Opportunities from RCEP for exporting Vietnamese goods to the Japanese market
- Opportunities from harmonized rules of origin, increasing the choice of preferential tariffs when exporting to Japan
Compared with the existing FTAs between Vietnam and Japan (VJEPA, AJCEP or CPTPP), with a large number of members, RCEP brings advantages in harmonizing rules of origin - a condition to increase the ability to enjoy tariff preferences for goods exported to Japan. Specifically, RCEP allows the accumulation of raw materials originating within the bloc from all 15 RCEP member countries, thereby making it easier for businesses' goods to meet the rules of origin to take advantage of tariff preferences under the Agreement.
In fact, most RCEP member countries (China, Korea, ASEAN countries) are the main sources of raw materials for Vietnam, so the ability of Vietnamese export goods to meet RCEP rules of origin is higher, the rate of taking advantage of tariff preferences in RCEP when exporting to Japan is also expected to be better than the existing FTAs between Vietnam and this country.
RCEP does not exclude but is effective in parallel with VJEPA, AJCEP and CPTPP, which helps Vietnamese enterprises have more choices in preferential tariffs/rules of origin in a way that is beneficial to the enterprise. For example, if preferential tariffs under VJEPA are lower than RCEP but do not meet the rules of origin under VJEPA, 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 trade facilitation, 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 Japan, thereby helping Vietnamese goods access the Japanese market more easily.
- Opportunities from reducing costs and improving competitiveness
Thanks to the advantage of harmonizing rules of origin within the bloc, Vietnam can import raw materials and accessories - goods 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 Japanese 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 sector, 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, modern trade methods, support businesses (competition, e-commerce, small and medium enterprises, etc.) create conditions for manufacturing businesses, 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 increasingly favorable, reduce costs and time for businesses, thereby making production and import-export activities more favorable and easier.
In addition, to a certain extent, Vietnamese businesses have an advantage over businesses 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 Japanese 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
