Vietnam is likely to face both opportunities and challenges whenjoining the Regional Comprehensive Economic Partnership (RCEP) with thescale tipped towards gains rather than losses, economists have said.
Negotiations on the RCEP commenced in 2012. The dealaims to reach a comprehensive economic partnership between theAssociation of Southeast Asian Nations (ASEAN) and six regional freetrade agreement (FTA) partners, namely China, Japan, the Republic ofKorea (RoK), Australia, New Zealand and India.
TheRCEP region has a population of 3.4 billion, a combined GDP of 21trillion USD, and trade accounting for 29 percent of the global figure.
Six rounds of RCEP talks were organised and negotiations are expected to conclude later this year.
As the agreement gathers a number of Vietnam’s major economic partnerslike China, Japan, Australia and ASEAN, it promises strong growth intrade between the country and these key export markets.
The pact will also bring about an inflow of foreign direct investment(FDI) which in turn will result in positive impacts such as transfers oftechnology and business and management skills that Vietnam needs.
The implementation of commitments stated in the RCEP will also helpVietnam create a competitive and transparent investment climate andparticipate in regional value and production chains.
Nguyen Anh Duong, Deputy Director of the Macro-economic PoliciesDepartment under the Central Institute for Economic Management (CIEM),said the deal will help Vietnam access investment from and markets ofASEAN and partners.
He elaborated that once it takeseffect, Vietnam will have a chance to import goods at lower prices,especially material for manufacturing such as steel from China andplastics from the RoK and Japan, along with advanced machinery.
The pact will also help cut down expenses and create a friendlierbusiness environment thanks to harmonised regulations, he added.
CIEM researcher Dinh Thu Hang considered some sectors such as aquaticproduction, agriculture and construction to be the biggest beneficiariesof the RCEP while the liberalisation of services in the region willbeef up trade in services and FDI in Vietnam.
Vietnam could export its distribution and hospitality services to RCEPmembers, especially Japan, ASEAN nations and Australia. Efforts tofacilitate trade and development cooperation could also further reducethe expenses of service connectivity and goods trade, she said.
In a recent report, ANZ bank said Vietnam and Thailand will profit themost from the RCEP as the former’s GDP growth rate could reachapproximately 8 percent and the latter’s figure could hit 13 percent infive years after the deal’s signing. FDI within RCEP members is expectedto account for 85 percent of the global figure, critical to theVietnamese economy.
Meanwhile, some challengesVietnam could face once the deal takes effect include the vulnerabilityto supply and demand fluctuations as the majority of its trade isfocused on only few large partners and several key products, accordingto Nguyen Anh Duong.
Although Vietnam’s tradestructure is similar to that of other RCEP members, the quality andamount of added value in its goods are still low, posing a greatcompetition challenge to Vietnamese products. For example, the countrywill have to compete with China in exporting apparel, footwear and riceto Japan and the RoK.
Vietnam will also encounterstrong rivals from RCEP countries in terms of banking services whichhave matured in Singapore, Japan, the RoK and Australia, economistssaid.-VNA
Negotiations on the RCEP commenced in 2012. The dealaims to reach a comprehensive economic partnership between theAssociation of Southeast Asian Nations (ASEAN) and six regional freetrade agreement (FTA) partners, namely China, Japan, the Republic ofKorea (RoK), Australia, New Zealand and India.
TheRCEP region has a population of 3.4 billion, a combined GDP of 21trillion USD, and trade accounting for 29 percent of the global figure.
Six rounds of RCEP talks were organised and negotiations are expected to conclude later this year.
As the agreement gathers a number of Vietnam’s major economic partnerslike China, Japan, Australia and ASEAN, it promises strong growth intrade between the country and these key export markets.
The pact will also bring about an inflow of foreign direct investment(FDI) which in turn will result in positive impacts such as transfers oftechnology and business and management skills that Vietnam needs.
The implementation of commitments stated in the RCEP will also helpVietnam create a competitive and transparent investment climate andparticipate in regional value and production chains.
Nguyen Anh Duong, Deputy Director of the Macro-economic PoliciesDepartment under the Central Institute for Economic Management (CIEM),said the deal will help Vietnam access investment from and markets ofASEAN and partners.
He elaborated that once it takeseffect, Vietnam will have a chance to import goods at lower prices,especially material for manufacturing such as steel from China andplastics from the RoK and Japan, along with advanced machinery.
The pact will also help cut down expenses and create a friendlierbusiness environment thanks to harmonised regulations, he added.
CIEM researcher Dinh Thu Hang considered some sectors such as aquaticproduction, agriculture and construction to be the biggest beneficiariesof the RCEP while the liberalisation of services in the region willbeef up trade in services and FDI in Vietnam.
Vietnam could export its distribution and hospitality services to RCEPmembers, especially Japan, ASEAN nations and Australia. Efforts tofacilitate trade and development cooperation could also further reducethe expenses of service connectivity and goods trade, she said.
In a recent report, ANZ bank said Vietnam and Thailand will profit themost from the RCEP as the former’s GDP growth rate could reachapproximately 8 percent and the latter’s figure could hit 13 percent infive years after the deal’s signing. FDI within RCEP members is expectedto account for 85 percent of the global figure, critical to theVietnamese economy.
Meanwhile, some challengesVietnam could face once the deal takes effect include the vulnerabilityto supply and demand fluctuations as the majority of its trade isfocused on only few large partners and several key products, accordingto Nguyen Anh Duong.
Although Vietnam’s tradestructure is similar to that of other RCEP members, the quality andamount of added value in its goods are still low, posing a greatcompetition challenge to Vietnamese products. For example, the countrywill have to compete with China in exporting apparel, footwear and riceto Japan and the RoK.
Vietnam will also encounterstrong rivals from RCEP countries in terms of banking services whichhave matured in Singapore, Japan, the RoK and Australia, economistssaid.-VNA
