The RCEP Agreement was officially signed
On November 15, Beijing time, the signing ceremony of the Regional Comprehensive Economic Partnership (RCEP) was held via video link. The economic and trade ministers of 15 member states formally signed the agreement. The signing of the agreement marks the successful launch of the construction of the East Asia Free Trade Area, which has the largest population, the most diverse membership structure and the greatest development potential in the world.
What is the RCEP Agreement?
The RCEP Agreement was initiated by the 10 ASEAN countries and invited six dialogue partner countries: China, Japan, South Korea, Australia, New Zealand, and India to participate. It aims to establish a 16-country unified market by reducing tariffs and non-tariff barriers. free trade agreement. RCEP negotiations were officially launched in November 2012, involving more than ten areas including small and medium-sized enterprises, investment, economic and technological cooperation, and trade in goods and services.
As of 2018 statistics, the 15 member states of the agreement will cover about 2.3 billion people in the world, accounting for 30% of the global population; the total GDP exceeds 25 trillion US dollars, and the included area will become the largest in the world. free trade zone.
To put it simply, the formal agreement includes the following components:
1) Tariff concessions among RCEP members to reduce to zero tariffs immediately and to zero tariffs within ten years Mainly based on its commitments, the free trade zone is expected to achieve major phased construction results in a relatively short period of time. Among them, China and Japan reached a bilateral tariff reduction arrangement for the first time, achieving a historic breakthrough. According to the official website of the Ministry of Finance, in the next step, the Ministry of Finance will actively carry out work related to tariff reductions in the agreement.
2) The RCEP agreement aims to form a unified system of rules in the region, reduce operating costs, and reduce uncertainty risks in business operations.
3) In terms of investment, the agreement adopts a more efficient negative list approach for investment access negotiations, which means that the threshold for small and medium-sized enterprises to enter “countries” in the region will be greatly reduced.
Generally speaking, the signing of the RCEP agreement will effectively boost confidence in regional trade and investment, strengthen collaboration in the industrial and supply chains of countries in the region, enhance the ability of all parties to cooperate in fighting the epidemic, and boost the economies of countries in the region. recovery and promote long-term prosperity for the region. The RCEP agreement strongly supports free trade and the multilateral trading system, helps form positive expectations for the global economy, and promotes post-epidemic recovery of the global economy. At the same time, RCEP members are all important economic and trade partners of my country. As of January-September 2020, my country’s total trade with other RCEP members reached US$1.055 billion, accounting for about one-third of China’s total foreign trade. Therefore, the achievement of RCEP will help expand China’s export market space, meet domestic import consumption demand, strengthen regional industrial and supply chains, and help stabilize foreign trade and foreign investment.
What impact will it have on the polyester industry chain?
As for the main products in the current polyester industry chain, among the varieties with high import dependence, the import tariffs of PX and MEG are 2% and 5.5% respectively. However, according to the China- Under the ASEAN Free Trade Area Agreement, our import tariffs for the six ASEAN countries (Brunei, Indonesia, Malaysia, Myanmar, Singapore, Thailand, etc.) have been reduced to 0% since 2010. Therefore, after the signing of RCEP, in addition to the above-mentioned 6 countries, the tariffs on PX and MEG from the Philippines, Cambodia, Laos, Japan, South Korea, Australia, and New Zealand will also gradually drop to 0%.
Table 1 List of tariffs in the polyester industry chain in 2020 (unit: %)
However, since the original tariff of PX is only 2%, even if the tariffs of Japan and South Korea are reduced, consider Now that China is in a period of rapid expansion of production capacity, the entire PX process landscape has been reshuffled, and the increase in imports will be relatively limited;
As for MEG, in addition to the Chinese market, the current main production areas for MEG are the Middle East, North America and other places. Mainly, in 2019, except for the 6 ASEAN countries that have zero tariffs, the import volume of the remaining 7 countries was 850,000 tons, accounting for 8.5%; in the first three quarters of 2020, the total import volume was 478,000 tons, accounting for 5.5%; However, because the total MEG production capacity of these seven countries currently only exceeds 3 million tons, excluding the amount used by the country itself and the amount already exported to China, further increases are very limited. Therefore, tariff reductions and exemptions have a limited impact on the increase in MEG imports.
Table 2 Comparison of the total import volume of polyester products from countries included in the RCEP Agreement in the past two years (unit: 10,000 tons, %)
PS. This table does not include those that have not yet been added. Agreement India;
PS. This table includes India, which has not joined the agreement yet;
Let’s look at the export of polyester products.
From the data point of view, among my country’s three major polyester products, the proportion of RCEP agreement countries in the past two years has basically been around 25%. (If India, which is currently “not willing to play together” is added in, the overall export share can be raised to 30-35%, which is enough to understand why it is unwilling to play together, and India’s interest in our PTA, polyester bottle flakes, etc. There are anti-dumping accusations on exports.)
my country’s bottle flakes are currently mainly exported to Eastern Europe, South Africa and other countries. Among the top ten exporting countries, the countries where the RCEP agreement is located are the Philippines, South Korea, Australia, and Malaysia. ; my country’s polyester filament exports are currently mainly directed to countries such as South America, South Asia, and Southeast Asia (labor costs are relatively high).(Mainly low-cost countries), the top ten exporting countries are Vietnam, South Korea, and Indonesia. The top ten exporting countries are Vietnam, South Korea, and Indonesia. The current main destinations for my country’s polyester staple fiber exports are the Americas, South Asia, Eastern Europe, Southeast Asia, and other countries. The top ten Among the large exporting countries, the countries where the RCEP agreement is located are Vietnam and Indonesia.
Table 3 Comparison of total export volume of polyester products from countries included in the RCEP Agreement in the past two years (unit: 10,000 tons, %)
PS. This table does not include those that have not yet been added. Agreement India;
PS. This table includes India, which has not yet joined the agreement;
Therefore, the overall export growth seems to be positive for the polyester sector, but it is the same as the import just now. The main exporters of filament and staple fiber already enjoy zero tariffs; although polyester bottle flakes have been newly added to the Philippines, South Korea and Australia with zero tariffs, South Korea is also the main exporter of polyester bottle flakes. In the future, it may India, which will join in the fun, is a major producer of bottle flakes. The current price war in the Asian sector will certainly not be alleviated by the conclusion of the RCEP agreement.
Of course, from a long-term perspective, the most far-reaching impact of the RCEP may be on the future industrial integration of the entire East Asia region. From the perspective of textiles and clothing, China, Japan and South Korea, as traditional manufacturing countries The export capacity of raw materials and the ability to undertake high-end manufacturing, and the ability of ASEAN countries to undertake the low-end manufacturing part of textiles; if the export capabilities of Australia and New Zealand as natural resource suppliers can be integrated and integrated to form a virtuous cycle, it will have a great impact on East Asia and even the rest of the world. The whole world has a deeper meaning. </p
