February 23, 2019 15:36

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Being active to get “sweet fruits” from the CPTPP

08:06 | 06/02/2019

VCN- Concerning taking advantage of the opportunities from the CPTPP Agreement, Mr. Ngo Chung Khanh - Deputy Director of Multilateral Trade Policy Department (under the Ministry of Industry and Trade) affirmed: Vietnamese goods are officially entitled to preferential tax rates from January 14, 2019, and Vietnamese enterprises need to really increase their sense of autonomy in order not to miss any opportunities.

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being active to get sweet fruits from the cptpp
Mr. Ngo Chung Khanh

Can you tell us, what is the level of specific tariff reduction for Vietnam's export goods when CPTPP takes effect?

On average, the first rate of tariff reduction was over 60% and 3 years later is about 80%. Tariff reductions have a roadmap, instead of immediately cutting the entire tariff.

Many opinions said that intellectual property as well as meeting the rules of origin of goods are outstanding challenges for Vietnamese enterprises when implementing CPTPP. What do you think about this?

The content of intellectual property rights in the CPTPP has been reduced compared to the previous Trans-Pacific Strategic Economic Partnership Agreement (TPP), at least more than 10 important obligations have been decreased significantly compared to the TPP. The CPTPP has a number of intellectual property obligations that are higher than the previous Free Trade Agreements (FTAs), but these are the things Vietnam needs to do. The CPTPP has stricter intellectual property regulations but in return, it also protects the legitimate interests of many businesses.

Regarding the origin of goods, this depends on the goods that the CPTPP has separate regulations, for example, cars and auto parts have separate regulations, and are quite complicated. The textile and garment industry has its own regulations and levels. In order to know specific items, we must look at the details of origin to define the conditions an item is required to meet, then take action for compliance and ensure accordingly.

Vietnam has participated in many FTAs and in fact, taking advantage of opportunities from these FTAs by Vietnamese enterprises is still limited. How can we stop this happening with the CPTPP, sir?

About taking advantage of FTAs, Vietnamese enterprises have not fully utilized their potential, primarily because enterprises have not paid attention. Enterprises have not taken the initiative to clearly understand and assess, they do not find out how much a particular product is entitled to preferential tax rates, and how to enjoy such preferential tax rates. With the CPTPP, also, and to take advantage of it, enterprises must increase their activeness. For example, enterprises exporting clothes to Canada, in January, 2019, when the CPTPP takes effect, enterprises must find out whether exported products to Canada market are entitled to preferential tax rates or not. By the current basis and source of imported fabric..., what must businesses do to enjoy such preferential tax rates? Enterprises can contact the negotiating team directly to receive answers. My side is a negotiating delegation but I have hardly received any questions from businesses.

What are the solutions that need to be promoted in the coming time to make the best use of opportunities from CPTPP?

For Vietnam, the most worrying is the implementation problem because time is short. The first thing to do is to urgently propagate, as soon as possible at the local level, so that enterprises are able to take advantage and implement as soon as the agreement takes effect. The second is to quickly build focal points to execute. By joining the World Trade Organization (WTO), Vietnam has experienced this. For example, building focal points at both central and local levels to connect with each other, so that businesses know where to ask about the CPTPP. In addition, in the coming time, the review of legal documents, lots of details need to be done...

Thank you Sir!

According to the Government Interpretation Report on the CPTPP Agreement, with the CPTPP, in addition to the open opportunities, when participating in the CPTPP Agreement, Vietnam will also face 6 challenges.

First, economic challenges. Regarding trade in goods, because Vietnam has FTA with 7 of 10 member countries of the CPTPP Agreement, the pressure of competition from an open market only comes from Canada, Mexico and Peru.

Secondly, the challenge of improving the legal and institutional framework. In order to enforce commitments in the CPTPP, Vietnam will have to supplement and amend some legal provisions on trade, customs, intellectual property, labor...

Thirdly, social challenges. Increasing competition when participating in the CPTPP can make some enterprises fall into difficulties, leading to the possibility of unemployment in a part of labor will occur.

Fourthly, the challenge of budget revenue. The reduction of import duty under the commitment will reduce the budget revenue, however, there will be no sudden impact due to the fact that there are 7 of 10 countries that have FTA with Vietnam in the CPTPP; only 3 countries, Canada, Mexico and Peru, do not have an FTA with Vietnam but the trade is still modest.

Fifthly, challenges in the field of labor. The challenge is related to the revision of the law on the right to establish the organization of employees at the enterprise, and the management of the State is to ensure that the activities of these organizations are complying with Vietnamese law and with the principle of "complying with the laws of the host country" mentioned in the World Labor Organization's 87 Convention, while maintaining political and social stability.

Sixthly, challenges in the field of information security and safety. Vietnam signed a bilateral letter with CPTPP members about the Freedom of Information and Obligation to place a server in the host country in 2 articles under the E-Commerce Chapter. This bilateral letter is valid for limiting the possibility of Vietnam being sued within 5 years since the Agreement comes into force.

Minister of Agriculture and Rural Development Nguyen Xuan Cuong: the CPTPP and new generation FTAs provide export opportunities for agriculture

First of all, we must affirm that FTAs, typically the CPTPP, provide an opportunity to expand the market for export of agricultural products with advantages for Vietnam such as with: Fisheries, forest products, furniture, vegetables and fruits, and other agricultural products (rice, coffee, rubber...). For the livestock sector, Vietnam has exported processed chicken products to Japan. If there are appropriate measures, boosting the application of science and technology, selecting special products, Vietnam can compete, even export to difficult markets such as the EU and the United States. However, it is possible to predict some of the major challenges for Vietnam's agricultural exports: Participating countries can reduce tax rates but raise non-tariff barriers and have tighter control; livestock products will be more competitive; quality, cost of agricultural, forestry and fishery products will be the next competitive factors. Challenges from markets also require Vietnam to grasp the needs and tastes of consumers, for which producing suitable agricultural products, especially to ensure factors such as pricing, food safety, clean agricultural products, organic production...

Ms. Phan Thi Thanh Xuan, Secretary General of Vietnam Leather and Footwear Association - To take advantage of opportunities from CPTPP, the State needs to review infrastructure.

The leather and footwear industry mainly processes for export, but due to customers often having to actively seek businesses, the reality is that the initiative of small and medium enterprises is very limited. Besides, the enterprises’ vision and strategy development is still a weakness. Therefore, the task is to help businesses access information in a formal way. Also, the State needs to review infrastructure and logistics when exporting, because when the market share expands, the infrastructure cannot meet requirements, we will not be able to reap the rewards.

Mr. Phan Van Truong - Director of GOC Food Processing Joint Stock Company: Penetrating the EU market is a way to open to other markets

The EU is the world market leader in standards. Enterprises want to export, but along with meeting the quality standards, they must also meet high standards of environmental protection, energy saving, social security... The biggest thing when exporting goods to the market is not a profit, but a management system and a reputation of enterprises. If the EU market’s standards are met, other markets will look at it to connect with businesses. Typically, the US, Japan and South Korea markets... look at the EU market standards to import goods.

Currently, Vietnam's agricultural products exported to the EU are being taxed at 14%. In the coming time, with EVFTA, the tax rate of 0% will be a great opportunity for exporting agricultural products to the EU. In order to meet EU requirements, it is important that the material production area of Vietnam must be safe. To achieve that, businesses and localities have to build their own material areas as well as apply international standards. At the same time, businesses also need to build a team of managers who are compatible and responsive to the management system of the EU market.

By Duc Quang

By Uyen Nhu/ Kieu Oanh