1. The comparison that keeps coming up
RCEP against the bilateral agreements.
The answer is not one of them. It is a comparison, per product and per destination, that has to be repeated as the schedules move.
2. The two variables
The rate
Both agreements have schedules. Both are still staging down. The lower one changes over time.
The origin rule
Both have product-specific rules. They are drafted separately, and they do not produce the same answers.
3. Where the origin rule decides
The cumulation
RCEP allows cumulation across fifteen parties.
A bilateral agreement allows it only between the two parties.
For a manufacturer using Japanese, Korean, Australian or New Zealand components, this single difference often decides qualification.
The value content threshold
The thresholds differ, and the calculation methods differ.
The de minimis rule
The tolerated share of non-originating material differs.
4. The four outcomes
Both qualify: compare rates.
Only bilateral: use the bilateral certificate.
Only RCEP: use the RCEP certificate.
Neither: pay MFN, or examine the sourcing.
5. The error that costs most
Using the wrong route for years without checking.
An exporter that adopted a bilateral certificate when the agreement entered into force, and never revisited it, is likely to be paying more than necessary on at least some product lines.
6. A scenario
A manufacturer of packaging machinery used the bilateral certificate for all exports to Korea.
The RCEP schedule had staged down faster for two of its product lines.
The difference had accumulated for three years before the error was found during an unrelated review.
7. What the review takes
The product list.
The tariff line in each destination.
Both schedules, current year.
Both product-specific rules.
The bill of materials.
Half a day for the first product, less for each subsequent one, because the component data is reused.
8. Closing view
The two agreements are an opportunity.
Whether they deliver depends on whether someone performs the comparison.
*This article is based on RCEP and China’s bilateral free trade agreements.*