Tariffs reductions will be phased in over a 15 or 20-year period. The countries that will fully implement their tariff reductions within 15 years are New Zealand, Australia, Singapore, Brunei, Philippines, Vietnam and Japan.
The remaining member countries will implement tariff reductions over a 20-year period. Not all tariffs will be removed. Tariffs will be reduced to 10% or less by most countries, but six countries will retain tariffs on 35% of products.
These countries are: Cambodia, Laos, Myanmar, Thailand, Korea, and Japan. Most of the tariff benefits to New Zealand exporters will occur quite quickly once the agreement is ratified. New Zealand has existing FTAs with all the RCEP countries.
These have already eliminated tariffs on most New Zealand exports. This means RCEP does not deliver significant new market access for goods exports as a result of tariff cuts.
However, New Zealand exporters do encounter significant tariffs on product entering Indonesia.
The RCEP will eliminate tariff barriers for the following New Zealand exports to Indonesia:
- on beef exports (bone in cuts), and all sheep meat exports;
- preserved and prepared meat exports;
- table salt;
- fish and fish products;
- liquid milk, grated or powdered cheese, honey, avocados, tomatoes, persimmons, and many manufactured goods.
For exports to Indonesia the tariff reduction on fresh lamb and beef products will happen in the first year after the RCEP is ratified, whereas the tariff on frozen carcasses and bone-in products will be phased in over 15 years.
Tariffs on cheese and butter will be eliminated in the first year of the agreement, while tariffs on liquid milk and milk powder will be phased out over 10 years.
Benefits of the RCEP are also derived from improved market access, reduced processing times for clearing customs and a disputes process. In 2019 there were over 1700 non-trade measures notified to the World Trade Organisation (‘Regional Comprehensive Economic Partnership National Interest Analysis’ MFAT).
Non-trade measures are anything other than tariffs that can potentially impact trade, such as technical barriers to trade, sanitary and phytosanitary measures, certification or testing requirements, quotas, import or export licenses, taxes surcharges etc.
Delays in getting product across borders is a common non-tariff barrier used. The RCEP states that customs procedures must be predictable, consistent and transparent.
There should also be processes in place to resolve any issues. The RCEP provides increased protection for and recognition of intellectual property (IP) rights.
Services exports will also benefit from the agreement, as some of the commitments regarding services go beyond what is included in the ASEANAustralia-New Zealand Free Trade Agreement (AANZFTA).
This will benefit sectors such as professional, educational and environmental services, computer related services, air transport, research and development, and distribution services. Less comprehensive
The RCEP is considered to be less comprehensive than CPTPP. This is not surprising considering the large number of countries involved which included very rich and very poor countries.
RCEP mainly focuses on reducing tariffs and improving market access. It focuses less on issues like labour rights and environmental protection. As it stands it has taken nearly a decade to negotiate the RCEP agreement.