At 22:00 on the evening of September 16, the Ministry of Commerce announced that China has applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
What is CPTPP?
CPTPP is a free trade agreement (FTA) derived from the remaining 11 signatories of the Trans-Pacific Partnership (TPP). The CPTPP contains most of the original TPP agreement but without U.S. participation and suspended some provisions.
In addition to reducing tariffs by 95%, the CPTPP has also established high standards of non-tariff measures, including sanitary and phytosanitary measures, and a dispute settlement mechanism. The agreement suspended 20 provisions of the original TPP, 11 of which were related to intellectual property rights and were promoted by the United States.
On December 30, 2018, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) officially came into effect. This is an improved version of the TPP after the United States withdrew from the TPP. Many people believe that after Trump tore up the TPP agreement, without the United States as the leader, the TPP will come to an end. However, the remaining 11 countries continued to advance and eventually formed the world’s third largest free trade area.
These 11 countries are: Australia/New Zealand/Canada/Japan/Mexico/Singapore/Vietnam/Brunei/Chile/Malaysia/Peru.
In fact, tariff reduction and exemption are only one aspect of the CPTPP content. According to the media, its more strategic intention is to remove barriers to investment, services and data in the Pacific Rim region, bringing opportunities for retail, banking and e-commerce.
What signal does China send by actively joining the CPTPP?
Faced with the great changes we are currently experiencing that have not been seen in a century, and new changes in the international and domestic situation and environment, our country has proposed to build a domestic macrocycle as the main body and a domestic and international dual cycle. A new development pattern of mutual promotion. Not long after China joined the RCEP, it applied to join the CPTPP. This means that the dual cycle is not a reversal from openness to closure, but relies on the scale effect and multiplier effect of the big country’s economy to remain unswervingly open to the outside world and form a more benign domestic economy. International double circulation.
From a framework perspective, the CPTPP is still the highest level economic and trade liberalization mechanism to date, reflecting a “comprehensive, broad and deep system” of open rules: First, “trade in services and trade in goods” “Double opening simultaneously. Covering finance, digital trade, telecommunications, modern logistics, culture and education, medical care, movement of natural persons, etc. There are not only market, trade and other issues, but also investment content. The second is the deep opening of “border opening and intra-border opening”. Reducing market access aspects such as tariffs and non-tariff barriers, i.e. “border opening”. At the same time, it moves from “border” to “within the border”, involving technical standards, environmental protection, intellectual property rights, labor, safety and health, competitive neutrality, state-owned enterprises, dispute settlement mechanisms, etc.
China is actively considering joining the CPTPP, which means it will take action in the following aspects: First, in terms of commodity trade, it will further reduce import tariffs and negotiate as much as possible It emphasized that China implements regional cumulative origin standards, while also doing a good job in trade facilitation and investment facilitation, optimizing the business environment, and reducing the cost of import customs clearance. The second is to comprehensively promote the negative list model in services trade to promote the opening up of China’s services trade. Third, in terms of investment, we should learn from the pre-establishment national treatment plus negative list model adopted by China in the free trade pilot zones and promote it nationwide in an orderly manner. The fourth is to effectively protect intellectual property rights, encourage enterprise innovation, and narrow the gap with developed countries in core key areas, which will help China further join the CPTPP.
What opportunities do textile companies have?
It helps to deepen regional textile and apparel industry chain and supply chain cooperation
Through CPTPP, goods, services, and Market access in investment and other fields will be further relaxed, and customs procedures and technical standards will be gradually unified. By adopting regionally accumulated rules of origin, the free flow of economic factors within the region will be promoted, production division of labor cooperation among members will be strengthened, and the expansion and upgrading of the regional consumer market will be promoted. , to promote the further development of industrial chains, supply chains and value chains in the region.
Origin accumulation rules are more conducive to enterprises benefiting
Regional origin accumulation in a wide range system will make it easier for companies to obtain preferential tariffs. At the same time, it will have an impact on the company’s procurement of raw materials and parts, industrial chain layout, and foreign investment decisions. After the CPTPP comes into effect in the future, when companies import and export products that are included in the tariff concession schedule and meet the origin standards, they should actively apply for and issue a certificate of origin in order to enjoy tariff preferences and customs clearance convenience in a timely manner and enhance the competitiveness of their products in the international market. . </p
