The Regional Comprehensive Economic Partnership (RCEP) has one set of rules of origin (ROO) applicable to 15 countries and simplified administrative procedures which can potentially offer benefits to the garments and textiles industry and other businesses, according to an expert.
“Tariff liberalization and unified and streamlined rules of origin lead to cheaper raw material and more easy to meet rules of origin and wider choices on sourcing country of raw material,” Chy Sotharith, chief of Non-Tariff Measures (NTMs) and Export-Import Policy Bureau at Department of Export Import of Ministry of Commerce, Cambodia, said in a webinar.
Sotharith said back-to-back proof of origin facilitates wholesale traders and third-party logistics service providers operating regional distribution center in the RCEP country.
It allows the issuing authority of the intermediate country or approved exporter or exporter to issue or prepare the back-to-back proof of origin, he said.
With wider and single cumulation rule among all RCEP countries, Sotharith said it is easier for business to meet regional value content (RVC) criterion, and promote production capacity especially for countries who rely on imported raw materials like fabric.
“Unlike previous practices that businesses need to check and apply on different cumulation rules in different FTAs (free trade agreements) for raw materials, with RCEP, the cumulation rule is one for all 15 parties,” he added.
RCEP is an FTA initiated by the Association of Southeast Asian Nations (ASEAN) with its free trade partners –China, Japan, South Korea,
Australia, and New Zealand. Under the RCEP, the Philippines has secured and preserved the majority of the tariff commitments vis-a-vis the ASEAN+1 FTAs, while at the same time bringing down import tariffs for key Philippine exports.
Sotharith said Article 3.4 of RCEP on cumulative rules allow to cumulate originating materials or components from 15 RCEP countries for the production process.
“(Under the) RCEP PE (produced entirely) criterion, we have to promote trade among RCEP countries and regional economic integration and the integration of supply chain like China, Japan, Korea, they can engage trade among others and as well as they are textile suppliers to ASEAN,” he added.
Sotharith said a good shall be treated as originating one if it is PE produced in a party exclusively from originating materials from one or more of the parties, wholly obtained or produced in a party as provided in Article 3.3 (goods wholly obtained or produced), and undergone substantial transformation produced in a party using non-originating materials provided the good satisfies the applicable requirements set out in Annex 3A (product-specific rules).