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RCEP will bring new opportunities to China's textile and garment export!

The fourth regional comprehensive economic partnership (RCEP) leaders' meeting was held by video on November 15. At the meeting, under the joint witness of the leaders of 15 countries, the trade ministers of all countries signed the RCEP agreement. As a free trade area with the largest participation population, the most diverse membership structure and the largest development potential in the world, this is not only a highly symbolic achievement of regional cooperation in East Asia, but also a victory of multilateralism and free trade. It will surely add new momentum to the development and prosperity of the region and contribute new strength to the recovery growth of the world economy.

It is reported that RCEP negotiations were officially launched in November 2012, involving more than ten fields, including small and medium-sized enterprises, investment, economic and technological cooperation, and trade in goods and services. After three leaders' meetings, 19 ministerial meetings and 28 rounds of formal negotiations, significant progress has been made in the RCEP negotiations in 2019. After eight years of negotiation, RCEP has been signed, so that people can see the light and hope in the haze. India has not joined the agreement for the time being because "there are important issues that have not yet been resolved".

More than 90% of the commodities may be included in the zero tariff range

In 2019, the total population of 15 RCEP member countries will reach 2.27 billion, GDP will reach 26 trillion US dollars, and total exports will reach 5.2 trillion US dollars, accounting for about 30% of the global total. The establishment of RCEP free trade zone means that about one third of the global economy will form an integrated market. RCEP includes the main countries in East Asia and will inject strong impetus into regional and global economic growth.

It is understood that the regional comprehensive economic partnership agreement was initiated by 10 ASEAN countries (Indonesia, Malaysia, Philippines, Thailand, Singapore, Brunei, Cambodia, Laos, Myanmar and Vietnam) in 2012, and 16 parties including China, Japan, South Korea, India, Australia and New Zealand were invited to jointly formulate the agreement. Through reducing tariff and non-tariff barriers, 16 countries were established It is a free trade agreement among which markets are opened to each other, regional economic integration and market unification are implemented.

The RCEP negotiation is to further expand the scope to "10 + 5" on the basis of the previous "10 + 3" cooperation. Before that, China has established a free trade area with ten ASEAN countries, and the zero tariff of China ASEAN Free Trade Area has covered more than 90% of the tax items of both sides.

The data shows that in the first three quarters of this year, the trade volume between China and ASEAN reached 481.81 billion US dollars, an increase of 5% over the same period of last year. ASEAN has historically become China's largest trading partner, and China's investment in ASEAN has increased by 76.6% year on year.

RCEP members are important economic and trade partners of China. According to the Ministry of Commerce, from January to September 2020, China's total trade with other RCEP members will reach US $1055 billion, accounting for about one third of China's total foreign trade.

In addition, through the connection of this agreement, the economic and trade relations between China and Japan, which had no bilateral trade mechanism before, will further develop. The current free trade rate with China's trade partners will increase from 27% to 35%.

Wang Shouwen, Vice Minister of Commerce and deputy representative of international trade negotiations, once pointed out that the formation of a unified Free Trade Zone in the region is conducive to the formation of supply chain and value chain in the region according to its comparative advantages. It will be of great benefit to the flow of goods, technology, services and capital in the region, including the cross-border flow of personnel, and form the "trade creation" effect Should.

After the signing of RCEP, if more than 90% of products are gradually free of tariff, it will greatly promote the economic vitality of more than ten members including China.

Impact on textile and garment industry

The signing of RCEP will reduce the cost of China's import of iron ore, rubber, PX and other commodities, which will help to improve the competitiveness of relevant industrial chains in the long run.

At the same time, the conclusion of RCEP will help to expand China's export market space, meet the needs of domestic import consumption, strengthen the supply chain of regional industrial chain, help stabilize foreign trade and foreign investment, and provide effective support for the formation of a new development pattern with domestic big cycle as the main body and domestic and international dual circulation promoting each other.

Take clothing production as an example, foreign clothing imports have to pay a certain tariff, and the tariff cost is ultimately apportioned to consumers. After the signing of the agreement, the situation will change. Wool produced in Australia can enter China duty-free. After being woven into cloth in China, it may be exported to Vietnam. Vietnam can use this cloth to weave clothes and then export them to South Korea, Japan, China and other countries. All of these may be duty-free. Therefore, it will promote the development of the local textile and clothing industry, solve employment problems, and is also very beneficial to export.

Of course, it also benefits from other member states. For example, Vietnam's clothing exports to China will have to pay tariffs. If Vietnam joins the FTA, the regional value chain will play a role. In fact, all enterprises in the region can participate in the value accumulation of the origin, which is of great benefit to the promotion of mutual trade and investment in the region.

Of course, RCEP is not only good for China's textile and garment exports, but also good for Vietnam and other ASEAN countries. These countries will increase their share in the RCEP regional internal market by virtue of their resource and price advantages. If China's textile and garment industry has not yet shifted to the direction of high-end and high added value, the effect will be more harmful than beneficial. In the future, RCEP will accelerate the transformation and upgrading of China's textile and garment industry, which will bring opportunities and challenges.

Therefore, our polyester yarn enterprises must also move forward to the high end.