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"Sweet fruits" initially from CPTPP

We hadthe opportunity to meet Vu Duc Giang, Chairman of Vietnam Textile and Apparel Association in the last days of 2019, and when referring to Vietnam's international economic integration process, especially the CPTPP, Giang couldn’t hide his excitement. The Chairman said thatin 2019, the proportion of textile exports to CPTPP markets such as Australia, Canada and New Zealand increased significantly. In the past, when there was no CPTPP, Vietnamese textiles and garments struggledto enter these markets because it was difficult to compete with Chinese products. However, in 2019, buyers came to Vietnam, placing orders. “Not only that, there has also been a shift of investment from other countries into Vietnam's textile and apparel industry. For the Japanese market alone, since Vietnam and Japan already have an FTA, having theCPTPP increases the export motivation,”Giang said cheerfully.

Indeed, 2019 was a very special year for Vietnam's international economic integration when CPTPP took effect on January 14. Nearly 10 years ago, Vietnam joined the agreement (then it was the Trans-Pacific Strategic Partnership Agreement - TPP). The agreement has undergone more than 40 negotiations at both technical and ministerial levels with significant changes when the US withdrew and the name was changed to the CPTPP. Considering all that, reaching the milestone of theCPTPP taking effect was not simple.

However, it is already effective; Vietnam still has piles of worries because it lacked enough preparation to make good use of the opening opportunity. Nearly a year passed, the results somewhat brought excitement and joyful. In the first 11 months of 2019, exports to CPTPP member markets achieved a good increase, showing the first steps to effectively take advantage of commitments from this agreement to promote and diversify export markets. Typically, exports to Canada reached US$3.5 billion, up 27.2 percent; export to Mexico reached $2.7 billion, up 29.5 percent.

Looking at a broader perspective, beyond the framework of a CPTPP agreement, Vietnam's international economic integration in 2019 also recorded many positive results. Up to now, Vietnam has signed 13 FTAs ​​and threeFTAs are ​​under negotiation. Deeply integrating into international trade, the "sweet fruit" is easy to see that exported goods can compete better than many other suppliers thanks to gradually removed tariff barriers. Vietnamese goods have stepped deeper into markets where Vietnam has FTAs, gradually asserting its position. For example, in May 11, 2019, Vietnam recorded a trade surplus of $9.12 billion. All market groups that Vietnam has signed an FTA with and are implementing have recorded good growth. Specifically, exports to Japan increased by 7.6 percent; to South Korea increased by 10.1 percent; to ASEAN increased by 2.5 percent; andto Russia increased by 9.1 percent.

Waiting for the EVFTA

Thoughthe CPTPP officially came into effect, it would be flawed to sketch Vietnam's "picture" of international economic integration in 2019 without mentioning the EVFTA signed on June 30, 2019 after a long time waiting.

Talking about the EVFTA, the "commander" of Industry and Trade Tran Tuan Anh could not hide his joy. Given that this agreement is very important, high standard and comprehensive, according to Minister Anh, the signing of the EVFTA will significantly enhance Vietnam's position. For exports, the EVFTA will be a huge push to help Vietnam diversify its export markets and products, especially agricultural and aquatic products as well as Vietnam's commodities that have many competitive advantages.

From the perspective of leading a textile enterprise and a person who is deeply concerned for the development of the textile and apparel industry in general, Vu DucGiang shared high hopes and expectations on the EVFTA when this agreement is highly likely effective in early 2020. In a happy story looking back to 2019 and looking forward to 2020, when a Customs Newspaper reporter asked if textile enterprises can confidently take advantage of opportunities from the EVFTA, he said. Vu DucGiang did not hesitate to assert: “Textile and garment enterprises have high expectations and expectations on the EVFTA with 100 percent confidence to conquer this market better. That's because, this is atraditional market of Vietnamese textile. The two sides have a process of understanding and sharing with each other. Many factories have also invested in the production of fabric, yarn, weaving... to be able to catch up and wait for the EVFTA. The shortage of supply issues has been and has been removed to meet the requirements from the EU market.”

Referring to the process of international economic integration in general, especially with CPTPP and the EVFTA, many experts expressed thoughts that these are new generation FTAs ​​that have direct and strong impacts on the economy. It has a large degree of openness like Vietnam. Then here, when exporting enterprises are no stranger to CPTPP and also caught up with opportunities from the EVFTA, Vietnamese goods still have many opportunities to increase market share in international markets. However, to receive a lot of "sweet fruits", the key thing is to stop the process of "cultivating and cultivating".

In the coming time, not to miss the opportunities provided by FTAs, the Ministry of Industry and Trade has determined to promote the dissemination, guide businesses and people to identify opportunities and challenges of CPTPP, the EVFTA and FTAs ​​that Vietnam has been and will be preparing to sign and participate in. “The focus of the Ministry of Industry and Trade is to workwith the business community, the people, and the stakeholders to try andput the EVFTA into practice soon. The Government of Vietnam and the EU as well as the EU's partners will have specific programmes to not only organize the supervision and implementation of the EVFTA in a complete and timely manner, but also to continue strengthening the capacity and institutions as well as opportunities, creating an increasingly favourable interaction between the two sides,”emphasized Minister Tran Tuan Anh.

Around international economic integration of Vietnam, who directly participated in the process of preparing and negotiating many FTAs, Ngo Chung Khanh, Deputy Director of Multilateral Trade Policy Department (Ministry of Industry and Trade) said “taking advantage of opportunities provided by FTAs, efforts from State management agencies are not enough, initiative from enterprises plays an extremely important role. For example, with the CPTPP, when exporting clothing items to the market in the CPTPP block, Canada, enterprises must find out whether exported goods to the Canadian market are eligible for preferential tax rates or not. With the current base, current imported fabric, etc., what should enterprises do to enjoy that preferential tax rate? If having difficulties and problems, enterprises can contact the delegation directly to get an answer,” Khanh said.

The year 2019 ended with encouraging results in Vietnam's international economic integration. This year opens with so many starts and expectations. Believing that, with the initiative and preparation efforts from both the State management agency and the business community, the implementation and utilization of FTAs ​​in the coming time will bring a lot of positive results. Thanks to that, Vietnamese goods have also gradually shaped and identified more radiantly on the "map" of international trade.