Illustrative image (Photo: VNA) Ngo Chung Khanh, Deputy Director of the Multilateral Trade PolicyDepartment under the Ministry of Industry and Trade (MoIT), said Vietnamesebusinesses have been increasingly interested in taking advantage of the tradeagreement, the largest of its kind signed by the Southeast Asian country inrecent years.
According to a survey conducted by the Vietnam Chamber of Commerceand Industry (VCCI), 9% of businesses now said they possess a "deep understanding"of CPTPP, a significant improvement from just over 2% from two years ago.
During the same period, the country's export turnover to CPTPPmarkets improved significantly, notably to Canada and Mexico. Last year, Vietnamreported a trade surplus of more than 8 billion USD with the twomentioned-above countries alone. It has reflected a growing interest amongVietnamese exporters in CPTPP markets.
However, Canada and Mexico could be considered small tomedium-sized markets. While growth has been impressive, they only accounted forjust under 3% of Vietnam's total trade with the bloc.
Another issue, according to Khanh, was even traditionally strongVietnamese export products still struggled to penetrate CPTPP markets.
Nguyen Xuan Duong, Chairman of Hung Yen Garment Corporation(HUGACO), said that major hurdles for Vietnamese textile manufacturers includeddifficulties in meeting CPTPP's product origin protocols, inadequate investmentin expanding production and technology.
Duong said the country still relied heavily on raw material importfrom China (43-45%) and has not been able to clear CPTPP's requirements onproduct origin, a prerequisite for tariff reduction. He added the underlyingissue was a lack of capital investment and industrial infrastructure, whichcould be attributed to not having enough large consumer markets.
Even those who managed to secure the required investment to expandtheir operations could not bring production to full throttle. Many said theycould only produce at 30-40% of their designed capacity.
Another key issue was CPTPP's high environmental standards, whichhave proven difficult and costly for Vietnamese businesses to overcome.
9% of businesses now said they possess a "deep understanding" of CPTPP, a significant improvement from just over 2% from two years ago. (Photo: VNA) "Production is only a part of the equation. What good isprofit if our natural resources and living habitat continue to bedegraded," Thi said.
"In the long run, it is not sustainable. Input costs willeventually increase as resources dwindle while demand falls as human well-beingsuffers," Thi said.
He urged businesses to seek out sustainable technologies actively,saying it's no longer an option as consumers in developed markets have becomehighly conscious of environmental issues, which translates into politicalpressure to revamp the production model.
Do Thi Thu Huong, Deputy Director of the MoIT's Foreign TradeAgency, said Vietnamese businesses have been able to capitalise on the tradeagreement's available tariff advantages, especially Canada, Mexico and Peru,which had not signed free trade agreements with Vietnam before CPTPP.
In Vietnam-Canada trade alone, since the implementation of CPTPP,Vietnamese businesses reported they could benefit from 24% of the availabletariff advantages./.
VNA
