Raphael Madarang, Director of Global Trade Compliance at APL Logistics talked about Regional Comprehensive Economic Partnership & the Comprehensive and Progressive Agreement for Transpacific Partnership (CPTPP) at the ICPA Conference 2018 in Shanghai. He also shared insights on how businesses across Asia can benefit from the opportunities that these potential trade agreements will create.

1. 1
APL LOGISTICS CONFIDENTIAL
The Mega-FTAs:
RCEP and CPTPP
ICPA Asia Conference 2018
Shanghai
GLOBAL TRADE COMPLIANCE & MANAGEMENT
Raphael Madarang, 08 Nov 2018

2. 2
Who’s who
Australia*
Brunei
Japan*
Malaysia
New Zealand*
Singapore*
Vietnam
Cambodia
China
India
Indonesia
Korea
Laos
Myanmar
Philippines
Thailand
Canada*
Chile
Mexico*
Peru
RCEPCPTPP
28.5% of global trade
31.6% of global GDP
46% of global population
16% of global trade
13.5% of global GDP
7% of global population
*CPTPP enters into
effect on 30 December
for these countries

3. 3
Tidying up the noodle bowl?
Australia
Brunei
Canada
Chile
Japan
Malaysia
Mexico
New Zealand
Peru
Singapore
Vietnam
United States
Existing FTAs
• Most of the eleven
countries already have
existing FTAs with each
other.
• Opportunities may still be
available for countries
without common FTAs
which the TPP can bridge
(e.g., Australia-Canada,
Japan-Canada, Japan-New
Zealand, Malaysia-Peru,
etc.)

4. 4
 ASEAN is the pivotal
player in the RCEP
 A combination of all
ASEAN + 1 agreements
Tidying up the noodle bowl

5. 5
Where we are at
CPTPP RCEP
• Ratification threshold met
and set for implementation
by 30 December 2018
• Marginally different from
original TPP text. Changes
mainly limited to
investment, services,
intellectual property, and
government procurement.
• Trade in Goods provisions
(market access, rules of
origin, trade remedies, etc.)
remain the same.
• 24 rounds of negotiations
completed
• Aiming for substantial
conclusion of negotiations
by end-2018
• Sticking points remain:
- China and India
- Bilateral-pairing
approach
- 20 year staging
periods
- Mode 4

6. 6
 A trade agreement is only as good as the customs administrations
enforcing it
 Average time to clear imports through customs (World Bank)
Trade Facilitation
Country grouping Border compliance
(hours)
Documentary
compliance (hours)
OECD countries 10.7 4.5
CPTPP countries 43.8 32.36
RCEP countries 71.61 60.85

7. 7
Trade Facilitation Frameworks
RCEP CPTPP
Will have Customs Procedures
and Trade Facilitation (CPTF)
Chapter, which will use WTO
TFA provisions as a benchmark
Interesting because TFA
commitments for member
countries vary significantly.
Unsure if this will simply carry
over to RCEP, or involve deeper
commitments.
Has a comprehensive chapter
of Trade Facilitation
- Automation
- Self-certification
- Advance rulings
- Express shipments
- Pre-arrival processing and
specified release times
- Transparency / discipline on
penalties
On top of these, members are
also parties to the TFA

8. 8
 Disputes
– customs value
– tariff classification
– country of origin / FTA eligibility
 Format and completeness of declaration elements
– incomplete product descriptions
– typographical errors
– mismatches in importer/exporter names
– inaccurate quantities
 Physical inspections
Common issues

9. 9
 Integration with customs systems for seamless
declaration processes
 Enforceability of advance rulings
 How to retain FTA benefits in a hub setting
Other challenges

10. 10
COOs and self-certifications
FTAs among ASEAN+ 1 members FTA Document or COO
China
Australia
China-Australia FTA COO or
declaration of origin
New Zealand
China-New Zealand FTA
COO or declaration of origin
South Korea China - Korea FTA COO
South Korea (very limited
products)
APTA COO (Combined
declaration and certificate)
India (very limited products)
APTA COO (Combined
declaration and certificate)
Japan
Australia JAEPA Certificate of Origin
India IJCEPA Certificate of Origin
Korea
Australia Korea-Australia FTA COO
India India - Korea CEPA COO
New Zealand
New Zealand - Korea FTA
Origin Declaration
Australia
New Zealand Not Required
Japan JAEPA Certificate of Origin
China
China-Australia FTA COO or
declaration of origin
Korea Korea-Australia FTA COO
India
Korea India - Korea CEPA COO
China (very limited
products)
APTA COO (Combined
declaration and certificate)
Korea India - Korea CEPA COO
New Zealand
Australia Not Required
China
China-New Zealand FTA
COO or declaration of origin
Korea
New Zealand - Korea FTA
Origin Declaration
Current ASEAN and ASEAN+1 Agreements Certificate of Origin
(COO)
ASEAN
ASEAN Form D
China Form E
India Form AI
Japan Form AJ
Korea Form AK
Australia Form AANZ
New Zealand
Single RCEP Certificate of Origin?
• Simplified documentation process
• Reduced risk of FTA savings losses
• FTA savings potentially retained at piece
level
Unsure as to how this will work under a
self-certification regime

11. 11
The cumulative chain of compliance
Vietnam
supplier
Thailand
Factory
Philippines
supplier
Indonesia
supplier
Korea
Customer
Singapore
Logistics Hub
China Customer
Raw materials Finished products
CO options: Form AANZ,
AK, JP
Only one CO per shipment
Which one should be
chosen?
Do you know the final
destination?
Cumulation is CO/FTA specific.
Can you keep track of COs for
cumulation?
Can it be monitored on costings,
tariff shift analysis?
Customs may challenge FTA
use and audit importers
Is your audit trail sufficiently
explanatory?
Australia
Customer
Back to back certification is
required and CO/FTA specific
Can you keep track of original CO
information for back to back
applications?
Can pick and pack operations be
performed?
Is your WMS or ERP systems
capable of segregating FTA vs.
non-FTA goods
Will Singapore customs issue the
certificate?
US
HQ
Invoice 1
Invoice 2
Cumulative chain of compliance – any error in declaration/documentation is carried over and could result in a
rejection of the certificate of origin at the destination

12. 12
 CPTPP and RCEP could potentially bridge gaps between
existing bilateral and regional agreements
 Trade facilitation is a major theme for both agreements
 Success of both ambitious deals rest on enforceability of
commitments
 RCEP has a common base, and ASEAN + 1 agreements
may be gauge to assess RCEPs future enforcement
 CPTPP may be less predictable
In closing

13. 13
Thank you!
For more information, please contact:
Raphael Madarang
+852 2302 7436
raphael_madarang@apllogistics.com