RCEP Boosts Shandong Exports to Indonesia: Zero Tariffs

Starting from January 2,2023,the Regional Comprehensive Economic Partnership (RCEP) will come into effect for Indonesia.Recently,at the RCEP Shandong Enterprise Service Center,customs officers from Qingdao Customs were working with the general manager of an aquatic products company to design preferential benefit plans for the company following RCEP’s implementation in Indonesia.

The aquatic products company is engaged in the processing and export of aquatic products.The company imports frozen salmon,processes and packages it,then exports to overseas markets in Southeast Asia.For the Indonesian market alone,the company exports over 20 million yuan worth of frozen salmon segments annually.

The Rules of Origin under the China-ASEAN Free Trade Agreement stipulate that frozen salmon segments are subject to the "chapter change" origin criterion.Since the frozen salmon segments and the raw material used for processing,frozen salmon,fall under the same customs tariff chapter,they fail to meet the "chapter change" origin criterion.As a result,the company is not eligible for tariff concessions under the China-ASEAN Free Trade Agreement and is still required to pay a 10% import duty when clearing customs in Indonesia.

"After receiving specialized guidance from customs,we learned that the origin criterion for frozen salmon fillets under RCEP is a regional value content of no less than 40%,which is significantly lower than the ’chapter change’ threshold under the China-ASEAN Free Trade Agreement," said the company’s general manager."Starting from January 2 next year,our frozen salmon fillets exported to Indonesia can benefit from RCEP."Books enjoy zero-tariff treatment." For the aquatic product processing industry,which operates on relatively low profit margins,being able to benefit from such a significant tariff reduction presents a new opportunity and a major advantage,which will help companies achieve substantial growth in export volume."

The RCEP is currently the world’s largest free trade agreement in terms of population coverage,economic and trade scale,and development potential.Benefiting from inherent geographical advantages and industrial structural strengths,Shandong has maintained close economic and trade cooperation with RCEP member countries.According to statistics from Qingdao Customs,in the first 11 months of 2022,Shandong’s trade with the other 14 RCEP member countriesAfter RCEP takes effect in Indonesia,Shandong will gain new opportunities in aligning with high-standard international trade rules and advancing institutional openness.

In the first 11 months of this year,Shandong’s export value to Indonesia reached 39.01 billion yuan,a year-on-year increase of 29.3%.Even though the China-ASEAN Free Trade Agreement has been in effect for many years,the entry into force of RCEP for Indonesia still allows some companies to benefit from "starting from scratch" and "growing from little to more."

The RCEP not only reduces the tariff costs of cross-border trade among member states but also,for the first time on a large scale,implements the self-certification of origin system by approved exporters.AEO (Authorized Economic Operator) enterprises that are recognized by customs as approved exporters can self-certify the origin of goods in accordance with the agreement’s requirements and enjoy tariff concessions.

"Although the fishing rods we export to Indonesia are eligible for zero-tariff treatment under both the China-ASEAN Free Trade Agreement and RCEP,once RCEP takes effect in Indonesia,our company,as an approved exporter by customs,will be able to independently issue RCEP origin declarations to enjoy the benefits," said the marketing manager of a Shandong fishing gear company."By using self-declarations,we no longer need to apply for preferential origin certificates from customs or the trade promotion council,making our production and shipment arrangements more flexible.This will also significantly improve logistics and customs clearance efficiency."