Joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) will provide Vietnam with a good opportunity to continue perfecting its socialist-oriented market economy institutions and improving its business and investment environment in a more open and transparent manner, many experts have said.

Vietnam has recently approved the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) 

CPTPP is the new name of the Trans-Pacific Partnership Agreement (TPP), made up of 11 signatories following the US’ withdrawal. The current member states are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam, who signed the deal in March 2018.

The Vietnamese National Assembly passed a resolution ratifying the CPTPP and related documents on the afternoon of November 12. Mexico, Japan, Singapore, New Zealand, Canada and Australia had already ratified the agreement.

It is considered a high-quality free trade agreement and one of the most comprehensive trade deals ever concluded. CPTPP member states form a giant market with 500 million consumers, accounting for 15 percent of the world’s gross domestic product (GDP) and 15 percent of the global trade turnover.

The pact not only mentions traditional issues regarding tariff cuts, the services market, intellectual property, and technical barriers related to trade; but also addresses new and non-traditional issues related to labour, the environment, and the purchase of state-owned enterprises.

In addition, member states signed several bilateral agreements and commitments in the form of letters and memoranda of understanding.

For Vietnam, being one of the first countries to join the agreement demonstrates the Party and State’s policy of taking the initiative in international integration, affirming the country’s important geo-political position and role in both Southeast Asia and in the Asia-Pacific region, as well as raising its position in the Association of Southeast Asian Nations (ASEAN), the region and the world.

The country’s ratification of the agreement is a step towards realising its policy of multilateralisation and diversification of international relations. The agreement is expected to open up more chances and favourable conditions, helping boost Vietnam’s exports to countries in Asia, America and Oceania, including such major markets as Japan, Australia and Canada.

Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry, stated that the CPTPP will offer Vietnam a chance to expand its trade ties with new potential markets in America, and expand and deepen relationships with current markets, including many strategic partners.

This is also an opportunity to raise profits for enterprises, generate more jobs for labourers, improve people’s living conditions, boost economic development, and multilateralise international economic relations, thus helping ensure sustainable and autonomous development, Loc said. He added that the opportunity is more valuable in the context of the world’s unstable economic situation with its escalating trade wars and conflicts.

According to a survey carried out by the Ministry of Planning and Investment, the CPTPP can help the country’s GDP, export and import increase by 1.32 percent, 4.04 percent and 3.8 percent by 2035, respectively.

Engaging in free trade agreements with member states will help Vietnam restructure its import-export markets in a more balanced manner, thus contributing to increasing the country’s independence and autonomy.

It will also offer a chance for the country to participate in a supply chain formed after the agreement becomes effective so it can take part in production stages with higher added value, said the survey.

Last year, Vietnam’s total trade turnover with CPTPP member states surpassed 67 billion USD, accounting for 15.84 percent of its total import-export value. Vietnam enjoys trade surpluses with almost all signatories.

At present, Vietnam is paying close attention to stepping up production for export with a number of tax incentives and openness in technical barriers.

The agreement will bring about big opportunities for import-export enterprises in Vietnam, including both domestic and foreign invested ones. Its investment and services-related commitments are expected to help improve the nation’s investment environment and facilitate it in attracting more FDI, especially in fields it holds a particular demand.

Currently, all member nations except Peru have invested in Vietnam. Altogether, they have so far poured around 123 billion USD into the country, accounting for nearly 37 percent of the total FDI registered for Vietnam over the past 30 years. 

Action programme needed to fully tap CPTPP: experts

Trade ministers of 11 countries participating in the trade pact, namely Australia, Brunei, Canada, Malaysia, Mexico, Japan, New Zealand, Peru, Singapore and Vietnam, at the signing ceremony on March 8, 2018. 

Vietnam ought to run an action programme which will enable the country to take full advantage of opportunities and overcome challenges from the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), thus bringing great benefits to its enterprises and people, experts have said. 

According to them, what ultimately determines the success of the culminant integration process are efforts to accelerate institutional reform, improving competitiveness to reach leading standards of a modern and integrated market economy in line with the 12th Party Congress’ resolution. 

The Government assigned the Ministry of Justice to coordinate with relevant ministries and agencies in reviewing existing laws, ordinances and decrees, as well as propose amendments and issue new ones in line with trade-pact commitments.

Results of the review showed that of the 265 legal documents reviewed, the total number of laws proposed for amendment and supplementation is seven; 15 commitments and group of commitments were proposed to directly apply; and three international treaties in the field of intellectual property were recommended to join. 

In order to implement the commitments in the CPTPP, Vietnam will have to adjust and amend some legal provisions on trade, customs, intellectual property, and labour.

Vietnam’s experience in joining the World Trade Organisation (WTO) has shown that with serious preparation and an increased effectiveness, the country can successfully do this workload, especially when it is allowed to do following a specific roadmap. 

Additionally, the Government needs to continue accelerating the restructuring of national economy and State-owned enterprises, promote reform and the simplification of administrative procedures, create synergies among ministries and sectors to enhance the competitiveness of the business environment, and fostering cooperation among domestic and foreign enterprises.

Chairman of the the Vietnam Chamber of Commerce and Industry Vu Tien Loc suggested that the Government focus on implementing an action programme, which needs to meet at least three basic requirements related to the building of policies and laws, the outline of specific plans for the implementation, and the support for parties that affected by the agreement. 

According to Loc, the action programme must develop all possible scenarios to take the initiative in fulfilling CPTPP commitments and, at the same time, consult stakeholders to assess the impact of each scenario and what Vietnam will lose if it fails to meet said commitments.

The programme should take into account plans for each stage of CPTPP enforcement, keeping in mind not only compliance with the pact, but also maintaining attainable goals for the economy and business community, the official noted.

He added further that it should also include actions to support businesses affected by the CPTPP, particularly micro-, small- and medium-sized enterprises, as well as those vulnerable in rural and agricultural sectors. If these businesses are not beneficial, the enforcement of the deal could be a failure, he said.

Enterprises are advised to actively explore more information about the trade pact to fully comprehend Vietnam’s commitments and partner markets, especially those related to tariff preferences for Vietnam’s main commodities and possible export items. 

They should be active in seeking cooperation opportunities with foreign partners to attract more investment into Vietnam, as well as in joining regional and global supply chains.

VNA