Regional Comprehensive Economic Partnership (RCEP)

The Regional Comprehensive Economic Partnership (RCEP) is established as a free trade area among the Member States of ASEAN and its partners, including Australia, China, Japan, Korea, and New Zealand. The agreement is designed to broaden and deepen regional economic integration, strengthen growth, and advance cooperation through a modern and comprehensive framework. As the world's largest free trade agreement by geographic coverage, RCEP has significant implications for import duties and taxes in the Philippines.

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Primary Objectives

• Parties establish a mutually beneficial partnership to facilitate regional trade and investment.
• The agreement progressively liberalizes trade in goods through the elimination of tariff and non-tariff barriers.
• RCEP expands trade in services with substantial sectoral coverage to eliminate discriminatory measures.
• The framework creates a competitive investment environment to enhance opportunities and protection for investors.

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Tariff Commitments

• Parties reduce or eliminate customs duties on originating goods as specified in each Party's Schedule of Tariff Commitments.
• Exporters utilize the most-favored-nation (MFN) applied rate if it is lower than the rate provided in the RCEP Schedule.
• Two or more Parties may accelerate or improve tariff commitments unilaterally or through mutual consent.

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Non-Tariff Measures

The agreement addresses obstacles to trade to prevent unnecessary barriers:

• Quantitative Restrictions - Parties generally eliminate prohibitions or restrictions on imports and exports, except in accordance with WTO rights.
• Import Licensing - Parties implement procedures in a transparent manner and notify other Parties to ensure predictability.
• Technical Consultations - A Party may request consultations if it considers that a measure adversely affects trade, with a goal of reaching a solution within 180 days.

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Temporary Admission and Transit

• Customs territories conditionally relieve goods from import duties if the owner brings them in for specific purposes (e.g., display or repair) and intends to re-export them.
• The agreement grants duty-free temporary admission for containers and pallets used in international traffic, regardless of their origin.
• Parties grant duty-free entry to samples of no commercial value from other Parties.

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Rules of Origin (ROO)

Authorities must determine originating status for a good to qualify for preferential tariff treatment. A good qualifies as originating if it meets one of the following:

• Wholly Obtained or Produced - A Party obtains the good entirely within its territory.
• Produced Exclusively from Originating Materials - A producer creates the good using materials that already qualify as originating from one or more Parties.
• Product-Specific Rules (PSR) - The product satisfies specific requirements such as a Change in Tariff Classification (CTC) or a Regional Value Content (RVC) threshold.

For a broader explanation of how rules of origin work, see our Rules of Origin Guide.

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Operational Certification

• Proof of Origin - Importers claim preferential treatment via a Certificate of Origin issued by an authorized body, or a Declaration of Origin by an approved exporter.
• Back-to-Back Proof of Origin - An intermediate Party may issue this for goods that do not undergo further processing beyond logistics or preservation.
• Record-Keeping - Exporters, producers, and importers must retain all records necessary to prove originating status for at least three years. This aligns with the record-keeping requirements under Post-Clearance Audit procedures.