Welcome the EVFTA, do not neglect the CPTPP

VCN –The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) has been in force for Vietnam for 1.5 years, but the utilization efficiency has not been as expected. To avoid wasting opportunities from this FTA, along with the change of propaganda and support of State management agencies, the business community must improve its initiative and really participate.

welcome the evfta do not neglect the cptpp
Businesses need to increase their activeness to make good use of opportunities from new generation FTAs.Photo: Nguyen Thanh

Localities and businesses indifferent

According to the Ministry of Industry and Trade, in the first half of this year, Vietnam’s exports to ASEAN fell by 14% compared to the same period of 2019; exports to the EU decreased by 8.8%; and exports to Japan decreased by 2.3%, while exports to Vietnam’s two main markets, China and the US, had good growth. Exports to China reached US$19.5 billion, up 17.4%; and to the US reached $30.3 billion, up 10.3% over the same period last year. Notably, exports to the CPTPP member countries’ markets had positive growth, such as exports to Australia increased by 2.3%; to Chile increased by 1.6%; and Mexico increased by 2.6%.

Ngo Chung Khanh, Deputy Director of the Multilateral Trade Policy Department (Ministry of Industry and Trade) said by the end of this year, the Ministry of Industry and Trade would report to the Government on the results of two years of CPTPP implementation (the agreement took effect on January 14, 2019).Previously, the Ministry of Industry and Trade had sent a report to the Government on the CPTPP implementation results after one year. “In terms of export, the CPTPP has brought quite good figures, especially the trade surplus. Only the two markets that Vietnam has not had FTA are Canada and Mexico, the trade surplus in the first year of implementation was more than $5 billion, accounting for more than 50% of the country’s trade surplus in 2019.In general, investment attraction decreased, but investment from Canada and Mexico markets recorded a sharp increase. Thus, for markets where Vietnam has not had an FTA yet, the interest is quite high with huge opportunities,” said Khanh.

In addition to the results, the leader of the Multilateral Trade Policy Department also admitted the opportunities and market potential from the CPTPP were great, but in fact, Vietnam had not yet used up all.For example, among 63 provinces and cities, less than 40 unitshave had import and export relations with CTPPP countries. Of which, provinces and cities having import and export relations with Canada and Mexico are only about 10-15 localities. “According to the review of the Vietnam Chamber of Commerce and Industry (VCCI), only 2% of enterprises look into the CPTPP carefully.Meanwhile, the CPTPP is the most complex agreement we have negotiated, some points in the CPTPP are even more complex than in the Vietnam-EU Free Trade Agreement (EVFTA),”said Khanh.

Change to achieve success

The EVFTA is the most expected FTA when it will take effect from August 1. It can be said that, in the past year, the CPTPP has not been mentioned much, somewhat “self-pity” compared to the level and frequency of interest and mention of the EVFTA, Khanh said that even though they welcome the EVFTA, enterprisesshould not neglect the CPTPP.

As to why taking advantage of opportunities from the CPTPP has not been as expected, the leader of the Multilateral Trade Policy Department said one of the key points was propaganda. In 2019, 570 seminars and conferences on the CPTPP were held nationwide. This was a huge number, equivalent to an average of two conferences and seminars per day. However, most of the speeches at the conferences talked about general strategy and content andenterprises did not receive useful information. For example, what enterprises exporting to Canada have to do, who they need to contact to get contracts and which rules and regulations should be paid attention to. The propaganda was boring, leading to superficial interactions between experts, negotiators and enterprises.

According to Khanh, the initiative of the business community is weak and limited. During the past year,there were only about 15-16 questions about the CPTPP sent to the website. When the regulator sent information about the online discussion course on the CPTPP, the response from enterprises was limited.

The Ministry of Industry and Trade assessed in the future, opportunities to increase exports to CPTPP countries would be large. Recently, more than two tonnes of Vietnamese lychees were consumed after just a few hours in supermarket systems in Tokyo and Osaka (Japan) on June 21. The lychee selling price in Japan was from VND180,000-270,000/kg. It is estimated that this year, about 100 tonnes of fresh lychee will be exported to Japan by air and sea. Moreover, on June 22, Son La province celebrated the export ceremony of the first 30 tonnes of mangoes of the year to the US, Canada and Australia through the official quota. While Australian consumers are familiar with Vietnamese mangoes in recent years, this is the first year mangoes are licensed to Canada. This is considered a potential market of Vietnam in the CPTPP.

Khanh stated the Ministry of Industry and Trade had reported to the Government part of their mistake in taking advantage of the opportunity from the CPTPP, which was unattractive and intensive propaganda so this ministry has recently changed and built training courses divided by areas of most interest now, including tax, market access; rules of origin and investment services.”In June 18-19, the Ministry of Industry and Trade organized a training programme to support small and medium enterprises to implement the CPTPP. In the future, we will focus on these contents with specific information and the best interaction among participants,” said Khanh.

Besides the great change of the State management agency, to achieve success from the new generation FTAs such as the CPTPP or the EVFTA, aprerequisite is the active participation of the business community.Deputy Minister of Industry and Trade Tran Quoc Khanh said: “Enterprises need to actively study the content of the agreements carefully,fully prepare manpower, finance as well as other necessary conditions to be able to meet the requirements. Enterprises need to increase their activeness, do not let foreign companies take full advantage of this agreement. To have a bumper crop, you have to get up early to go to the fields.”

From the perspective of the industry, Phan Thi Thanh Xuan, General Secretary of the Vietnam Leather and Footwear Association said:”With the new generation FTAs, we strongly expect businesses to have positive changes to be able to approach the’game’.Along with that, institutions and policies also need to be improved. This requires the synchronization from enterprises to the State to execute andmake the best of market opportunities in the future.”

By Thanh Nguyen/ Ha Thanh

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