RCEP goes into effect for South Korea!Qingdao Customs issued the country’s first RCEP certificate of origin to South Korea

2022-05-22 0 By

On February 1, the Lunar New Year, the Regional Comprehensive Economic Partnership (RCEP) entered into force for the ROK.Just after midnight, a Qingdao customs officer issued the RCEP certificate of origin for a batch of jeans exported by Qingdao Qili Jiarong Garment Co., Ltd. to South Korea through the “single window” for international trade in the Customs Certificate of Origin examination center located in the Shanghai Cooperation Demonstration Zone.This is the first RCEP certificate of origin for South Korea since it came into effect in the country.Jiaozhou customs officers issued the first RCEP certificate of origin to the enterprise.Covering about 30 percent of the world’s population, 30 percent of the global economy and 30 percent of foreign trade, the RCEP is the largest FREE trade agreement China has ever negotiated with the largest number of participants, the most diverse membership structure and the greatest potential for development. It has entered into force for 10 member states, including China, since January 1.Once the RCEP is officially implemented, South Korea will be able to reduce tariffs with countries that are already in force, including China and Japan, within the scope of the RCEP.South Korea is the fourth largest trade market and the largest single country free trade partner of Shandong.”After the RCEP takes effect on the ROK, Chinese companies can enjoy lower tax rates on some garments, starch dextrin, shortening and other products exported to the ROK based on certificates of origin, and import of electric motors and vehicle parts from the ROK can also enjoy greater tax reductions.”Bi Haijun, director of customs Duty department of Qingdao Customs, said that it is estimated that on the basis of several rounds of tax reduction in the Asia-Pacific trade agreement and china-SOUTH Korea Free Trade Agreement, shandong enterprises can achieve another two-way tariff reduction of 24 million yuan on their 1.8 billion yuan imports and exports to South Korea every year.”With this certificate of origin, the tariff rate on goods arriving in South Korea can be reduced from 13 percent to 6.5 percent.”Zhang Shijie, general manager of Qingdao Qili Jiarong Garment Co LTD, said the jeans are worth about 170,000 yuan, and with the RCEP certificate of origin issued by the customs, the tax exemption can exceed 10,000 yuan when the goods go through customs clearance in South Korea.”Our company exports more than 22 million won to Korea every year.According to RCEP’s list of tax cuts, the import tax on jeans in South Korea will be reduced from 13 percent to 6.5 percent.The company can reduce its tariff cost in Korea by more than 1.4 million yuan per year, which is 290,000 yuan less than applying the most favorable tariff rate under the previous ASIA-PACIFIC trade agreement.”Thanks to the RCEP tariff reduction policy, the company’s exports to South Korea are expected to grow by around 10% year-on-year in 2022, Zhang said.The wider the scope of the fta and the more countries in force, the better the free flow of production factors in the region, the rational allocation of resources in the region, and the optimization and consolidation of complementary industrial chain pattern, Bi said.After the RCEP went into effect on the ROK, the RCEP tariff rate on some parts and components is lower than the tariff rate of the CHINA-ROK FTA that has been in effect before. Rok enterprises that need to import key parts and components from the ROK have all said that their tax costs have been reduced and they are more confident in investing in China.The RCEP has not only lowered the cost of tariffs on cross-border trade among member states, but also introduced a series of facilitation measures, including the system of independent declaration of origin for approved exporters and back-to-back certificates of origin, to reduce institutional costs and facilitate the efficient flow of factors of production within the region.Although the frozen noodles exported to South Korea by Qingdao Yashijia Food Co., LTD., located in Jimo, Qingdao, are tariff-free under RCEP and China-South Korea Free Trade Agreement, there is no tariff difference, but the enterprises still feel the convenience brought by the RCEP effect on South Korea.”In January this year, our company was recognized as an approved exporter by Qingdao Customs.”Once the RCEP takes effect in Korea, we will be able to issue the RCEP declaration of origin to Korea and enjoy the corresponding tariff reduction. We will no longer need to apply for the certificate of origin from the Customs or the Council for the Promotion of International Trade, and we will be able to arrange production and shipment more flexibly.”Qingdao is plus food Co., LTD. Business section chief Li Fangzhen introduction.Doosan Construction Machinery (China) Co., Ltd. is a South Korean enterprise invested by Doosan Machinery in Yantai, Shandong Province.The Japanese hydraulic motors, hydraulic valves and other parts needed for the production of the company are mainly purchased from Japan by the South Korean headquarters, and then shipped to China by the South Korean headquarters.”Since the parts were shipped to China after being reassembled in Korea, they could not obtain the RCEP certificate of origin issued by Japan to China, so they could not enjoy the tariff reduction under RCEP.”Wei Wei, the manager of the company, introduced that after THE RCEP takes effect in South Korea, the enterprise can apply the RCEP agreement tax rate granted by China to Japan when importing with the certificate of origin issued back to back by South Korea, according to which the company can reduce the tax cost of 100,000 yuan per year.”In addition to RCEP, China has signed a China-South Korea free Trade agreement with The Republic of Korea and reduced tariffs on each other under the Asia-Pacific Trade Agreement.The customs advised companies to compare rates of free trade agreements and choose the right one to enjoy benefits.”Bi said that Qingdao Customs will also provide enterprises with preferential scheme design and other services to ensure that enterprises can enjoy the maximum benefits of the policy by relying on the RCEP Certificate of Origin review center jointly established by the customs and local governments.(Reporter Li Hongmei)