The "piece of cake" of the CPTPP market is very large

VCN - The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) brings Vietnamese businesses great benefits in terms of market opportunities and exports to member countries. To make full use of this huge space, Vietnamese businesses have to increase their initiative as well as change their strategies.
4353-5743-4-3809-van3338-38cptpp-2353
The CPTPP includes 11 member countries Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. CPTPP countries account for 13.5% of global GDP with total trade turnover of more than US$10,000 billion. Photo: ST

Getting what?

Since it became effective on January 14, 2019, after two years of implementation, Vietnamese enterprises have gained many benefits from the CPTPP.

According to Phan Thi Thanh Xuan, Vice Chairman of the Vietnam Leather, Footwear and Handbag Association (Lefaso), the CPTPP has opened up new market opportunities, attracting investment, as well as developing supporting industries for the Vietnamese footwear industry. Lefaso's data shows the proportion of leather and footwear exports to CPTPP countries increased by 13%. Canada and Mexico are two new markets that this industry can access after the CPTPP comes into effect. In particular, thanks to the CPTPP, Vietnamese firms have exported directly to two markets thanks to the tariff incentives provided by the CPTPP, instead of having to export to a third country as previously.

Similarly, the Vietnam Association of Seafood Exporters and Producers (Vasep) said in January 2021, shrimp exports to the US, the EU and China all decreased over the same period, except for some CPTPP member countries tend to increase. As pangasius exports to the US and some CPTPP markets like Mexico, Australia and Canada increased while China fell sharply, the EU decreased slightly in the first two months of the year.

According to a report "Vietnam after two years of implementing the CPTPP from an enterprise perspective" coordinated by Aus4Reform Program - Australian Embassy in Vietnam, Vietnam Chamber of Commerce and Industry (VCCI), the CPTPP is in the top three free trade agreements (FTA) with the most positive ratings by firms. In particular, the report said businesses look at the CPTPP not only from direct concrete impacts but also as a symbol showing that the Vietnamese Government is trying to integrate into the international economy in depth, with high standards and accepting the pressure to reform itself.

However, regarding the specific impacts of the CPTPP, only one out of four enterprises has experienced the "sweet fruit" from this agreement. The most common interest group for these firms is tariffs, especially in new markets like Canada and Mexico. The positive impacts on institutions (reflected in measures to reform administrative procedures, adjust policies and laws since the CPTPP was officially implemented) is also emphasised by enterprises, even it is after the tariff benefits. Next, they are expected benefits in the future (in cooperation plans, joint ventures with foreign partners to take advantage of the CPTPP, or the expected market expansion with support from this agreement of enterprises). A few businesses even feel the benefits of the normative commitments considered to be of high standard in the CPTPP such as the protection of intellectual property rights.

Regarding the effects of the CPTPP and FTAs in this post-Covid-19 period, businesses were surprisingly optimistic. Some 60% of enterprises think that CPTPP and FTAs ​​will be very useful for them in the "new normal" period. The VCCI's report commented that in difficult situations, every opportunity such as the CPTPP or FTAs ​​is more expected by businesses.

4717-5714-4-3522-dn-yc-lyi-cptpp
4722-5716-4-3557-cyn-try-dn-cptpp

Increasing initiative

Despite such results, comparing the general ground, Nguyen Cam Trang, Deputy Director of the Import and Export Department (Ministry of Industry and Trade) said the benefits businesses receive are still modest. Export growth to CPTPP markets (7.2%) was lower than the 8.4% growth in exports to the world in the same period. The rate of taking advantage of tax incentives for all markets in the CPTPP is only 1.67%, a very low level compared to the 2019 average (37.2%) and compared to the first utilisation rate of many other FTAs.

In addition, the VCCI's report also pointed out that three-quarters of businesses have never benefited directly from the CPTPP and the main reason is that they do not have any business activities related to the market in the CPTPP region in the past two years. A few firms mentioned other reasons like slow issuance guidelines, complicated preferential procedures, difficult licensing procedures and the ability of the importing country to meet quality standards is limited.

In this regard, economists expressed regret when firms have heard a lot, but most of them only know briefly about the CPTPP, so they have not taken advantage of the advantages behind the border line the CPTPP brings to increase production capacity and internal resources. Therefore, many firms said that they do not have an order in this sector because they do not fully understand the CPTPP.

The VCCI report also said that in CPTPP partner countries, the market share of Vietnam's exported goods is still low, only from 1% to more than 3%. Meanwhile, the "piece of cake" in the 10 member countries of this agreement is still very large with an import scale of US $2,500 billion. According to Nguyen Cam Trang, the space to continue growing is still wide. In which, the biggest benefit is the opportunity to continue to improve institutions and the business environment. The next step is to put pressure on increasing the competitiveness of enterprises, forcing firms to raise standards of export goods and form value chains.

Phan Huu Minh, Vice President and General Secretary of Thai Nguyen Business Association, said the CPTPP is "two-sided", on the one hand, creates favorable conditions for firms to integrate and develop production and export capabilities. On the contrary, the CPTPP also provides strict standards, forcing businesses to prepare to follow the general regulations and pay attention to the origin. Therefore, we have to look back at what has been done and not yet done, what is the objective and subjective cause to find the most appropriate direction. With drastic and more substantial support from the authorities, businesses must also seek market information and regulations on origin and tariff preferences. Businesses will work out strategies, prepare to organise production, improve capacity so as not to lose or lose competitiveness.

To prepare for the distant future where the CPTPP and FTAs ​​can be an effective aid, on the business side, experts said that enterprises need to be more proactive in exploring opportunities, commitment to CPTPP and take action to realise benefits from the agreement. In addition, businesses must improve their competitiveness, the Government must continue to review relevant legal regulations, improve the business environment favourable for businesses; strengthen communication, market information, business orientation in production and business plans.

By Huong Diu/Quynhlan

Related News

The wood industry seizes opportunities amid changes in the export market

The wood industry seizes opportunities amid changes in the export market

VCN - According to Mr. Đỗ Xuân Lập (pictured), Chairman of the Vietnam Timber and Forest Products Association, changes in policies in the United States and globally have also opened up significant opportunities for Vietnam's wood industry.
“Give and Take” in the Value Chain of the CPTPP Market

“Give and Take” in the Value Chain of the CPTPP Market

VCN - Vietnamese businesses have many opportunities and advantages if they take advantage of resources from imports and technology transfers when joining the supply chains of FDI companies within the CPTPP.
Seafood exports increase competitiveness through quality

Seafood exports increase competitiveness through quality

VCN - The "wave" of orders from a number of large markets and increased consumption demand in the coming months will be the driving force to accelerate seafood exports at the end of the year. Not only racing to increase exports, Vietnamese seafood also increases its competitive advantage by focusing on product quality, seed sources, green transformation in the production process...
Why are seafood exports to some Middle Eastern countries blocked?

Why are seafood exports to some Middle Eastern countries blocked?

VCN - Many seafood export shipments to some Middle Eastern countries have had their documents returned by the Consular Department due to the nightmare of consular legalization procedures, leading to a blockage in exports to these markets.

Latest News

Top 10 Reputable Animal Feed Companies in 2024: Efforts to survive the challenges of nature

Top 10 Reputable Animal Feed Companies in 2024: Efforts to survive the challenges of nature

VCN - In the Report announcing the Ranking of Top 10 Reputable Animal Feed Companies in 2024 on December 12, 2024, Vietnam Report Joint Stock Company said that Vietnam's animal feed industry has faced many challenges from natural disasters and epidemics. But overcoming all, the industry continues to survive and has confidence in the future.
Vietnam's import-export surges 15.3%

Vietnam's import-export surges 15.3%

Vietnam's total import-export turnover reached 745 billion USD as of December 14, marking a robust 15.3% growth compared to the same period in 2023, according to the General Department of Vietnam Customs.
More Vietnamese firms interested in Saudi Arabia: Ambassador

More Vietnamese firms interested in Saudi Arabia: Ambassador

An increasing number of Vietnamese enterprises are showing interest in Saudi Arabia, particularly in the sectors of Vietnam's advantages and the Middle East country's needs, a diplomat has said.
Binh Dinh province works to attract investment from Japan

Binh Dinh province works to attract investment from Japan

The People’s Committee of Binh Dinh province on December 18 inked a cooperation deal with the Japan - Vietnam Friendship Association of Sakai city as part of the south-central province’s efforts to attract more investment and development resources from the Northeast Asian country.

More News

Agricultural, forestry and fishery exports “reach the target” early

Agricultural, forestry and fishery exports “reach the target” early

VCN - According to a report from the Ministry of Agriculture and Rural Development, the export turnover of agricultural, forestry and fishery products in November 2024 is estimated at US $5.3 billion, up 13.9% compared to November 2023. It is notable that it not only “reaching the finish line” early, the agricultural sector also exceeded the annual plan by over US $ one billion.
Thailand remains Vietnam’s biggest trading partner in ASEAN

Thailand remains Vietnam’s biggest trading partner in ASEAN

The activities conducted by the Vietnam Trade Office in Thailand in 2024 have enriched the trade and investment relations between the two countries, contributing to helping Thailand maintain its position as Vietnam's largest trading partner in the Association of Southeast Asian Nations (ASEAN), according to Le Huu Phuc, Vietnam's Trade Counsellor in Thailand.
Rubber value soars in 2024: VRA

Rubber value soars in 2024: VRA

All Vietnam's rubber’s top 15 export markets saw growth in export values in 2024, with Malaysia recording the highest increase, expanding fivefold, followed by Sri Lanka at 3.7 times, according to the Vietnam Rubber Association (VRA).
Vietnamese businesses struggle to access green finance

Vietnamese businesses struggle to access green finance

VCN - Green finance is gradually becoming an indispensable tool in Vietnam to support businesses, promote sustainable development, and move towards the goal of Net Zero. However, the path to accessing green capital is full of barriers, especially for small and medium enterprises.
E-commerce: a gateway to boost Vietnamese commodities in the UK market

E-commerce: a gateway to boost Vietnamese commodities in the UK market

E-commerce stands out as a promising channel to further enhance Việt Nam’s trade presence in this dynamic market.
Agro-forestry-fisheries exports top 62 billion USD in 2024

Agro-forestry-fisheries exports top 62 billion USD in 2024

Vietnam’s agro-forestry-fisheries exports are projected to reach over 62 billion USD in 2024, and continue to grow next year, heard at a conference in Ho Chi Minh City on December 16.
Removing “bottlenecks” for digital transformation in industrial production

Removing “bottlenecks” for digital transformation in industrial production

VCN - Although implementing digital transformation towards smart production creates many opportunities, it also poses significant challenges for businesses, especially in terms of investment costs and human resources.
UKVFTA facilitates Việt Nam

UKVFTA facilitates Việt Nam's tuna exports to UK market

Việt Nam is the 13th largest tuna product supplier to the UK, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).
Vietnam’s garment-textile exports expected to reach 44 billion USD this year

Vietnam’s garment-textile exports expected to reach 44 billion USD this year

Vietnam’s garment-textile export value is expected to reach 44 billion USD in 2024, marking an 11.26% increase from 2023, according to the Vietnam Textile and Apparel Association (VITAS).
Read More

Your care

Latest Most read
Top 10 Reputable Animal Feed Companies in 2024: Efforts to survive the challenges of nature

Top 10 Reputable Animal Feed Companies in 2024: Efforts to survive the challenges of nature

VCN - In the Report announcing the Ranking of Top 10 Reputable Animal Feed Companies in 2024 on December 12, 2024, Vietnam Report Joint Stock Company said that Vietnam's animal feed industry has faced many challenges from natural disasters and epidemics.
Vietnam's import-export surges 15.3%

Vietnam's import-export surges 15.3%

Vietnam's total import-export turnover reached 745 billion USD as of December 14, marking a robust 15.3% growth compared to the same period in 2023, according to the General Department of Vietnam Customs.
More Vietnamese firms interested in Saudi Arabia: Ambassador

More Vietnamese firms interested in Saudi Arabia: Ambassador

An increasing number of Vietnamese enterprises are showing interest in Saudi Arabia, particularly in the sectors of Vietnam's advantages and the Middle East country's needs, a diplomat has said.
“Give and Take” in the Value Chain of the CPTPP Market

“Give and Take” in the Value Chain of the CPTPP Market

Vietnamese businesses have many opportunities and advantages if they take advantage of resources from imports and technology transfers when joining the supply chains of FDI companies within the CPTPP.
Binh Dinh province works to attract investment from Japan

Binh Dinh province works to attract investment from Japan

The People’s Committee of Binh Dinh province on December 18 inked a cooperation deal with the Japan - Vietnam Friendship Association of Sakai city as part of the south-central province’s efforts to attract more investment and development resources from the Northeast Asian country.
Mobile Version