Cptpp

The Hanoitimes – The UK is a major trading partner for members in the CPTPP, including Vietnam.

Vietnam fully supports the UK to boost its economic-trade relations with the Asia-Pacific region and is willing to share its experience to accelerate the latter’s accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Spokesperson of Vietnam’s Ministry of Foreign Affairs Le Thi Thu Hang.

Spokesperson of Vietnam’s Ministry of Foreign Affairs Le Thi Thu Hang gave the remarks in response to questions on the UK’s formal application to join the trade deal on February 1.

“The CPTPP is a next-generation free trade agreement, which shows strong determination from regional countries in bolstering trade cooperation,” said Ms. Hang in a monthly press briefing on February 4.

According to Ms. Hang, all CPTPP members have agreed on certain procedures and requirements that countries need to fulfill to join the trade deal.

“The UK is a major trading partner for members in the CPTPP, including Vietnam,” stressed Ms. Hang.

A statement from the UK government in late January said “joining the CPTPP would deepen the UK’s access to fast-growing markets and major economies, including Mexico, Malaysia and Vietnam, for the benefit of UK business.”

“Applying to be the first new country to join the CPTPP demonstrates our ambition to do business on the best terms with our friends and partners all over the world and be an enthusiastic champion of global free trade,” said UK Prime Minister Boris Johnson.

UK trade with the group was worth £111 billion in 2019, growing by 8% a year since 2016.

Last December, Vietnam and the UK had signed the UK-Vietnam Free Trade Agreement (UKVFTA) to ensure continuity in bilateral trade relations as the Brexit’s transitional period ended on December 31, 2020. Despite severe Covid-19 impacts, bilateral trade turnover stood at US$5.6 billion in 2020, in which Vietnam exported goods worth US$4.95 billion to the UK, making the latter its third largest export market in Europe.

The Hanoitimes – With 16 FTAs in effect or under negotiation, Vietnam has been at the center of a global network of free trade that accounts for 59% of the world population and 68% of global trade.

During a new phase of global economic integration, Vietnam gives high priority to taking advantage of free trade agreements (FTAs), especially the Comprehensive and Progressive Agreement for Trans – Pacific Partnership (CPTPP) and the EU – Vietnam Free Trade Agreement (EVFTA), for economic recovery, according to Deputy Prime Minister Pham Binh Minh.

Deputy Prime Minister Pham Binh Minh at the meeting. Photo: VGP.

The business community and business associations should play a more active role in realizing Vietnam’s commitments in FTAs, and propose measures to the government to boost competitiveness and efficiency in trade protection, Minh said at a government meeting on July 20.

With 16 FTAs in effect or under negotiation, Vietnam has been at the center of a global network of free trade that accounts for 59% of the world population and 68% of global trade. This status  is mutually beneficial for Vietnam and its major trade partners, Minh added.

Minh requested government agencies to identify new potential markets and partners for for the diversification of Vietnam’s export products amid the complicated Covid-19 progression globally.

According to Minh, some notable achievements of Vietnam’s efforts in global economic integration over the past years included the signing and enforcement of the CPTPP; the ratification of the EVFTA; promoting the role of ASEAN Economic Community and the economic linkage between ASEAN and its partners; actively contributing to multilateral cooperation mechanisms, specifically the United Nations, the World Trade Organization (WTO), the Asia – Pacific Economic Cooperation (APEC), the Asia – Europe Meeting (ASEM), among others.

The Hanoitimes – Direct impacts from the CPTPP agreement would not be significant, but means a more stable and predictable environment for logistics firms in Vietnam, according to an expert.

Foreign competition is the smallest concern for Vietnamese logistics firms when the Comprehensive and Progressive Trans – Pacific Partnership (CPTPP) comes into play, according to Nguyen Thi Thu Trang, director of the WTO Center and Integration under the Vietnam Chamber of Commerce and Industry (VCCI).

Overview of the conference. Source: Ngoc Thuy.

“The major concerns would be weak state management capabilities, deficiencies of logistics infrastructure, unfavorable business environment and unofficial costs,” said Trang at a conference under the program “Australia supports Vietnam’s economic reform” (Aus4Reform) on November 25, discussing the country’s challenges and opportunities from the CPTPP.

Trang argued the domestic logistics market has basically opened to foreign companies since Vietnam’s participation in the World Trade Organization (WTO) in 2007, therefore, “direct impacts from the trade deal would not be significant, but rather a more stable and predictable environment for logistics firms.”

Similarly, there would be no major changes in the landscape of Vietnam’s distribution and e-commerce sectors.

“Indirect impacts are much anticipated,” said Trang, adding the CPTPP’s pressure to reform would force Vietnam to have a more transparent and attractive market for all businesses involved.

“Commitments to eliminate tariff and non-tariff barriers will create conditions to increase the supply of goods for distribution – e-commerce sectors, and increase the demand for logistics services,” said Trang.

Meanwhile, commitments in custom – trade facilitation are presenting opportunities to reduce business costs, she stated.

Ngo Chung Khanh, deputy director of the Multilateral Trade Policy Department under the Ministry of Industry and Trade (MoIT), said the CPTPP’s market-opening principle, namely the “Select to exclude” (some services are selected to exclude), provides higher commitment compared to “select to include”, and means huge opportunities to attract investment into Vietnam’s business sectors.

Khanh also noted the “ratchet” provisions under the CPTPP encourage the privatization of public services. Under these provisions, anything that is public can be made private. However, once a service is privatized it cannot be brought back into public hands.

“Such clause would help maintain a predictable legal environment for Vietnam,” said Khanh.

CPTPP to boost logistics services

Vietnam’s logistics sector recorded growth rate of 12 – 14% annually over the last few years, reaching an annual revenue of US$40 – 42 billion and contributing 4 – 5% of the GDP, said a VCCI’s report.

Statistics showed Vietnam currently has 30,000 logistics companies, an increase from 23,000 in 2016, including 4,000 operating in cargo transportation domestically and internationally.

Local logistics firms, mostly small and medium sized, are holding 23 – 30% of the market share, while the remaining share belongs to around 30 multinational peers.

In 2018, Vietnam ranked 39th out of 160 countries and territories in the World Bank’s Logistics Performance Index (LPI), up 25 places from 2017, and only behind Singapore and Thailand in ASEAN.

The World Bank estimated by 2030, the CPTPP would help boost Vietnam’s GDP growth by 1.1 – 3.5 percentage points, resulting in an increase of 4.2 – 6.9% in exports and 5.3 – 7.6% in imports.

“This would present opportunities for the logistics sector, particularly international logistics services,” said VCCI.

Vietnam’s logistics and warehousing market is expected to register a positive compound annual growth rate (CAGR) of 13.3% in the 2018-2022 period, reaching revenues of US$86.7 billion by 2022, according to Ken Research – a market research and consulting company based in India and the US.

In addition to Vietnam, country members of the CPTPP include Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Singapore, New Zealand and Peru. President Donald Trump withdrew the US from the pact in January 2017 days after his inauguration.

The 11-nation deal economies represent around 13% of global economic output, including third largest economy Japan, and 500 million people. It includes cuts to tariff and non-tariff barriers among its members and is designed around high standards on human rights, labor practices, and environmental standards.

The Hanoitimes – The UK looks to focus on trade with the dynamic Asia-Pacific region, including Vietnam.

As a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Vietnam is willing to share its experience on CPTPP accession with the UK, said Foreign Ministry Spokesperson Le Thi Thu Hang.

Foreign Ministry spokesperson Le Thi Thu Hang. Photo: MOFA

At the ministry’s regular press conference on September 17, the spokesperson stressed that the CPTPP is a high-quality free trade agreement with comprehensive commitments to promoting economic-trade cooperation among member countries and trade liberalization towards open and rules-based trade in the region.

She underlined that CPTPP member countries have adopted procedures for joining the pact, and economies interested in the pact should meet its high standards and follow admission process.

Earlier, on September 9, the UK’s Department for International Trade (DIT) announced that the UK has taken a major step in the process of joining CPTPP.

International Trade Secretary, Liz Truss, alongside the current chair of the CPTPP Commission, Mexican Economy Minister Graciela Márquez, opened discussions between senior UK trade officials and Chief Negotiators from all 11 members of the Partnership to discuss potential UK’s incorporation into the deal.

This is the first time the UK has met with Chief Negotiators from all 11 members of the Partnership to discuss UK admission, and the first time CPTPP members have had such a discussion with a country seeking membership since the Partnership was created in 2018.

The UK has held preparatory conversations with all CPTPP members. If the UK decides to apply, it will enter into a formal accession negotiation with all member states.

This meeting follows major progress in negotiations between the UK and Japan, the beginning of negotiations with Australia and New Zealand, and the resumption of negotiations with Canada, as the UK looks to focus on trade with the dynamic Asia-Pacific region. CPTPP membership also provides an opportunity to expand trade links with key partners in the Americas.

The CPTPP is a free trade agreement among Canada, Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

Once fully implemented, the 11 countries will form a trading bloc representing 495 million consumers and 13.5% of global GDP, according to the Canadian government. If the UK were to join, that share of global GDP would rise to about 16%.

The UK left the European Union early this year but the main terms of its membership remain in place during a transition period until the end of this year. Both the UK and EU hope to negotiate a new free trade deal between them by the end of the year, according to Reuters.

On August 6, the CPTPP Commission’s third meeting ended with the approval of a ministerial joint statement reiterating the members’ commitment to back trade liberalization, and multilateral trade. The next meeting of the CPTPP Commission is scheduled for 2021 in Japan.

Hanoi (VNA) – Apart from challenges, many opportunities will be offered to the Vietnamese economy in 2021, experts have said.

Such agreements as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership ( CPTPP ) and the EU-Vietnam Free Trade Agreement ( EVFTA ) to which Vietnam is a signatory will open up wide doors for the country to further integrate into the world.

Economist Nguyen Minh Phong forecast that Vietnam’s agriculture, industry, export-import, and the domestic financial, stock and real estate markets will grow further in the year.

Notably, with the current growth rate of the local processing sector, Vietnam would join the group of newly-emerging industrialised countries in the coming years.

Pham Dinh Thuy from the General Statistics Office said that the GDP growth target of 6.5 percent set by the Government is feasible in the normal situation. However, this would be a challenge for the country as 2021 is the first year of implementing the 2021-2025 socio-economic development plan.

The official pinned hope on the development of such sectors as food, garment-textile, wood processing, metal production, construction and electricity production.

To achieve the set economic targets, it is a must to contain the COVID-19 pandemic, he said, suggesting stepping up economic restructuring, churning out typical products, streamlining administrative procedures, improving the domestic investment environment, and improving the country’s competitiveness.

Thuy also highlighted the significance of trade promotion and foreign investment attraction, which, he said, needs specific plans.

Pham Viet Hoai, Chairman of Kym Viet JSC, said the application of digital technology would bring about positive results to any firm.

According to Deputy Minister of Planning and Investment Tran Duy Dong, after the PM adopted the national digital transformation programme, many sectors have reaped significant outcomes, benefiting people and the entire economy.

Digital transformation is vital as it helps enterprises improve their business governance and adapt to the latest changes in technology, market and consumer taste, he said./.

VNA