy of attention, which means that more companies can bring a substantial reduction in costs. RCEP uses the principle of regional accumulation in this region, so that the value component of the origin of the product can be accumulated in the region composed of 15 member states. At the same time, compared with the previous "10+1" agreement, RCEP has further enriched the types of certificates of origin. In addition to traditional certificates of origin, it will also allow approved exporters' declarations and exporters' independent declarations.
In addition, another important concern of RCEP is that this is the first time that China and Japan have reached a bilateral tariff reduction arrangement, achieving a historic breakthrough. According to the "Nihon Keizai Shimbun" report, the tariffs between China and Japan will be greatly changed from the current 8%. 86% of industrial products exported from Japan to China may have tariffs removed. In the future, Japanese auto parts exported to China (including The key components of traditional fuel vehicles and steel products, etc.) will achieve zero tariffs for nearly 90%.
Zhang Jianping believes that China's auto parts are already very competitive, and Japanese and South Korean companies are now purchasing a large number of parts and components in China. "This kind of industry is both competitive and complementary." However, before seeing the tax reduction data of the specific agreement, “we can only say that in terms of parts and components, China’s current level can participate in competition. This problem is not really big. But in terms of complete vehicles, the key zero In terms of components, such as engines and gearboxes, we face the pressure of competition from Japan and South Korea."
Another hot topic about RCEP is India's midway exit. RCEP was initiated by 10 ASEAN countries and invited six dialogue partner countries including China, Japan, South Korea, Australia, New Zealand and India to participate. In November 2019, India withdrew from the RCEP negotiations in the final stage of the negotiations. However, the remaining 15 countries have made special arrangements in the agreement so that India can return to the agreement.
Regarding whether India, a South Asian country with a population of 1.3 billion, will return to RCEP in the future, Zhang Jianping said: "We don't want to make a final decision. We welcome India to come back whenever we are ready and willing to come back. But from a judgment point of view, it may take time. But we don’t want to make a conclusion to others."
RCEP's impact on China's economy
Tariff reduction among RCEP members is mainly based on the commitment to immediately reduce tariffs to zero tariffs and reduce tariffs to zero tariffs within ten years, so that the RCEP free trade zone is expected to fulfill all the promises of liberalization of trade in goods in a relatively short time.
How joining RCEP will affect China's economy, and which industries will bring opportunities or impacts is one of our most concerned issues. In this regard, Zhang Jianping pointed out: “RCEP provides a very huge market space, coupled with the improvement of China’s overall competitiveness, our price/performance ratio is still relatively advantageous. Therefore, according to some quantitative model calculations, almost all of China’s The industry has benefited in this process."
Zhang Jianping especially emphasized the positive impact of RECP on the electronic information industry. He said: "Because the overall competitiveness of China's electronic information industry is particularly strong, and it is China’s largest pillar industry, whether it is processing and assembly, or independent brands, our market share Both are very high. Therefore, in the RCEP market, the electronic information industry will obtain relatively large benefits. It can also play an active role in the adjustment and transformation of China's economic structure."
"China has proposed a new dual-cycle development pattern and high-quality development based on domestic large-scale cycles. RCEP provides us with a huge international cycle mechanism platform, on which we can develop two resources more efficiently: International resources and domestic resources; at the same time, it is better to develop two markets: the international market and the domestic market." "Because RCEP has financial cooperation rules in all aspects of trade and investment, finance, and measures for trade and investment liberalization and facilitation." "Our transaction costs will be significantly reduced, and efficiency will be greatly improved. In the future, we will see that China's foreign trade and two-way investment will be significantly improved, and our employment and GDP will also gain new growth momentum on this platform. And support." Zhang Jianping said.
The regional supply chain will be closer
Under the background of more and more detailed international division of labor and further acceleration of globalization and regional integration, Zhang Jianping believes that the future global industrial chain will be more agglomerated and will form an industrial agglomeration effect and industrial scale. He believes that based on RCEP's rules, RCEP will develop into the world's most comprehensive, complete, and most tactical supply chain system in the future.
Zhang Jianping said, “Especially under adverse circumstances, we will be more closely connected with the supply chains of RCEP member countries.” In the future, China’s intra-regional trade and intra-regional investment will increase significantly, such as China’s overseas industrial parks in ASEAN countries. Speed up further. This will bring us more jobs and taxes, and will also improve our overall level of social development.
Now the rules of global trade and investment are changing. Zhang Jianping believes that RCEP represents an important part of the development of trade and investment rules in the 21st century. We are also making continuous efforts and contributions to the formation of a new global trade and rule system.
From a global perspective, RCEP is an important supplement and support to the WTO’s multilateral trading system. The 21st century is the century of the Asia-Pacific. The Asia-Pacific will move towards integration in the future, and RCEP will play a very important guiding role in it.
RCEP V.S. TPP
China did not participate in the Trans-Pacific Partnership Agreement ("TPP") that the United States began to negotiate during the Obama administration. After the Trump administration announced its withdrawal from the TPP in 2017, Japan took over and changed its name to the comprehensive and advanced TPP (hereinafter referred to as "CPTPP"), and China still did not participate.
Some believe that RCEP is a strategy adopted by China to hedge the impact of TPP. Zhang Jianping pointed out that for developing countries such as China and Indonesia, RCEP is more comfortable and more maneuverable. TPP has a higher standard and is more comfortable for developed countries. "But if China does not join the CPTPP and the United States returns to the TPP, our participation in RCEP will reduce China's losses and have a hedging effect."
The United States is about to usher in a new government in two months. Zhang Jianping believes that if the next government of the United States is the Democratic Party, the United States will most likely return to the TPP. If the next government is the Republican Party, it will not return to the TPP.
Zhang Jianping also emphasized: "In fact, we are not opposed to TPP. On the contrary, we are open and inclusive towards CPTPP. We are also studying and exploring how to use the two tracks of RCEP and TPP to jointly move toward the future Asia-Pacific Free Trade Area."
