October 18, 2019 07:00

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RCEP brings both opportunities and challenges

16:45 | 25/05/2019

The Regional Comprehensive Economic Partnership (RCEP), a proposed free trade agreement (FTA) between ASEAN and six states that have signed individual FTAs with the bloc, will bring both opportunities and challenges for local enterprises when it takes effect, heard attendees at a seminar held on May 23.

rcep brings both opportunities and challenges

An employee at work at a textile company. RCEP will bring both opportunities and challenges for Vietnamese enterprises - PHOTO: THANH HOA

At the seminar on RCEP, Nguyen Thi Thu Trang, director of the World Trade Organization Center, under the Vietnam Chamber of Commerce and Industry, said that enterprises can easily meet requirements on goods traceability and enjoy preferential import tariffs in other RCEP member countries as these markets have high demand for products in which Vietnam has strengths. The six countries mentioned above are Australia, China, India, Japan, the Republic of Korea and New Zealand.

In addition, the RCEP is not considered a new-generation FTA like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the European Union-Vietnam Free Trade Agreement (EVFTA). Therefore, its members’ requirements on imports are not as strict as those of the CPTPP and EVFTA and most Vietnamese enterprises can meet these requirements.

Pham Tuan Anh, deputy head of the International Cooperation Department under the Ministry of Finance, said that markets for several services such as logistics and telecommunications will open up for local firms. They will also have more opportunities amid the increase in trade remedies in importing markets and trade tensions between the United States and China.

Nevertheless, the competition among members of the RCEP will be fierce as their product and service quality and standards are generally equal, Trang said, noting that Vietnamese enterprises may have to compete with Chinese rivals to export textiles and garments, footwear and seafood to Japan. Therefore, domestic firms should improve their product and service quality, Trang advised.

RCEP member states account for nearly half the world’s population, 30% of the gross domestic product and 28% of the trade value.

RCEP negotiations started in early 2013 and are expected to conclude this year. Once completed, the pact will create a large free trade region covering Vietnam’s major trade partners, such as China, Japan and the Republic of Korea.

Source: Saigon Times