Firms urged to carefully prepare for CPTPP

March 22, 2019 - 09:30

The country is facing fierce competition, even in the domestic market. Businesses therefore need to better exploit the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Tra fish is processed by the Southern Fishery Industries Company Limited in the southern city of Cần Thơ. Fishery and marine products, along with other key exports such as wood, electronics and textile and garment products, will be exempt from tariffs either immediately or in three to five years because Việt Nam is one of the 11 member countries of the CPTPP trade pact. — VNA/VNS Photo Vũ Sinh
Viet Nam News

CẦN THƠ — The country is facing fierce competition, even in the domestic market. Businesses therefore need to better exploit the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Minister of Industry and Trade Trần Tuấn Anh made the statement at a conference on the CPTPP and market development held in the southern city of Cần Thơ on Thursday.

Anh said the active participation, negotiation and signing of the CPTPP showed the unified policy of the 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.

The minister 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 to expand.

Lương Hoàng Thái, director of the ministry’s Multilateral Trade Policy Department said CPTPP members committed to remove 78 to 95 per cent 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,” Thái 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.

Phạm Tuấn Anh, deputy director of MoIT’s Department of Industry said the industrial sector continued to play an important role in Việt Nam’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 Việt Nam 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 per cent 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 per cent 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 Việt Nam. 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.

Vũ Đức Giang, chairman of Việt Nam 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 people from agencies, associations and businesses in 19 southern localities, aimed to resolve difficulties when joining the CPTPP and other FTAs. — VNS