Businesses need to grasp commitments in RCEP implementation

According to tariff commitments in the RCEP Agreement, ASEAN countries will remove about 85.9 to 100 percent of tariff lines and member states commit themselves to removing 87.8 to 98.3 percent of tariff lines for Vietnam. The longest roadmap for tariff elimination is 15-20 years since the RCEP became valid.

A representative of the Multilateral Trade Policy Department under the Ministry of Industry and Trade (MoIT) said that tariff lines of many export goods were eliminated immediately after the agreement came into effect. They included seafood, meat, vegetables, and fruits, agricultural products; mechanical equipment, spare parts; computers, electronic equipment and components, chemicals and chemical products; medicines; some kinds of shoes, sandals; textile raw materials, garments and textiles, finished clothes, and more.

In addition, businesses need to pay attention to a number of other commitments on trade defense. Accordingly, RCEP allows the transitional safeguard mechanism from the date the agreement coming into force until the end of eight years after the date of completion of the elimination or reduction of tariffs for each type of goods. It also adds a number of specific regulations on notification, consultation, prohibition on the application of zeroing calculation method, disclosure of key data, information processing and on-site verification procedures; including principles of conduct in service and trade such as: national treatment (NT), most favored nation treatment (MFN), market access, local presence, and more.

RCEP provides regulations covering all four pillars of investment protection, liberalization, promotion, and facilitation. In addition, the agreement commits to promoting and increasing awareness of foreign investment through measures, such as encouraging investment between parties, organizing investment promotion events; exchanging information on issues of mutual concern related to investment promotion; at the same time creating a legal environment for all types of investment; simplifying investment registration and approval procedures; strengthening dissemination of information about investment policies, laws and procedures.

With the current market opening commitments and the process of tariff liberalization implemented over the past years, Vietnam is not under much pressure on the level of market opening when implementing the RCEP agreement. The implementation of commitments under the RCEP framework basically does not create pressure on Vietnam's import tax reduction. However, to implement and exploit advantages from the agreement, businesses are recommended to self-innovate, proactively improve competitiveness, and participate in supply chains.

At the same time, Vietnamese businesses must proactively research and grasp the commitments of Vietnam and partner countries, especially in the field of business and production, such as tariffs, rules of origin, import procedures, and quality standards in the RCEP markets. In addition, they need to coordinate closely with the Government and associations to implement the agreement to remove market barriers in RCEP member countries; actively participate in cooperation and trade promotion activities in the region to search for cooperation opportunities and supply chain connection; develop suitable production and business strategies to maximize opportunities from the agreement.