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China’s 19 Regional Trade Agreements (RTAs)

By the end of February 2021, China had signed 19 Regional Trade Agreements (RTAs) with 26 countries and territories, the World Trade Organization (WTO) reported.

The authorities say that China has committed to creating a global network of RTAs to further strengthen the economic and trade ties that bind its trading partners, and boost trade and investment in both directions; These efforts have accelerated the pace of opening of the relevant sectors and have improved the competitiveness of companies in these sectors.

China sees its network of Regional Trade Agreements as a means of complementing the multilateral trading system and continuing to promote free trade rules.

On November 12, 2018, the China-Singapore Free Trade Agreement Update Protocol was signed, which entered into force on October 16, 2019.

The Protocol revises the original Agreement in six areas (namely, rules of origin, customs procedures and trade facilitation, trade remedies, trade in services, investment, and economic cooperation); and the areas of electronic commerce, competition policy, and the environment are added.

Regional Trade Agreements

On April 28, 2019, the China-Pakistan Free Trade Agreement Update Protocol was signed, which entered into force on December 1, 2019.

It introduced revisions to the original Agreement in various areas, including: market access and the Schedule of Tariff Concessions for Trade in Goods, Rules of Origin, Trade Remedies, and Investment; a chapter on customs cooperation was also added.

The arrangement on tariff reductions was put into effect on January 1, 2020. Its purpose is to raise the proportion of duty-free lines to 75% (from the initial 35%).

Both sides immediately eliminated tariffs on 45% of the lines, and China pledged to phase out the tariffs on an additional 15% of the lines over five years and another 15% over 10 years.

In addition, the tariff rates applicable to other products, which represent 5% of China’s tariff lines, were cut by 20%.

Mauricio

The Free Trade Agreement between China and Mauritius was signed on October 17, 2019 and entered into force on January 1, 2021. It covers issues such as trade in goods, trade in services, investment, and economic cooperation.

China and Mauritius pledged to apply a zero rate over time to 96.3% and 94.2% of traded items, respectively.

As for China, the duties applicable to 87.6% of these tariff lines would be eliminated immediately upon entry into force of the Agreement, while the rest of the tariffs will be eliminated over a period of seven years.

The Agreement also covers more than 40 service sectors, including financial, telecommunications, ICT, professional, construction, and health services. The two parties have committed to liberalize more than 100 subsectors.

Cambodia

The China-Cambodia Free Trade Agreement was signed on October 12, 2020. It has not yet entered into force.

The Agreement contains provisions on trade in goods, rules of origin, customs procedures and trade facilitation, sanitary and phytosanitary measures, trade in services, investment cooperation, cooperation under the BRI framework. , electronic commerce, economic and technical cooperation, and transparency, as well as administrative and institutional provisions and on dispute settlement.

It has annexes with Schedules of specific commitments on trade in services, according to which the two parties agree to liberalize some of their services sectors.

China and Cambodia pledged to eliminate tariffs on 97.53% and 90% of tariff lines, respectively.

In particular, at the time of entry into force of the Agreement, the applicable duties will be eliminated with respect to 97.44% of tariff lines in the case of products from China, and with respect to 87.5% of tariff lines in the case of products from Cambodia; more tariffs will be eliminated, with respect to 0.09% and 2.5% of the lines, in a period between 5 and 20 years.

The RCEP

On November 15, 2020, China and 14 other countries signed the Regional Comprehensive Economic Partnership (RCEP) Agreement.

This Agreement contains provisions on trade in goods; rules of origin; customs procedures and trade facilitation; sanitary and phytosanitary measures; standards, technical regulations and conformity assessment procedures; remedial trade measures; trade in services; temporary movement of natural persons; investment; intellectual property; electronic commerce; competence; SMEs; economic and technical cooperation; and public procurement; institutional arrangements; and provisions on dispute settlement.

It has four annexes related to market access (Lists of tariff commitments, Lists of specific commitments in the area of ​​services, Lists of reservations and non-conforming measures in the area of ​​services and investment, and Lists of specific commitments on the temporary movement of natural persons) .

In general, tariffs will be eliminated on 90% of tariff lines; As regards trade in services, some participating signatories have made commitments for more than 100 sectors / subsectors.

In addition, participating countries adopt a negative list approach to investment commitments in sectors other than services.

The RCEP Agreement will enter into force 60 days after its ratification by at least six members of the Association of Southeast Asian Nations (ASEAN) and three non-ASEAN non-member signatories.

New Zealand

On January 26, 2021, the Protocol for the Improvement of the Free Trade Agreement between China and New Zealand was signed, which has not yet entered into force.

It reviews the original Agreement in five areas (rules of origin, customs procedures and trade facilitation, technical barriers to trade, trade in services, and cooperation); and chapters related to electronic commerce, public procurement, competition policy, and environment and trade are added.

During the period under review, China has been negotiating the following agreements: the FTA with Japan and the Republic of Korea; FTA with the Gulf Cooperation Council; FTA with Sri Lanka; the FTA with Israel; the FTA with Norway; FTA with the Republic of Moldova; FTA with Panama; the FTA with Palestine; and the Agreement on Trade in Services and Investments between China and Belarus.

In addition, the country participates in further or improvement negotiations with the Republic of Korea, Peru and Singapore. The authorities indicate that, on December 11, 2018, a Memorandum of Understanding was signed between MOFCOM and the Ministry of Economic Development of the Russian Federation, regarding a plan for cooperation and development in the Far East region of the Federation. from Russia, a policy document that aims to guide cooperation between the two sides and serve as a guide for Chinese companies to invest in the region.

On January 15, 2020, China and the United States signed the Economic and Trade Agreement, Phase 1, between China and the United States.

It contains provisions relating, among other things, to intellectual property, technology transfer, trade in food and agricultural products, and financial services.

The WTO and Regional Trade Agreements

The number and scope of RTAs have increased over the years, and there has been a significant increase in large plurilateral agreements.

Non-discrimination between trading partners is one of the fundamental principles of the WTO; however, Regional Trade Agreements, which are reciprocal preferential trade agreements between two or more partners, constitute one of the exceptions and are authorized under the WTO, subject to a set of rules.

 

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