CPTPP has started to benefit Vietnam's economy

According to Deputy Prime Minister Pham Binh Minh at the recent National Assembly meeting, in the first four months of implementing the recent Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Vietnam has witnessed positive trading results with some of the CPTPP members compared to the same period last year.

For example, Vietnam’s trade with Canada and Mexico has increased by over 70 per cent and 8 per cent, respectively. These two countries, nevertheless, have not signed a free trade agreement (FTA) with Vietnam yet. For Japan, the trading partner that Vietnam has already had a FTA with, the trade figure has risen by 4 per cent during the period.

These figures themselves, as noted by Minh, have started to prove that CPTPP is in fact benefiting Vietnam's economy.

The country, however, is also facing certain difficulties and challenges in the implementation of CPTPP. Minh said that as it is a new-generation FTA that comes with high standards, Vietnam will come across strict regulations in terms of the origin of goods for even sectors of its strength like textile and garment.

To take advantage of the zero or low tariff governed by CPTPP, the sector therefore must satisfy the origin of goods test, which could come in as a rather big challenge for many domestic enterprises.

In addition, the country may have to deal with foreign goods that detour into Vietnam to change their origin, in a bid to enjoy the tariff reductions under CPTPP or under other FTAs that Vietnam has signed.

CPTPP, meanwhile, has provisions for investor-state dispute that allow foreign investors to sue the member state. To gear up for this, Vietnam must comply with all regulations to keep itself free from any trouble arising from the dispute with foreign investors.

To fully appreciate all benefits from CPTPP, Vietnam will need to round up its legal framework to implement the trade pact in an efficient way. Businesses, on the other hand, must understand thoroughly the favours, opportunities and challenges that CPTPP offers to ramp up their activities and production accordingly.