Despite the obvious benefits of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), National Assembly (NA) deputies, at a discussion session on November 5, expressed their concerns over the ability of local enterprises to take advantage of opportunities ushered in by the pact.

NA deputy Vu Tien Loc from Thai Binh Province expresses concern over domestic enterprises’ capacity to benefit from the CPTPP

Benefits

At the discussion session on the CPTPP ratification, NA deputy Vu Tien Loc from Thai Binh Province threw his support behind Party General Secretary and State President Nguyen Phu Trong’s proposal on the early ratification of the CPTPP due to the significant benefits of the deal.

According to Loc, who is also the president of the Vietnam Chamber of Commerce and Industry, Vietnam will have opportunities to expand its trade and investment ties with CPTPP's member countries. Domestic companies can increase their revenues and offer more jobs, contributing to economic growth and the improvement of people's living standards.

In addition, the country will have more partners, reducing its dependence on certain markets.

These opportunities are more valuable amid the fluctuations of the global economy, especially with the escalating trade friction between the U.S. and China.

The CPTPP is also expected to be beneficial for local laborers and helps build brands for made-in-Vietnam products given Vietnam’s commitments under the deal, Loc stated.

NA deputy Tran Hoang Ngan from HCMC agreed with Loc, adding that the CPTPP is a new-generation agreement with high standards in transparency. The comprehensive trade pact covers not only trade and services but also investment, intellectual property, the labor market, small and medium enterprises and State-owned firms.

The CPTPP, whose member economies boast an average gross domestic product per capita of over US$30,000, will help Vietnam improve the quality and safety of its products, increasing their competitiveness.

Apart from the influx of foreign direct investment in recent times, Vietnam can choose strong investors, including those from Canada, Australia and New Zealand, Ngan added.

Low capability to tap free-trade benefits

At the discussion session, many NA deputies agreed that local enterprises have yet to make the most of opportunities brought by the free trade agreements (FTAs) that Vietnam had earlier signed.

According to the General Statistics Office of Vietnam, the country enjoyed a trade surplus of US$2.7 billion in the first half of the year but faced a trade deficit of US$29.1 billion with its FTA partners. The country incurred a total trade deficit of US$26.7 billion and US$32.5 billion with its FTA partners in the first six months of 2016 and 2017, respectively.

Loc said FTAs were expected to bring multiple benefits for Vietnam, but the country might fail to take full advantage of these deals. For example, the country can enjoy only 40% of the benefits from preferential tax policies offered by FTA partners.

Loc proposed issuing mechanisms to enhance the capability of both authorities and enterprises. The policies and legal system should be built in a manner that not only fulfills commitments under the CPTPP but also responds to possible risks and seizes opportunities under the deal.

Loc noted that Vietnam intended to issue a decree on preferential policies for import-export taxes but has yet to draw up plans to offset the State budget revenue shortfall, boost public-private partnerships and prevent tax evasion and transfer pricing.

Meanwhile, NA deputy Bui Sy Loi from Thanh Hoa Province noted that the CPTPP, according to the Government, would leave positive impacts on the food, tobacco, textile-garment, chemical and plastics sectors. However, these sectors use a large number of workers, so they find it hard to improve labor productivity.

He suggested amending both the Labor and Trade Union Laws.

According to Deputy Prime Minister and Minister of Foreign Affairs Pham Binh Minh, the CPTPP does not include requirements for the labor market but highlights labor standards stipulated in the International Labor Organization’s statement, issued in 1998.

Accordingly, foreign enterprises are allowed to establish labor unions, which must comply with the laws of host countries with the purpose of protecting laborers’ legitimate rights and interests.

SGT