1. The two agreements in force
The China-ASEAN Trade in Goods Agreement, with the Form E.
RCEP, in force for China from 1 January 2022.
2. The four combinations
Both qualify
Compare rates.
Only the bilateral rule qualifies
Use the Form E.
Only RCEP qualifies
Use the RCEP certificate.
Neither qualifies
Pay the MFN rate, and consider whether the sourcing can be adjusted.
3. Why one may qualify and not the other
The origin rule
Different tariff change requirements and different regional value content thresholds.
The cumulation
RCEP allows cumulation across fifteen members. The bilateral agreement allows it only between China and the ASEAN member concerned.
The specific rule set
Product-specific rules are drafted separately in each agreement.
4. The two rules of thumb
Where inputs come entirely from China and the destination, the bilateral route is usually at least as favourable.
Where inputs come from Japan, Korea, Australia or New Zealand, RCEP’s cumulation often decides the question.
Neither rule of thumb replaces the calculation.
5. The calculation
Identify the product’s HS code in the destination.
Read the product-specific rule in each agreement.
Identify each material’s HS code and source.
Test the tariff change rule.
If it fails, test the value content.
On qualification, compare rates.
6. The record
Keep the test result for each product, with the year it was performed.
The rates change annually. The origin conclusion can change with a sourcing change.
7. Closing view
Two agreements, four possible outcomes, and a calculation that has to be done per product.
That is the structure of ASEAN trade for Chinese exporters now.
*This article is based on the China-ASEAN Trade in Goods Agreement and RCEP. Exporters should confirm requirements with China Customs.*