Malaysia and RCEP

Sign one certificate of origin, and a Malaysian-made good can move duty-free across a market that stretches from Auckland to Beijing to Kuala Lumpur. That, in one line, is what RCEP changed for Malaysian exporters.

The Regional Comprehensive Economic Partnership brings 15 Asia-Pacific economies under a single trade rulebook. For Malaysia it has been in force since 18 March 2022. This guide walks through who is in the bloc, how the tariff cuts are staged, and — the part that decides whether an exporter actually saves money — the rules of origin.

Who is in RCEP, and when did it start?

RCEP joins the ten ASEAN member states with five of ASEAN’s dialogue partners. India took part in the negotiations but withdrew in November 2019, so the final agreement has 15 parties, according to Malaysia’s Ministry of Investment, Trade and Industry (MITI).

Group	Members
ASEAN (10)	Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam
ASEAN partners (5)	Australia, China, Japan, South Korea, New Zealand

The agreement did not switch on everywhere at once. It entered into force on 1 January 2022 for the first ten countries that had ratified — Australia, Brunei, Cambodia, China, Japan, Laos, New Zealand, Singapore, Thailand and Vietnam. Each remaining signatory joined 60 days after depositing its instrument of ratification with the ASEAN Secretary-General.

Malaysia ratified RCEP on 17 January 2022, and the agreement took effect for Malaysia on 18 March 2022. The Philippines was the last to come on board, bringing RCEP into force for all 15 members by 2 June 2023.

Taken together, the bloc is large. MITI puts the 15 economies at about 2.3 billion people — roughly 29.46% of the world’s population — and around 30.64% of global GDP, on 2020 World Bank figures.

What does RCEP cover?

RCEP is broader than a pure tariff deal. Its 20 chapters run across trade in goods, services and investment, and reach into intellectual property, e-commerce, competition, government procurement, support for small and medium enterprises, and dispute settlement, per MITI.

For most Malaysian businesses, though, two things matter most: how far and how fast import duties fall, and what it takes to qualify a product for those lower duties.

How do the tariff cuts work?

Members have committed to eliminate a large share of tariffs — but gradually, and not on everything. Vietnam’s National Trade Repository summarises the headline commitment as eliminating “about 90% of import tariffs within 20 years,” with the longest staging running up to 25 years for some lines. Sensitive sectors can be left off the schedule entirely.

MITI has framed the same commitment as the “eventual elimination of around 90% of tariff among members,” and said Malaysia was expected to be ASEAN’s largest beneficiary in export gains, projecting an increase of about US$200 million, according to reporting on MITI’s statements.

Two features are worth understanding:

• Staged, not instant. Each country publishes its own schedule of tariff commitments. A duty may drop to zero on day one, or step down over 10, 15, 20 or as long as 25 years. Lines a country chooses not to liberalise are simply excluded.
• Country-specific schedules. Because members kept individual schedules rather than one common tariff, the duty a Chinese buyer pays on a Malaysian product may differ from what a Japanese buyer pays. Exporters should check the destination country’s RCEP schedule, not assume a single rate.

The wider prize is efficiency. Allianz Trade estimated that RCEP’s common rule of origin could cut export costs enough to lift merchandise exports among signatories by around US$90 billion a year on average. It also noted how low intra-bloc barriers already are: ASEAN’s average applied tariff on imports from RCEP partners had fallen to about 1.8%, from 4.9% in 2005.

What are the rules of origin — and why do they matter?

A tariff cut is only useful if your goods qualify as “originating.” RCEP’s rules of origin sit in Chapter 3, with two annexes: the product-specific rules and the minimum information requirements for documentation, per MITI.

The practical breakthrough is a single, common rule of origin. Instead of confirming different local-content standards and paperwork for each of the older ASEAN-plus-one agreements, a company can apply one set of criteria and ship to every RCEP market on one certificate, as Allianz Trade describes it.

A good generally qualifies as originating in one of three ways:

1. Wholly obtained in a member country — for example, crops grown or minerals mined there.
2. Produced exclusively from materials that already originate in the RCEP region.
3. Substantially transformed to meet the product-specific rule for that item — typically either a change in tariff classification or a regional value content requirement.

Two provisions make this materially easier for Malaysian manufacturers:

• Cumulation. Inputs sourced from any RCEP country count as originating when you work out whether your finished good qualifies, per Vietnam’s National Trade Repository. A Malaysian factory can combine Japanese components, Chinese materials and local labour and still meet the origin test — which encourages regional supply chains.
• A move toward self-certification. RCEP provides that exporter self-certification of origin will apply within no more than ten years of entry into force, again per Vietnam’s repository. Until Malaysia adopts that fully, exporters use an issued certificate.

How does a Malaysian exporter actually claim the preference?

In Malaysia the paperwork runs through MITI. Exporters obtain a Preferential Certificate of Origin — Form RCEP — certified by MITI’s Trade and Industry Cooperation Section, according to MITI’s PCO guidance.

The process is electronic. Applications for Cost Analysis and for the certificate itself go through the ePCO system operated by DagangNet Technologies; for eligible schemes the certificate is endorsed automatically with an electronic signature and seal once approved.

Milestone	Date
India withdraws from RCEP negotiations	November 2019
RCEP enters into force (first 10 members)	1 January 2022
Malaysia ratifies RCEP	17 January 2022
RCEP enters into force for Malaysia	18 March 2022
RCEP in force for all 15 members	2 June 2023

Malaysia also operates ASEAN-Wide Self-Certification (AWSC) under the separate ATIGA agreement, which lets approved exporters declare origin on commercial documents rather than apply for a formal certificate — a model that hints at where RCEP certification is heading.

What’s next

If you export from Malaysia, three practical steps follow. First, pull the destination country’s RCEP tariff schedule and compare the RCEP rate against Malaysia’s other agreements — RCEP is not always the cheapest route, and an existing bilateral FTA may beat it for a given product. Second, check your bill of materials against the product-specific rule for your item, remembering that cumulation lets you count inputs from across the bloc. Third, register with MITI’s ePCO system so you can issue Form RCEP.

Watch, too, for the phase-in. Because most tariff lines fall in steps over 20 years (some over 25), the RCEP rate on your product may keep dropping — so a shipment that is not worth the paperwork today can become worth it in a later year. And keep an eye on the transition to exporter self-certification, which will cut administrative cost once Malaysia implements it in full.