Opportunities from RCEP for exporting Vietnamese goods to New Zealand market
- Opportunities from harmonized rules of origin, increasing the choice of preferential tariffs when exporting to New Zealand
With a large number of members, RCEP brings advantages in harmonizing rules of origin - a condition to increase the ability to enjoy preferential tariffs for goods exported to New Zealand. Specifically, RCEP allows the accumulation of materials originating within the bloc from all 15 RCEP member countries, so that enterprises' goods can meet the rules of origin to take advantage of preferential tariffs under the Agreement more easily than AANZFTA (the rules of origin only accumulate AANZFTA members, namely ASEAN, Australia and New Zealand) or CPTPP (with the rules of origin of 11 CPTPP members, including 4 ASEAN countries, 4 countries of the Americas, Japan, the UK, Australia and New Zealand).
In fact, most RCEP member countries (China, Korea, Japan, ASEAN countries) are the main sources of raw materials for Vietnam's export production, so the possibility of Vietnamese export goods meeting RCEP rules of origin is higher, the rate of utilizing tariff preferences in RCEP when exporting to New Zealand is also expected to be better than AANZFTA or CPTPP.
RCEP does not exclude but is effective in parallel with AANZFTA and CPTPP, which helps Vietnamese enterprises have more choices of preferential tariffs/rules of origin in a way that is beneficial to the enterprise. For example, preferential tariffs under AANZFTA are lower than RCEP but do not meet the rules of origin under AANZFTA, enterprises can choose the rules of origin and enjoy tariff preferences under the RCEP Agreement.
- Opportunities from reducing non-tariff barriers
The RCEP Agreement has many commitments on simplifying customs procedures and facilitating trade, facilitating the recognition of equivalence of SPS measures, encouraging the recognition of TBT conformity assessment results, etc. These commitments help limit unnecessary trade barriers between Vietnam and New Zealand, thereby helping Vietnamese goods access the New Zealand market more easily.
- Opportunities from reducing costs and improving competitiveness
Thanks to the advantage of harmonizing intra-bloc rules of origin, Vietnam can import raw materials and accessories - products that Vietnam does not have a competitive advantage in, from RCEP member countries at better prices, thereby making the finished products more competitive in terms of price in the New Zealand market.
In addition, RCEP also includes many commitments in the service and institutional sectors that can help manufacturing and exporting enterprises save production costs and improve competitiveness, such as:
- Commitments to open the market for production services such as finance, telecommunications, logistics, etc. will help improve competition in this field, thereby creating conditions for manufacturing enterprises to access these services with better quality and more reasonable costs, thereby reducing service costs in product prices.
- Commitments to promote a competitive environment, support businesses (competition, e-commerce, small and medium enterprises, etc.) create conditions for manufacturing enterprises, especially small and micro enterprises, to improve their competitiveness and better access to customers..
In addition, it can be seen that throughout RCEP are commitments towards liberalization, non-discrimination, transparency and facilitation of trade and investment between member countries. These commitments help make Vietnam's business environment and legal environment more and more favorable, cutting costs and time for businesses, thereby making production and import-export activities more favorable and easier.
In addition, to a certain extent, Vietnamese enterprises have an advantage over enterprises in many other RCEP countries in that they do not have to pay additional costs to comply with high-standard commitments under RCEP. This stems from the fact that Vietnam has met stricter rules when implementing other new-generation free trade agreements with standards equal to or even higher than RCEP, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) or the Vietnam-EU Free Trade Agreement (EVFTA), while other RCEP countries (some ASEAN member countries) will face additional pressure to increase costs to comply with higher standards when doing business with the New Zealand market. Therefore, Vietnamese goods are expected to have a certain competitive advantage over some RCEP member countries in this aspect.
Source: Center for WTO and International Trade
