22:37 (GMT +7) - Friday 16/11/2018

Vietnam Today

CPTPP submitted to NA for approval

Released at: 12:49, 03/11/2018

CPTPP submitted to NA for approval

The 14th National Assembly's ongoing session (Photo: VNA)

Vietnam expected to become seventh county to ratify trade deal, after Japan, Mexico, Singapore, Australia, New Zealand, and Canada.

by Linh Chi

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) was submitted on November 2 by State President Nguyen Phu Trong to the 14th National Assembly’s ongoing session for approval.

The agreement is expected to help Vietnam expand its exports and more deeply join global value chains.

A meeting on CPTPP in Vietnam's Central city of Da Nang in November last year (Photo: apec.vn)

The Vietnam News Agency on the same day quoted experts as saying Vietnam will face challenges caused by the impact of foreign investment on domestic firms and that Vietnamese businesses should make preparations in order to make the best use of incentives offered by the deal.

Minister of Industry and Trade Tran Tuan Anh said the CPTPP is a comprehensive agreement as it covers principles not only in trade and investment but also in intellectual property. It requires also Vietnam reform its investment and business environment as well as its institutions. He added that the agreement will put competitive pressure on enterprises and the economy, helping Vietnam grow more sustainably.

Ms. Pham Quynh Mai, Deputy Head of the Ministry of Industry and Trade (MoIT)’s Multilateral Trade Policy Department, said that 66 per cent of tariff lines will be eliminated immediately after the agreement takes effect, 86.5 per cent three years after the deal comes into force, and 97.8 per cent after eleven years.

It targets not only traditional sectors like goods, services and investment but new realms such as e-commerce, public procurement, labor, and the environment, she noted.

With a market of nearly 500 million people and 13.5 per cent of global GDP, the CPTPP is a free trade agreement with strategic significance to Vietnam and the business community, as it will push for open markets and investment development and the establishment of free trade ties between Vietnam and many new partners like Canada, Mexico and Peru, thus helping restructure the country’s export markets and ease its dependence on traditional markets.

The deal will also motivate the Vietnamese Government to step up its administrative reform, complete the legal and institutional framework, and create a more open and transparent investment and business climate, Ms. Mai said.

A survey conducted by HSBC in six out of the eleven CPTPP member countries - Australia, Canada, Malaysia, Mexico, Singapore and Vietnam - revealed that about 63 per cent of Vietnamese enterprises believe the agreement will positively impact their business.

Minister Anh said experience from Vietnam joining the WTO and the Vietnam-US Bilateral Trade Agreement shows that the country can limit the adverse impacts if it knows how to utilize opportunities and take the initiative in realizing its integration commitments.

He stressed that sectors such as services, post and telecommunications, e-commerce, garment and textiles, and leather and footwear are forecast to grow under the CPTPP. Conversely, sugarcane cultivation and the sugar industry are expected to face major challenges due to the slow pace of restructuring.

Mr. Luong Hoang Thai, Head of the Multilateral Trade Policy Department, also pointed out challenges regarding the quality of exports and possessing a high-quality workforce, saying that fierce competition will take place not only in the markets of CPTPP member countries but also in Vietnam.

Given this, experts have suggested that Vietnamese businesses learn more about the agreement in order to understand Vietnam’s commitments and the markets of partners, while building and changing their business plans in the mid and long terms.

They should also seek partners in other CPTPP member markets to benefit from their financial strength and technology transfer, thus gaining more opportunities to integrate more deeply in regional and global supply chains, Mr. Thai said.

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