CPTPP – great expectation for enterprises

Monday, 2018-11-12 16:52:24
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CPTPP will bring a great opportunity for seafood export.
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NDO – In addition to impacts from tariff reductions, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is expected to promote the improvement of institutions and the business environment for Vietnamese enterprises.

Strong improvement of institutional environment

Vietnam’s participation in the integration ‘playground’ in a deeper and wider manner has promoted the improvement of institutions, investment and the business environment in favour of enterprises.

Deputy Minister of Industry and Trade, Tran Quoc Khanh, said that, after 20 years of negotiating free trade agreements (FTA), Vietnam has learnt several lessons and experience both in businesses and State management. Accordingly, it is crucial to create a clear and comfortable business environment in order to implement the signed international commitments and agreements as well as to help enterprises develop, improve their capacity and seize the opportunities.

In recent years, the Government has changed its management philosophy, focusing on creating a transparent and fair competitive environment. In pursuit of the Government's policy while seizing new generation FTAs, especially CPTPP, the Ministry of Industry and Trade has proactively reviewed, abolished and simplified many business conditions.

The Minister of Industry and Trade, Tran Tuan Anh, has signed a decision to abolish, simplify and rationalise an additional 202 business conditions. So far, the Ministry has cut, simplified and streamlined over 72% of conditions under its management.

In addition, with the shift in management rational, the Ministry expects that in the future, if the National Assembly requires more business conditions for certain sectors, the conditions will be simple enough to ensure State management, as well as a clear, transparent and fair environment for enterprises.

Expectations for enterprises

In addition to benefits from the improvement of institutions and the business environment, the tariff cuts under the CPTPP would reduce the products’ cost, which is expected to provide competitive advantages to enterprises.

According to Chairman of the Vietnam Chamber of Commerce and Industry, Vu Tien Loc, the CPTPP provides an opportunity for Vietnamese firms to expand their investment and trade with three new potential markets in America, as well as further deepen their resonant relations with seven other markets, including important strategic partners. Therefore, the CPTPP will help enterprises to increase their profits, create more jobs for Vietnamese people and promote the country’s economic growth.

General Secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP), Truong Dinh Hoe, said that the CPTPP is a new generation agreement bringing additional opportunities for seafood enterprises to expand their markets and reorganise their production activities to meet the high standards of the other member countries.

Regarding textile and garments, Vice President of the Vietnam Textile and Apparel Association (VITAS), Pham Xuan Hong, noted that the CPTPP would create favourable conditions for the sector to export products to member markets and make an impact on the development of the supporting industry in Vietnam thanks to tighter requirements of the origins of raw materials and products.

Vietnam’s textile and garment sector is expected to reach an export turnover of US$34 billion and the sector’s exports are guaranteed to make a breakthrough from 2018 onward.

However, according to many businesses, joining the CPTPP also poses challenges in socio-economic development, budget revenues and perfecting the legal framework and institution. Notably, the opening of economic activities accompanied with regulations of labour, transparency and anti-corruption requires taking the initiative and exerting efforts in renewing and improving the laws from Vietnam.

After the CPTPP is adopted and takes effect, the agencies concerned should inform people and enterprises of the agreement’s contents. The Government should have a response scenario to take advantage of the opportunities as well as cope with the challenges and disadvantages.

Vice Chairman of the Ho Chi Minh City Union of Business Associations, Pham Ngoc Hung, noted that businesses need to make preparations and efforts to utilise the advantages and overcome difficulties. Meanwhile, the Government should conduct a thorough review to improve the business environment in order to support enterprises. Particularly, the associations in all sectors should enhance the links and the self-reliance of raw materials, contributing to increasing export values.

According to the Ministry of Planning and Investment, the CPTPP can help Vietnam raise its GDP and export turnover by 1.32% and 4.04%, respectively, by 2035. Total import turnover may also increase by 3.8% but it is lower than export growth, so the overall impact on the trade balance is favourable.