Illustrative image (Source: VNA)

Can Tho (VNA) - The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is expected to help Vietnam continue speeding up its reforms in order to tap opportunities and deal with challenges from the deal.

Minister of Industry and Trade Tran Tuan Anh made the statement at a conference on the CPTPP and market development held in the Mekong Delta city of Can Tho on March 21.

According to Anh, an official study of the Ministry of Industry and Trade showed that economically, the CPTPP can help Vietnam’s GDP and export expand by 1.32 percent and 4.04 percent by 2035, respectively.

Socially, the trade pact can help increase total job opportunities in Vietnam by 20,000-26,000 per year. The World Bank forecast the agreement to help Vietnam reduce 600,000 poor people by 2030.

In addition, cutting down non-tariff barriers to trade and investment in all CPTPP members will help ease business costs and risks in Vietnam and increase opportunities for enterprises to expand markets and diversify investment resources.

Minister Anh said the active participation, negotiation and signing of the CPTPP showed the unified policy of the Vietnamese Party and Government in international economic integration.

“The ministry has implemented solutions to expand markets, promote exports, strengthen import control and limit its trade deficit. It is formulating and submitting to the Prime Minister a scheme on handling international trade disputes, promoting implementation of key projects, and increasing the industry’s production capacity to contribute to economic growth,” he said.

He said verifying the origin of products is a basic requirement when exporting to foreign markets. The import markets have the right to select businesses and grant import permits. Management agencies need to improve the law to meet market demand. Meanwhile, enterprises need to accompany the State management agencies to orient the market and actively participate in expanding.

Luong Hoang Thai, Director of the ministry’s Multilateral Trade Policy Department said CPTPP members committed to remove 78 to 95 percent of import taxes as soon as the agreement took effect. Many key exports such as agricultural products, seafood, shoes, garment and textiles, wooden products, electronics and rubber would enjoy zero tax immediately or three to five years later. “However, fierce competition requires careful preparation from local businesses when joining the CPTPP,” Thai said.

To improve competitiveness of small and medium-sized enterprises (SMEs), he said that the Government needs to provide adequate information to SMEs, creating an equal business environment, satellite businesses and new regional supply chains.

Pham Tuan Anh, Deputy Director of the MoIT’s Department of Industry said the industrial sector continued to play an important role in Vietnam’s socio-economic development with key export products.

This result was partly thanks to opportunities from signed bilateral and multilateral free trade agreements (FTAs), contribute to market expansion, increase investment to expand domestic production, and boost export growth.

"Participating in the CPTPP helps Vietnam multilateralise economic and trade relations, avoiding risks due to dependence on some big markets,” he said.

The CPTPP would create opportunities for enterprises to export timber and wood-based products to boost exports when products such as plywood, picture frames, door frames and especially furniture which are subject to import duties of between 6 and 9.5 percent will be removed immediately.

With the textile and garment industry, the export tax rate on textiles and garments to markets that do not yet have a common FTA is currently above 10 percent on average. When the CPTPP took effect, Vietnamese garment and textile products which meet with common technical standards would enjoy a zero tax rate. The sector would be strengthened with competitive advantages in price. It is also a motivation for domestic and foreign investors to invest in developing raw materials and support industries in Vietnam. It would establish links in the garment and textile chain more effectively, creating a foundation for the industry to develop sustainably.

However, the CPTPP also poses many challenges, requiring Vietnamese enterprises to have thorough preparation as well as long-term strategies to improve competitiveness in the international arena.

Vu Duc Giang, Chairman of the Vietnam Textile and Apparel Association (VITAS), said there are both opportunities and challenges for the industry.

“In the industrial development programmes, attention should be paid to creating uniformity in investment and planning of enterprises in the industry into industrial parks to ensure environmental issues and labour safety standards as well as focusing on sustainable development, as these are requirements when bringing goods into the CPTPP market area,” Giang said.

The conference, with the participation of more than 300 delegates from agencies, associations and businesses in 19 southern localities, aimed to resolve difficulties when joining the CPTPP and other FTAs.-VNA