Local firms need to improve their product quality and design, in addition to strengthening trade promotion activities, in order to increase their competitiveness in the Regional Comprehensive Economic Partnership (RCEP) market, according to industry insiders.
As of January 1, Vietnam has officially taken on the role of ASEAN Chair 2020. With the new position, the country has set out a number of priorities, including the facilitation of the signing of the RCEP.
The RCEP is expected to be signed in February between the 10 ASEAN member states and six partners, although India has a number of issues which it is currently attempting to resolve.
Despite the absence of India from the trade pact, RCEP will serve to create the world’s largest free trade area with approximately 3.5 billion people, making up 30 per cent of global GDP.
The trade deal will also help unify six separate bilateral free trade agreements (FTAs) between ASEAN and each nation of the remaining six RCEP partners.
Moreover, once in effect, the RCEP is expected to create additional opportunities for market expansion for the country’s manufacturing industry.
Despite this, a number of domestic enterprises are concerned that partners among RCEP members have similar products to the ones produced in Vietnam, in addition to being more competitive.
Assoc. Prof. Dr. Dang Hoang Linh, Head of Economics Department under the Diplomatic Academy of Vietnam, pointed out that locals items such as agricultural products, processed goods, and garments enjoy competitive advantage over those that come from other regional nations such as China and Thailand.
Elsewhere, the country is forecast to face stiff competition from regional rivals in sectors such as human resources, finance, banking, and telecoms, according to Assoc. Prof. Dr Linh.
Experts have advised Vietnamese businesses to stay proactive in gaining insights into the agreement’s specific content that relates to their respective industry and strive to improve product quality as a means of enhancing their competitiveness in the RCEP market.