General

From January 2, 2023, the Regional Comprehensive Economic Partnership Agreement (RCEP) will enter into force for Indonesia. Recently, at the RCEP Shandong Enterprise Service Center, Qingdao Customs officers are working with Sun Junzhi, the general manager of Qingdao Sanmu Fisheries Co., Ltd., to design a benefit sharing scheme for enterprises after RCEP takes effect in Indonesia.

Qingdao Sanmu Aquatic Products Co., Ltd. is an international trade enterprise engaged in aquatic products processing and export. After importing frozen salmon, it is packaged and exported to Southeast Asia and other overseas markets. In the Indonesian market alone, the enterprise exports more than 20 million yuan of frozen salmon every year.

The rules of origin of the China ASEAN Free Trade Agreement stipulate that the frozen salmon section shall be subject to the standard of origin of "Chapter Change". As the customs codes of frozen salmon section and raw materials used for processing frozen salmon belong to the same chapter, which cannot meet the origin standard of "chapter change", the company cannot enjoy the tariff reduction under the China ASEAN Free Trade Agreement, and still needs to pay the import tariff rate of 10% when clearing customs in Indonesia.

"Through the specialized guidance of the customs, we learned that the origin standard of frozen salmon section under RCEP is not less than 40% of the regional value, which is much lower than the threshold of the 'Chapter Change' of the China ASEAN Free Trade Agreement." Sun Junzhi, the general manager of the company, said that the frozen salmon section exported to Indonesia by enterprises from January 2 next year can enjoy zero tariff treatment with the RCEP certificate of origin. "For the aquatic product processing industry with low profits, it is a new opportunity and great benefit to enjoy such substantial tariff concessions, which will help the export volume of international trade enterprises increase significantly."

RCEP is a free trade agreement with the largest population, the largest economic and trade scale and the greatest development potential in the world. Benefiting from the advantages of natural geography and industrial institutions, Shandong has close economic and trade cooperation with RCEP member countries. According to the statistics of Qingdao Customs, in the first 11 months of 2022, Shandong's imports and exports to other 14 member countries of RCEP accounted for 38.1% of the province's total foreign trade imports and exports. After RCEP takes effect in Indonesia, Shandong will gain new opportunities in benchmarking international high-level economic and trade rules and accelerating institutional opening.

"ASEAN is Shandong's largest trade market, and Indonesia is one of Shandong's important international trade partners in ASEAN." Yao Yong, a senior director of Qingdao Customs and Tariff Office, said that in the first 11 months of this year, Shandong's export value to Indonesia reached 39.01 billion yuan, up 29.3% year on year, even though the China ASEAN Free Trade Agreement has been implemented for many years, However, the effectiveness of RCEP in Indonesia can still enable some enterprises to enjoy "from scratch" and "from less to more".

RCEP not only reduced the tariff cost of cross-border trade between members, but also implemented the system of independent declaration of origin of approved exporters on a large scale for the first time. AEO senior certification enterprises that have been identified by the customs as approved exporters can independently declare the origin and enjoy tariff concessions according to the requirements of the agreement.

"Although our fishing rods exported to Indonesia can be subject to zero tariff treatment under the China ASEAN Free Trade Agreement and RCEP, after the RCEP takes effect in Indonesia, the company, as an approved exporter of the customs, can independently issue a declaration of origin of RCEP to enjoy benefits." Hao Zhiqiang, the customs manager of the Marketing Department of Shandong Global Fishing Gear Co., Ltd., said that after using the declaration of origin, It is no longer necessary to apply for preferential certificate of origin at the customs or CCPIT. The company will be more flexible in arranging production and shipment, and the efficiency of logistics and customs clearance will be significantly improved.

"After RCEP takes effect in Indonesia, a specific commodity can choose to apply RCEP or the preferential tax rate under the China ASEAN Free Trade Agreement. It is recommended that enterprises do a good job in comparing the tax reduction under the Free Trade Agreement and choose the appropriate free trade agreement to handle the certificate to enjoy benefits." Yao Yong said that Qingdao Customs will also rely on the self-developed "smart collection and management" system to accurately locate international trade enterprises that do not enjoy benefits, It also provides international trade import and export enterprises with benefit sharing scheme design, and aims to promote the preferential policies under RCEP, so as to ensure that enterprises can enjoy the dividends of RCEP and other free trade agreement policies.