During the negotiation period and signing of the Regional Comprehensive Economic Partnership (RCEP) between ASEAN and China, Japan, South Korea, Australia and New Zealand, the participation of Myanmar in RCEP has been covered in newspapers and shared the discussions with business people.
The RCEP was discussed for eight years, starting in 2012, and the ASEAN countries, including Myanmar and China, Japan, South Korea, Australia and New Zealand, signed the agreement on 15 November 2020. The RCEP agreement is the world’s most significant trade agreement covering 30 per cent of the world’s population, 30 per cent of global gross domestic product (GDP), 29 per cent of world trade and 30 per cent of foreign direct investment. The agreement with Myanmar comes into force on 1 May 2022, and the country achieves access to opportunities of the agreement.
Among partner countries of ASEAN that signed in RCEP, China is the first one that recognized the letter expressing agreement with Myanmar comes into force starting 1 May 2022, and Myanmar can get the priorities in customs of China and other chances.
Myanmar, an ASEAN member country, is still suffering the chances of the ASEAN-China Free Trade Area-ACFTA signed in 2010. However, the ACFTA is the first Free Trade Agreement-FTA among ASEAN and partner countries, so it included only a few of trade and servicing trade, investment, and other sectors.
The RCEP agreement carries multi-sectoral things in line with the trend, and Myanmar-China economic cooperation can be done widely under the agreement.
Myanmar entrepreneurs have previously used the ASEAN-China Free Trade Area- ACFTA and can enjoy the chances under the RCEP.
In RCEP, it pre-determines the products to be exported regarding the customs procedures that are not included in ACFTA, customs value and products/produced by Myanmar and customs clearance within 48 hours from the time of products arrive. Therefore, the products exported to China can be taken out faster than before, according to RCEP.
Moreover, it can protect the severe risks for the local enterprises such as the high import volumes, selling with discount, export with the help of other countries. So the trade can be made full of trust between Myanmar and China, according to RCEP.
Myanmar business people will be exempted from customs tax for 5,969 products now. They are 368 animal products, 389 agricultural products, 10 edible oil products, 163 foodstuffs, 181 mineral products, 1,127 chemical products and work materials, 125 plastic materials, 67 leather products, 234 forest products, 146 cement, mirror and its related materials, 62 pearl and valuable gems, 554 units of metal and metal-based materials, 554 units of metal and metal-based materials, 1,058 machines, 124 vehicles, planes, ships and transportation parts, 240 medicines, movie materials and instruments and so on. The remaining goods also receive reduced customs tax to be paid yearly.
The trade between Myanmar and China was $5420.052 million for export in 2019-2020, while the import volume amounted to $6729.174 million. The export volume was $5160.825 million, and the import volume was $4647.096 million due to the impacts of the COVID-19 pandemic in 2020-2021.
Therefore, Myanmar can enjoy duty-free and other reliefs for the exports to China, and it can earn export incomes, create job opportunities and increase the taxes.
Regarding the services, Myanmar eased 52 sectors under ACFTA and 80 sectors in the economy, communication, construction, distribution, education, environment, finance, health, tourism, transportation and other services under the RCEP. China eased 88 sectors under ACFTA and 95 sectors under RCEP.
By easing service sectors, it can improve economic capacity, enhance the competitiveness of exports and products of developing countries in international markets, offer varieties of choices, foreign direct investment inflows into Myanmar, grab chances to create job opportunities and technological aid and extend service sectors and other relevant parts.
Myanmar and China can launch technological cooperation in the fields expressed in RCEP as electronic material trade, MSMEs, procurement of government, supports, and capacity building programmes for IP, which are not included in ACFTA.
The RCEP agreement is a multi-sectoral world standard agreement, and being a member country, it can get chances to reform the laws and frameworks for the country in line with the international norms in implementing the provisions of the agreement and other opportunities to improve the capacity of government and private organizations.
Moreover, Myanmar is a less developed country, so there is no need to follow some commitments in the agreement, and it can enjoy a one-sided chance for three to five years. During that period, the country can draft a legal framework, develop the human resources and promote the capabilities of organizations.
In conclusion, as the RCEP enters into force between Myanmar and China, Myanmar starts a new chapter in regional economic cooperation for future economic collaborations in addition to trade and investment.