|Ha Bac Export Garment Joint Stock Company in Bac Giang Province exports garments to the US market. — VNA/VNS Photo Tran Viet
HCM CITY (VNS) — Viet Nam would gain substantially from the Regional Comprehensive Economic Partnership (RCEP), which is still under negotiation, a workshop heard in HCM City yesterday.
Pham Binh An, director of the HCM City WTO Affairs Consultation Centre, said that 10 ASEAN countries and six countries with which ASEAN has existing free trade agreements (Japan, Korea, Australia, New Zealand, India and China) were negotiating the content of the RCEP, which may be finalised by the end of this year.
RCEP would create the world's largest trading bloc, he said.
It would be a comprehensive, high-quality economic cooperation model and would remove barriers to establish a favourable environment for investment and trade activities in the region, he said.
Unlike the Trans Pacific Partnership (TPP), RCEP focuses primarily on trade, including trade in goods, and trade in services and investment. TPP also includes provisions on public purchases and intellectual property, for example.
The RCEP targets creating a broad and deep engagement with significant improvements over the existing ASEAN+1 FTAs. It also seeks to achieve a modern and comprehensive trade agreement among members.
An said that more trade barriers would fall, helping Viet Nam, which has a rather large trade deficit with this region.
Dinh Thu Hang from the Central Institute for Economic Management (CIEM) said, like other FTAs, RCEP would open new opportunities for Viet Nam to expand export markets via tariff reductions, import input materials, and machinery and equipment at cheaper costs.
Vietnamese firms would be able to participate in the region's value and production chains and exchange technical expertise with other countries.
However, competitive pressure from countries that have similar export structures to Viet Nam will pose challenges to companies, as Viet Nam still mainly exports raw products at a low processing rate.
An increase in non-trade barriers with partner countries had caused difficulties for local exporters, she said.
Vo Tri Thanh, deputy director of the CIEM, said overall, the country would enjoy more benefits than losses, noting that the level of benefits also depend on commitments under the free trade agreement.
As the FTA is still under negotiation, there is still no information about how the 16 parties of RCEP would open their markets.
He suggested that businesses kept up to date about FTAs so they could capitalise on new opportunities and prepare to cope with challenges.
They should also understand the mechanisms for solving trade disputes to protect their legitimate interests.
Firms must focus on improving competitiveness of their products and be more active in taking part in the region's value chain.
The workshop was organised by the HCM City WTO Affairs Consultation Centre, in collaboration with the EU-MUTRAP project and the Central Institute for Economic Management. — VNS