Shenzhen enterprises enjoyed 5.98 million yuan (US$932,321) in tariff reduction for imported Japanese goods worth 144 million yuan in the first quarter of this year under the Regional Comprehensive Economic Partnership (RCEP) agreement since it took effect Jan. 1, data from Shenzhen Customs showed.
Meanwhile, between January and March, Shenzhen Customs issued 2,937 certificates of origin under the RCEP agreement and helped importers in Japan enjoy 32.9 million yuan in tariff reductions for imported products worth 658 million yuan.
Japan is the only member country that has not signed a free trade agreement with China. Since Japan terminated inclusive preferential tariff treatment for China in April 2019, tariffs for Chinese products exported to Japan went up by about 3% on average. Tariff on agricultural produce and garments even rose by 10%.
After the RCEP agreement was implemented and the second round of tariff reductions began in April this year, more exporters have benefited from the tariff reductions and many have been enthusiastic about applying for a certificate of origin, according to Shenzhen Customs.
On Tuesday, Shenzhen Hayco Industrial Co. Ltd. exported a batch of plastic cups to Japan. Under RCEP tariff arrangements, the Japanese importer enjoyed tariff cuts from 3.9% to 3.2% by applying for the certificate of origin issued by Shenzhen Customs. The tariff cut helped boost the Shenzhen company’s product competitiveness in Japan.
Under the RCEP component accumulation rule for origin, goods obtained or processed in one member country can be considered as originating in another country. The rule will help in utilizing preferential tax rates.
For example, if Shenzhen-based mobile phone maker Transsion has glass for its display screens imported from Japan, spare parts made in China and mobile phones exported to Thailand; then under the rule, the glass from Japan could be treated as originating from China. Importers could easily enjoy preferential tariff treatment.
Under the RCEP tariff agreement, the 13 types of traditional Chinese medicine products made by Shenzhen Tsumura Medicine Co. Ltd. and exported to its headquarters in Japan enjoyed tariff cuts ranging from 0.5% to 6%. By Monday, the company had saved 150,000 yuan from the tariffs.
Between January and March, Shenzhen Customs issued 3,074 certificates of origin for 680 million yuan worth of products exported to RCEP member countries and helped importers enjoy 34 million yuan in tariff reductions.
A total of 15 Asia-Pacific countries signed the RCEP agreement in 2020, including 10 members of the Association of Southeast Asian Nations and five of their largest trading partners: China, Japan, South Korea, Australia, and New Zealand.