Speaking at a meeting titled "CPTPP: Opportunities and Challenges for Vietnam" on Thursday in HCM City, Pham Quynh Mai, deputy head of the Ministry of Industry and Trade (MoIT)’s Multilateral Trade Policy Department, said with its supporting industries remaining weak and rules of origin being strict in many countries, it is difficult for Vietnamese exporters to fully capitalise on the CPTPP.
However, the clothing and leather and textile sectors, among others, would see the biggest growth under CPTPP, she said.
Clothing and leather products, chemicals, plastic products, and transport equipment and machinery are expected to get an export boost while imports will grow in almost all sectors.
The CPTPP will provide greater market access to Vietnamese firms but also open up the country to foreign products, increasing competition.
Experts said industries such as automobile and agriculture would face intense competition.
Tran Thị Thu Huyen, head of the Ministry of Finance’s International Cooperation Agency, said under the CPTPP average trade-weighted tariffs would drop from 1.7 percent to 0.2 percent for Vietnamese exporters.
Non-tariff measures are predicted to reduce by 3.6 percentage points in terms of tariff equivalence, she said.
As market access increases and tariff commitments take effect, sectors such as textiles, footwear, electronics, and equipment would have an opportunity to increase their exports to other member economies, she said.
Trịnh Thị Thu Hien of the MoIT’s Export-Import Department said with strict rules of origin, Vietnam would have to develop supporting industries to benefit from the trade deal.
Tran Thi Thanh Thuy of the Multilateral Trade Policy Department said Vietnam planned to improve the investment environment and protect intellectual property rights to attract investors.
Government institutions and administrative systems also needed to be reformed to take advantage of the CPTPP, she said.
Experts said the effort could be expensive in the short term, but in the long run would help Vietnamese companies take full advantage of such trade agreements.
It is also necessary for Vietnam to focus on small and medium-sized enterprises (SMEs) and reform State-owned companies.
SMEs account for a majority of the economy and labour market, and the Government should support them if it wants the SMEs to align themselves further with the global supply chains.
Vietnam is expected to fulfil its trade liberalisation commitments and ratify the CPTPP within this year.
At the Vietnam Business Summit held last month, Prime Minister Nguyen Xuan Phuc had said his Government would summit the CPTPP to the National Assembly for approval this month.
New Zealand ratified the CPTPP on Wednesday, taking to four the number of economies that have done so.
New Zealand Minister for Trade and Export Growth David Parker said Japan, Mexico and Singapore had ratified the deal in July and Australia and Canada are expected to join very soon, which means the tariff reductions and increased exports would begin very early in 2019.
The other signatories are Vietnam, Brunei, Chile, Malaysia, and Peru.
The CPTPP would come into effect 60 days after at least six member countries ratify the trade pact.
The trade agreement was signed last March following a period of turbulence caused by the departure of the US.
It is designed as an open free trade agreement, enabling economies to join by accepting its standards and signing agreements with its member economies.