January 24, 2020 16:37

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Exports prosper thanks to CPTPP

12:18 | 11/04/2019

VCN-The Comprehensive and Progressive Agreement for Trans-Pacific Partnership(CPTPP) officially came into force in Vietnam from January 14, 2019. After more than two months, the CPTPP has already brought remarkable prosperity to the export of Vietnamese goods.

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The chance to promote the export of merchandise in the CPTPP is still very large. Photo: Huy Kham

Exports increased significantly with CPTPP member countries

According to statistics from the General Department of Customs, the total trade turnover between Vietnam and other CPTPP countries reached more than US$74 billion in 2018, as part of the total import and export turnover in 2018 of US$480.17 billion.

In the first two months of 2019 alone, especially since the CPTPP took effect, Mr. Ngo Chung Khanh, Deputy Director of the Multilateral Trade Policy Department (Ministry of Industry and Trade), said: “Export turnover between Vietnam and CPTPP countries has seen significant growth compared to the same period last year.

Specifically, in the first two months of 2018, if the exports fromVietnam to Japan was US$2.6 billion, it was US$2.9 billion in the same period this year. For Canada, in the first two months of 2018,the exports reachedUS$370.8 million, the figure reached US$506.8 million in the same period this year. Similarly, for Singapore and Mexico, the export volume in the first two months of 2018 was US$449 million and US$289 million, respectively. In the first two months of 2019, this figure was US$486 million and US$321 million, respectively.

Notably, in the first two months of this year, there were 269 Certificates of Origin (CO) under the CPTPP issued. This included 219 COs issued to Canada; 14 COsto Mexico and 8 COs to Peru.

“Thus, a total of three potential markets (including Canada, Mexico and Peru) have accounted for about 90% of the COs that Vietnam granted to CPTPP countries.This shows that Vietnamese enterprises have also realized the opportunities from the CPTPP agreement, especially for potential markets where Vietnam has not signed free trade agreements (FTAs),” Mr. Khanh stressed.

Mr. Khanhsaid: “For the CPTPP, in the short term, Vietnam will target some markets without FTAs. In the medium and long term, when the CPTPP agreement is further expanded, it may be possible for the UK or some other countries to participate in the CPTPP, and the benefit of the CPTPP for Vietnam will increase.”

Many challenges

In addition to the initial results achieved in taking advantage of opportunities from the CPTPP, the Ministry of Industry and Trade stated there are still many challenges to overcome. In terms of economy, competitive pressure is the first issue for the Vietnamese economy and enterprises. However, competition is the driving force for businesses to constantly innovate and create more choices for consumers. In addition, pledges of many comprehensive areas of the CPTPP also require institutional reform and adjustment of relevant domestic regulations in accordance with international commitments.

According to Mr. Ngo Chung Khanh, on January 24, the Government issued a Plan for the Implementation of CPTPP with the aim of ensuring that the agreements are fully and consistently implemented among the governing bodies and State management at central and local levels. The Prime Minister assigned the Ministry of Industry and Trade to assume the prime responsibility and coordinate with the Government Office to monitor and urge the ministries, branches, localities and organizations representing businesses to implement the deal.

By the end of April 3, the Ministry of Industry and Trade received reports from 13 ministries, central agencies and 35 local agencies. The ministries, branches and localities all formulate the agency's plans under 5 main domains based on the Government's implementation plan. In particular, the plan focuses on propaganda on CPTPP Agreement in many different forms; review and amend the current legal documents to ensure compliance with the provisions of the CPTPP Agreement; implement programs to support and improve competitiveness, develop policies and mechanisms to support businesses in the fields and areas under management.

In the future, in order to promote the implementation of the CPTPP, the Ministry of Industry and Trade determined to promote research and compilation of publications, detailed guidelines and manuals on some contents and important commitments of the CPTPP to disseminate interest to businesses and business associations.

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"In addition, the Ministry of Industry and Trade will chair and coordinate with the World Bank and the Australian Embassy in Vietnam to build a Portal on FTAs, with the focus on CPTPP to provide enterprises and people with a smart and effective search tool to make the most of opportunities from the CPTPP Agreement on each item and each specific service sector,” Mr. Khanh said.

With a population of 499 million people, accounting for 13.5% of global GDP and 14.4% of the commercial scale of the world, the CPTPP Agreement will create positive effects in promoting export turnover, when countries impose import duties of 0% for Vietnamese goods. Accordingly, when exporting goods to markets of member countries of the CPTPP, Vietnamese enterprises will be entitled to very preferential tariff reductions. For the three of ten countries with whom Vietnam does not have FTAs – Canada, Peru and Mexico – the benefits of market access, including goods and services are very significant.

With the above-mentioned level of market opening commitment, according to the official study of the Ministry of Planning and Investment, Vietnam's exports may increase by 4.04% by 2035. At the same time, by 2030, Vietnam's exports to CPTPP countries will increase from US$54 billion to US$80 billion, accounting for 25% of Vietnam's total exports

By Thanh Nguyen/ KieuOanh