Stronger Together | Asian Legal Affairs

After eight years of negotiations, the Regional Comprehensive Economic Partnership (RCEP) finally came into effect in early 2022. Lawyers believe it will bring new opportunities for Chinese companies as well as the legal services market.

The Regional Comprehensive Economic Partnership (RCEP), a free trade agreement between 15 Asia-Pacific countries, entered into force earlier this year. Given that the member countries represent approximately 30% of the world’s population and 30% of the world’s GDP, RCEP is by far the largest trading bloc in history.

The lawyers say that due to its growth potential, RCEP will not only boost the post-pandemic recovery of the global economy, but is also of critical importance to China’s economic development. “RCEP is providing important support to China to build confidence in reform and further opening up,” said Henry Huang, managing partner of law firm Grandall.

Feng Xiaopeng, Partner at King & Wood Mallesons (KWM), agrees: “The formal entry into force of RCEP means that around 30% of global economic output will become an integrated market.

Data from the Peterson Institute for International Economics shows that by 2030, RCEP is expected to lead to a net increase in exports and growth in national income of member states of $519 billion and $186 billion respectively, the largest increase projected GDP of $85 billion going to China.

“While allowing one-third of China’s foreign trade to enjoy zero tariffs, RCEP will also facilitate trade and improve the business environment among members and further open up related services and investment, greatly improving the level of well-being of each signatory and the volume of exchanges between them,” explains Feng.


Stronger interaction between signatories and strengthened investment rules should lead to the vigorous development of regional markets. But lawyers say one of the hallmarks of RCEP is the innovative approaches it takes.

The first example is tariff reduction. Tariff reduction for trade in goods among RCEP members is primarily based on a commitment to achieve zero immediately, or within ten years. An important part of RCEP, the tariff reduction will lead to lower import costs and more export opportunities.

RCEP has created a good development environment and institutional guarantee for cross-border e-commerce, which is gradually becoming an emerging driver of economic growth in Asia.

According to Huang, the tariff relief has greatly boosted cross-border e-commerce business. Guidance notices on the quality of implementation of the Regional Comprehensive Economic Partnership Agreement, issued by MOFCOM and SAMR on January 22 this year, “encourage companies to make good use of energy reduction commitments.” taxes of the Member States. [to further] develop exports.

Huang adds that the guidance notices emphasize “standardization and digitalization of trade and reduction of communication costs” brought about by “promoting high-quality development of cross-border e-commerce and international mutual recognition. digital certificates and electronic signatures”, which also conforms to the characteristics of cross-border e-commerce and contributes to the development in this field.

Feng agrees. For example, Japan previously imposed high tariffs on Chinese imports. “After RCEP, Japan will grant zero tariffs to 86% of Chinese imports. Specifically, 70-80% of products in sectors such as motors and household appliances, nuclear reactors, boilers, vehicles and accessories and medical devices will immediately benefit from zero customs duty, while almost all products in sectors such as clothing and textiles, furniture and plastics will benefit from zero customs duty after the transition,” he said, adding that it undoubtedly benefits cross-border e-commerce enterprises, especially the development of some important industrial fields.

Coordination of rules of origin is another key achievement of RCEP. Unlike bilateral rules of origin in most free trade agreements, RCEP takes a regional cumulative approach, which helps companies reduce operational uncertainty.

“It will help multinationals design a more flexible industrial scheme, establish a more refined industrial chain division system, and reduce the production cost of finished products. This will not only help expand exchanges among RCEP members, but also greatly promote the deep integration and development of regional supply chain and value chain,” Feng said.

Meanwhile, the signing of RCEP will also significantly reduce barriers to building overseas warehouses, smoothing the movement of resources and goods from countries in the region, and facilitating the cooperation of technology, service capital and talents. Feng advises that “enterprises can take this opportunity to invest capital or human resources overseas, promote the creation of a regional brand, build high-quality overseas warehouses, and provide more functions for these warehouses. , and effectively integrate overseas market resources”.

However, before further cooperation, Chinese companies need to complete some preliminary work. Since last January, China has also signed 19 preferential trade agreements (arrangements), involving 26 countries and regions. Feng reminds that “companies should carefully study the different rules of origin and understand and compare the tariff concessions their products are eligible for under different agreements in advance, in order to select the agreements with the greatest tariff reduction.”


Despite all the benefits, the expected intensification of competition between industries and businesses is no small challenge. Both experts suggest businesses be fully prepared for fierce competition.

Since cross-border e-commerce is often not constrained by regional and national borders, the movement of goods can pose intellectual property (IP) issues. Huang thinks this is one of the challenges facing Chinese companies.

In fact, “IP policy and compliance are long-term issues facing Chinese companies and should become their top priority (under RCEP),” Huang says. In this regard, he suggests that “companies can hire lawyers to provide a full range of services. With the entry into force of RCEP, enterprises also need to pay more attention to IP protection in cross-border e-commerce, respond to overseas IP disputes, and protect their rights.

Feng also points to “the contradiction between the unlimitedness of cross-border e-commerce and the territorial characteristics of intellectual property protection as the root cause of many intellectual property disputes in cross-border e-commerce.”

Compared with TRIPS and other agreements, Feng believes that RCEP’s intellectual property provisions not only take into account the situations of different member states, but also balance the interests of different parties in the legal property relationship. intellectual. In fact, China’s intellectual property protection standards are generally similar to those of RCEP, and much higher than the TRIPS Agreement, Feng adds.

Therefore, when intellectual property disputes arise, “Chinese enterprises should take active prevention and response measures, immediately seek professional legal advice, and establish good cooperation with Chinese enterprises that can provide legal services to one-stop shop… Chinese companies share the same language and culture. with customers, and can jointly develop targeted response strategies to prevent unreasonable and unnecessary claims of intellectual property infringement resulting in product recall, or litigation or other penalties, resulting in significant economic loss,” suggests Feng.


Chinese companies have stepped up preparations in anticipation of a possible surge in customer demand. Huang told the ALB that Grandall’s recent initiatives include a partnership with the Institute for Reform and Development Research (CIRD) of China (Hainan) to establish the Free Trade Port Legal Research Center. CIRD-Grandall of Hainan to “intensify research on free trade port laws, RCEP and TPCPP”. rules, so as to promote the comprehensive development of Chinese enterprises within the framework of RCEP and the free trade port system.

In the future, “China could combine the development policies of 21 free trade zones, especially Hainan Free Trade Port which can establish the most direct contact with ASEAN among RCEP signatories, to further develop the modern service industry and manufacturing industry,” Houang added.

Feng shares that currently, among RCEP member states, KWM has physical presence in China, Australia, Japan and Singapore, and cloud offices in ten countries, including South Korea, Malaysia , Thailand and New Zealand. This is the most practical “hardware preparation” in the business.

KWM has also strengthened cooperation with relevant countries, such as holding workshops with government agencies and law firms in Singapore to actively provide suggestions to customers in Southeast Asia. The company will intensify its research in the new year to “sort out tariff agreements and rules of origin for customers and help them improve customs clearance and rules of origin management arrangements.”

“Over the next three to five years, our involvement in business related to other RCEP members is expected to grow exponentially,” Feng said.

Comments are closed.