80TH Anniversary August Revolution and National Day
Log in
Business

CPTPP pressurizes Vietnam to speed up institutional reforms

Whether Vietnam could take advantage of the CPTPP would depend on the country’s institutional capabilities and local enterprises' adaptability.

The Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) that has a clear timeline for signatories to realize their commitments would help speed up institutional reforms in Vietnam, according to Nguyen Thi Thu Trang, director of the WTO Center and Integration under the Vietnam Chamber of Commerce and Industry (VCCI).

 Overview of the workshop. Source: Ngoc Thuy

“Given the CPTPP’s broad scope ranging from traditional trading activities to environmental norms and sustainable development, the deal is considered to set standards and direction for a number of institutional reforms in Vietnam,” Trang said at a conference under the program “Australia supports Vietnam’s economic reform” (Aus4Reform) on February 19, discussing the agreement's role in Vietnam’s economic integration roadmap.

“This is clear that whether Vietnam could take advantage of the CPTPP would depend on the country’s institutional capabilities and local enterprises' adaptability,” said Tran Thi Hong Minh, director of the Central Institute for Economic Management (CIEM).

Nguyen Anh Duong, head of CIEM’s Macroeconomic Policy Department, noted the foreign direct investment (FDI) inflow to Vietnam has been increasing steadily in the 2010 – 2019 period, expanding at annual growth rates of 12.4% in number of projects, 5.1% in registered capital and 7.4% in disbursement rate.

Notably, actual FDI amount reached its peak at US$20.4 billion in 2019, showing strong belief of investors in Vietnam’s business and investment environment, Duong said. “It reflects the significance of the CPTPP as it helps drive reforms in the country’s business environment.”

However, the majority of FDI inflow is still concentrated on low-value added sectors that use low or mid-level technologies, while there is only a handful number of high quality FDI projects, Duong added.

Meanwhile, Duong said Vietnam’s utilization rate of preferential treatments in CPTPP remains modest as it’s only been a year since the deal became effective, and local enterprises are still adjusting their operations to its requirements.

Specifically, Vietnam’s exports to six member countries stood at US$34.4 billion last year, up 8.3% year-on-year, and imports of US$30.1 billion, up 1%.

Duong added there were expectations that the CPTPP would help Vietnam diversify its export markets, but in reality, this should be seen as a “long-term goal” and “depends on Vietnam’s effort to restructure its trading activities with partners.”

Regarding the economic impacts of the CPTPP for Vietnam, Trang from the WTO Center and Integration said the institutional impacts at present may outweigh the economic ones, but as commitments in the CPTPP is very similar to those in the EU – Vietnam Free Trade Agreement (EVFTA), a combined economic impacts from these two deals would not only be a major boost, but also motivation for the country to continue its reform process.

Trang said as the EVFTA is scheduled to become effective in the first half of 2020, this would “bring extra motivation for Vietnamese enterprises to step  up their preparation processes to grasp opportunities from both CPTPP and EVFTA.”

In addition to Vietnam, the CPTPP comprises Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Singapore, New Zealand and Peru. President Donald Trump withdrew the US from the pact in January 2017 days after his inauguration.

The 11-nation deal economies represent around 13% of global economic output, including the world's third largest economy Japan, and embraces 500 million people. It provides tariff and non-tariff barriers cuts among its members and is designed around high standards on human rights, labor practices, and environmental standards.

Reactions:
Share:
Trending
Most Viewed
Related news
Vietnam secures positive trade balances with CPTPP nations

Vietnam secures positive trade balances with CPTPP nations

22 Aug, 15:25

Positive results from Vietnam’s trade activities with members in the CPTPP indicated Vietnamese companies have better utilized preferential treatments from the deal, relieving pressure for Vietnam in dealing with a decline in exporting farm produce to China.

Vietnam gets US$3.8 billion from fruit and vegetable exports in Jan-Jul 

Vietnam gets US$3.8 billion from fruit and vegetable exports in Jan-Jul 

The exports in the first seven months account for 47% of the whole year's target.

Hanoi expands local access to social policy credit services

Hanoi expands local access to social policy credit services

This policy reflects Hanoi’s commitment to decentralizing credit services and ensuring that social lending remains accessible and responsive to local needs.

Hanoi urged to streamline grassroots credit support

Hanoi urged to streamline grassroots credit support

The municipal women's union fulfils its political goals with efforts to strengthen grassroots engagement and policy outreach.

ASEAN-New Zealand young entrepreneurs meeting to open in central Vietnam

ASEAN-New Zealand young entrepreneurs meeting to open in central Vietnam

The summit is one of several events marking the 50th anniversary of diplomatic relations between Vietnam and New Zealand.

Prime Minister orders strong incentives for repatriation of 100 top tech experts

Prime Minister orders strong incentives for repatriation of 100 top tech experts

The prime minister emphasized the need for concrete deliverables and visible progress, cautioning against empty declarations and inconsistent implementation.

US farm produce showcased in Vietnam, signaling increasing import

US farm produce showcased in Vietnam, signaling increasing import

Culinary activities could help to boost trade and contribute to building a sustainable partnership between the US and Vietnam.

Vietnam to pilot carbon trading floor by late 2025

Vietnam to pilot carbon trading floor by late 2025

Vietnam currently has 150 projects generating 40.2 million carbon credits, many of which have been traded on international markets.

Vietnam sets sights on billion-dollar fruit trade

Vietnam sets sights on billion-dollar fruit trade

Experts have called for technology-driven farming, large-scale cultivation, and deep processing to unlock the industry's full potential.