What is RCEP

The Regional Comprehensive Economic Partnership (RCEP) is a proposed agreement between the member states of the Association of Southeast Asian Nations (ASEAN) and its free trade agreement (FTA) partners. Member states of ASEAN and their FTA partners include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam, China, Japan, India, South Korea, Australia and New Zealand.

RCEP aims to create an integrated market with 16 countries, making it easier for products and services of each of these countries to be available across the region. The negotiations are focused on the following: trade in goods and services, investment, intellectual property, dispute settlement, e-commerce, small and medium enterprises, and economic cooperation.

The RCEP was discussed for eight years, starting in 2012, and the ASEAN countries, including Myanmar and China, Japan, South Korea, Australia and New Zealand, signed the agreement on 15 November, 2020. The RCEP agreement is the world’s most significant trade agreement covering 30 per cent of the world’s population, 30 per cent of global gross domestic product (GDP), 29 per cent of world trade and 30 per cent of foreign direct investment.

What Myanmar export items will be benefited

Among partner countries of ASEAN that signed in RCEP, China is the first one that recognized the letter expressing agreement with Myanmar comes into force starting on 1 May 2022. Myanmar can get the priorities in customs of China and other chances. The RCEP agreement carries multi-sectoral things in line with the trend. Myanmar entrepreneurs have previously used the ASEAN-China Free Trade Area- ACFTA and can enjoy the chances under the RCEP.

In RCEP, it pre-determines the products to be exported regarding the customs procedures that are not included in ACFTA, customs value and products by Myanmar and customs clearance within 48 hours from the time of products arrive. Therefore, the products exported to China can be taken out faster than before, according to RCEP. Moreover, it can protect the severe risks for the local enterprises such as the high import volumes, selling with discount, export with the help of other countries.

Myanmar exporters will be exempted from customs duty for 5,969 products from now on. They are 368 animal products, 389 agricultural products, 10 edible oil products, 163 foodstuffs, 181 mineral products, 1,127 chemical products and raw materials, 125 plastic materials, 67 leather products, 234 forest products, 146 cement, mirror and its related materials, 62 pearl and precious gems, 554 units of metal and metal-based materials, 1,058 machines, 124 vehicles, planes, ships and transportation parts, 240 pharmaceutical products, movie materials and instruments and so on. The remaining goods can also be enjoyed exemption of customs duty yearly. Therefore, Myanmar can enjoy duty-free and other reliefs for the exports to China, and it can earn export incomes, create job opportunities and increase the taxes.

Other incentives for export promotion

Regarding the services, Myanmar eased 52 sectors under ACFTA and 80 sectors in the economy, communication, construction, distribution, education, environment, finance, health, tourism, transportation and other services under the RCEP. China eased 88 sectors under ACFTA and 95 sectors under RCEP.

By easing service sectors, it can improve economic capacity, enhance the competitiveness of exports and products of developing countries in international markets, offer varieties of choices, foreign direct investment inflows into Myanmar, grab chances to create job opportunities and technological aid and extend service sectors and other relevant parts.

Myanmar and China can launch technological cooperation in the fields expressed in RCEP as electronic material trade, MSMEs, procurement of government, supports, and capacity building programmes for IP, which are not included in ACFTA.

Moreover, Myanmar is the least developed country, so it doesn’t need to follow some commitments in the agreement, and can enjoy a one-sided chance for three to five years. During that period, Myanmar can draft a legal framework, develop the human resources and promote the capabilities of organizations.

Thus, Myanmar exporters should study RCEP and try to enjoy the benefits with the support of related departments and associations.