On the 21st, unloading work is in progress at Sinseondae Pier in Busan Port. [사진=연합뉴스]
The Regional Comprehensive Economic Partnership (RCEP), the world’s largest free trade agreement (FTA), went into effect in Korea from the 1st. This is in accordance with the regulations that set the agreement to enter into force 60 days after the government deposits the instrument of ratification on December 3, last year. Ten countries, including China and Japan, completed the ratification procedure ahead of Korea, and it took effect on January 1 of this year, a month earlier.
The RCEP agreement was reached after about eight years of negotiations. With the entry into force of the RCEP, Korea’s ‘trade territory’ is expected to increase. In addition to the main export items such as automobiles, steel, and parts, exports are expected to further expand in service areas such as online games, animations, movies, and music. In particular, RCEP is a mega-FTA that accounts for one-third in terms of population, trade size, and gross domestic product (GDP) of countries around the world.
10 ASEAN countries, including Indonesia, Thailand, and Vietnam, and 5 non-ASEAN countries, including Korea, China, Japan, Australia, and New Zealand, are participating in the RCEP. Among them, Japan is a country that has not entered into an individual FTA with Korea, but the effect of indirect FTA conclusions through RCEP has also occurred.
About half of Korea’s total export volume is exported to RCEP member countries. The RCEP agreement consists of 20 chapters covering goods, services, investment, and intellectual property rights. The 10 ASEAN countries have further opened up their product markets to Korea through the RCEP. Thanks to the recent rise in the Hallyu brand value, exports of related products are also expected to increase.
In goods trade, tariff abolition rates ranged from 91.9 to 94.5% by country between Korea and ASEAN, 83% between Korea and Japan, and 91% between Korea and China, Australia and New Zealand. In service trade, the treatment of nationals and most-favored countries and the opening of ASEAN’s cultural contents and distribution sectors are included.
In particular, it is expected that the burden on Korean companies to use FTAs will be reduced by introducing a single standard of origin that unifies the standards for recognition of origin among the 15 countries, expanding the scope of cumulative origin, and diversifying methods of certification of origin, such as voluntary issuance of certified exporters.
As the RCEP goes into effect, Korea’s existing regional product exports are expected to gain more momentum. Korean companies will benefit from plastics and synthetic resins in Japan, medical and imaging equipment parts in China, automobile parts and steel in Vietnam, and cultural contents and distribution in Indonesia, Thailand, and the Philippines. predicted.
In the case of China, which has already signed an FTA with Korea, items such as medical devices, imaging device parts, and semiconductor manufacturing parts are expected to benefit. In addition, Vietnam has decided to eliminate tariffs on auto parts, machinery and some steel items.
For the smooth implementation of the RCEP, the government has completed preparations such as amending relevant laws. In order to increase the utilization of FTAs by Korean companies, the government has built a database where you can easily find information on tariff rates and country of origin.
In the future, the Ministry of Industry, along with related ministries and related organizations such as KOTRA, the Korea International Trade Association, and the Korea Chamber of Commerce and Industry, will continue to check the difficulties related to the use of RCEP by Korean companies, and plan to provide information and consultations using the tour briefing session and the 1380 call center. In addition, the Ministry of Trade, Industry and Energy plans to work to enhance the effectiveness of RCEP by discovering and conducting cooperative projects jointly with regional member states to expand the use of RCEP.
- reporter information
- Park Seong-jun
- kinzi312@ajunews.com
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