RCEP Market

How to leverage RCEP to strengthen Vietnam's exports to Indonesia

Solutions for taking advantage of opportunities from RCEP's specific commitments

The market access commitments under RCEP create many opportunities for Vietnamese exporters to the Indonesian market. Therefore, enterprises need to understand the relevant provisions of RCEP in order to maximize the benefits of the Agreement:

Review Indonesia's tariff commitments for Vietnam in the Common Tariff Schedule set out in Annex I of the RCEP Agreement.

However, it should be noted that Indonesia's preferential tariff commitments under the RCEP Schedule represent the minimum level of market opening. In practice, Indonesia may liberalize earlier than the committed schedule by reducing or eliminating tariffs ahead of time. Therefore, to determine the exact preferential tariff rate that Indonesia applies to each Vietnamese product, enterprises should check the annual RCEP preferential tariff schedule applied by Indonesia to Vietnam. Tariffs may be consulted on the Indonesia National Trade Repository at: https://www.insw.go.id/intr

Study the rules of origin and origin certification procedures in order to qualify for RCEP tariff preferences under Chapter 3 - Rules of Origin of the Agreement. In addition, Vietnam has incorporated the RCEP rules of origin into domestic law through Circular No. 05/2022/TT-BCT dated February 18, 2022, as amended and supplemented by Circular No. 32/2022/TT-BCT, which provides the rules of origin for goods under RCEP.

Enterprises should carefully study this information and related guiding documents in order to fully comply with the rules of origin and certification procedures required to enjoy RCEP tariff preferences when exporting to Indonesia.

Examine other relevant issues such as Customs Procedures and Trade Facilitation (Chapter 4), Sanitary and Phytosanitary Measures (Chapter 5), Standards, Technical Regulations and Conformity Assessment Procedures (Chapter 6), and Trade Remedies (Chapter 7) in order to both ensure compliance with RCEP requirements and make use of their rights while protecting their legitimate interests.

Technical and Market-Related Solutions

To export to the Indonesian market, Vietnamese products must deal with many issues that RCEP does not substantially address or alter, especially:

- Indonesia's import requirements and regulations;

- The needs and preferences of Indonesian consumers;

- Consumption trends and distribution channels in Indonesia.

Therefore, in order to access the Indonesian market, Vietnamese enterprises should pay attention to the following:

- Study in detail, update regularly, and ensure full compliance with Indonesia's import regulations and procedures.

However, most of Indonesia's legal regulations, procedures, and import requirements are issued in Bahasa Indonesia. Therefore, enterprises should have local partners to provide support or make use of information from the Vietnam Trade Office in order to minimize risks arising from language barriers.

  • Gain an in-depth understanding of Indonesian consumers' preferences and consumption characteristics, and then improve product design and quality accordingly so that products better meet the needs and consumption habits of Indonesian consumers.
  • Develop flexible pricing strategies and diversify products in order to meet the consumption needs of each region and each social stratum.
  • Study how to build and promote Vietnamese brands in ways that are consistent with the culture, beliefs, and religion of consumers in this market.
  • Learn about the mechanisms and methods for accessing distribution channels and distributors in Indonesia, especially by taking advantage of e-commerce channels and social media, which are increasingly popular in Indonesia.

Solutions for Improving Competitiveness

Enhancing competitiveness is a sustainable solution for Vietnamese products to grow in both the domestic and export markets. To achieve this, enterprises should pay particular attention to the following measures:

  • Invest in technical improvement and increase the technological content of production and processing activities, through joint ventures and partnerships with researchers and domestic and foreign enterprises, and through upgrading or acquiring modern production processes and technologies.
  • Invest in human resources by developing structured labor training plans and strengthening the capacity of key managers, technology engineers, and market research specialists.
  • Conduct research to improve product quality, design, and other features so that products better match the needs and preferences of Indonesian consumers.
  • Focus on brand building and promoting products to Indonesian importers and consumers through various channels, such as trade fairs, exhibitions, and social media advertising.
  • Seeking Information and Support from the Government, Trade Promotion Agencies, and Industry Associations

To increase the benefits derived from RCEP, the Government, trade promotion agencies, and industry associations are likely to carry out more activities in the coming period to support enterprises in expanding trade with RCEP member countries, including Indonesia. Vietnamese exporters can take advantage of these support activities to obtain information and advice on RCEP commitments, receive assistance in connecting with Indonesian importers, and promote Vietnamese products to consumers in that market.

Source: Center for WTO and International Trade - VCCI

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