On November 15, 2020, a total of 10 ASEAN countries including Thailand, Malaysia, Singapore, Indonesia, Philippines, Brunei, Vietnam, Laos, Myanmar, Cambodia, along with five other Asia-Pacific countries, namely China, Japan, South Korea, New Zealand, and Australia, concluded and signed a trading agreement. Given that these 15 member countries have an aggregate population of more than 2.2 billion, with a total gross domestic product (GDP) in excess of US$25 trillion, accounting for 1/3 of the world economies, this is considered a free trade agreement (FTA) with the largest economy and greatest population in the world. After signing, each member country will start the legal approval process within their country. If 9 of the 15 countries are cleared for approval, the agreement will begin to take effect. From then on, more than 90% of the goods in these participating regions will enjoy a zero tariff immediately, or move towards the goal of dropping to a zero tariff within ten years. 

    Taiwan has not yet joined the RCEP, while the RCEP member countries include the countries (China, Japan, and South Korea) where PCB’s are produced, as well as the countries that Taiwan primarily exports its PCBs to. Therefore, it is critical to carefully consider if the accession to RCEP may or may not impact Taiwan’s sales or competitiveness. As such, we have analyzed the impact of these aspects regarding the differences in terms of sales tariffs and the purchase of raw materials.

    In fact, there are already diverse trade agreements in existence amongst each of the RCEP member states. Therefore, even when the RCEP is concluded and signed, it is believed that it should not bring much change to the status quo based on tax reduction schedule and range. As for electronic products, the ITA under the WTO structure is already considered a zero-tariff product, not to mention the fact there is already the ECFA between Taiwan and China. In addition, the deployment by Taiwan’s PCB manufacturers is relatively high in China and Southeast Asia; as such, although Taiwan did not make itself a member of RCEP, Taiwanese factories can enjoy a free ride and still enjoy the benefits of RCEP.