Proactivity is the name of the game with CPTPP

08:38 | 22/05/2019 Cooperation

(VEN) - The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) will promote further competition and open new opportunities for 700,000 companies and hundreds of thousands of household businesses. However, to take advantage of the trade deal signed last year, businesses need to take the initiative in seeking opportunities rather than calling for support in a passive manner.

proactivity is the name of the game with cptpp

This sentiment was conveyed by Deputy Minister of Industry and Trade Tran Quoc Khanh at the Vietnam Private Sector Economic Forum 2019 - Enterprise and CPTPP that took place in Hanoi on May 2 under the guidance of the government and the Central Economic Committee.

Proactivity in CPTPP

In his opening speech, Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry (VCCI) said Vietnam had undergone the first three months of CPTPP implementation. This new-generation high-standard free trade agreement (FTA) has attracted great attention of the domestic business community. The CPTPP is expected to benefit Vietnamese exporters, with tariff reductions creating advantages in competition with rivals from other countries. Sharing this opinion, Deputy Minister Tran Quoc Khanh said the CPTPP had come into force in eight of its 11 signatory countries, including Vietnam. Containing high-level commitments, the agreement addresses not only traditional issues such as trade in goods and services but also new ones such as labor and enterprises. With high-level requirements in terms of management transparency, the CPTPP is expected to promote global progress, creativity, trade and investment, helping improve the lives of workers and all people.

“Like its World Trade Organization (WTO) membership, the CPTPP will help Vietnam further institutional improvements. The agreement will help Vietnam accelerate renovation and growth, improve the business environment as well as the transparency, uprightness and fairness of the state administrative apparatus. The CPTPP will also help Vietnam promote administrative reforms, tighten discipline, prevent and combat corruption and bureaucracy,” Deputy Minister Tran Quoc Khanh added.

The Deputy Minister of Industry and Trade said he believed the CPTPP would help Vietnam attract more investment and increase exports.

Backbone of textile, garment industry

Unlike other trade deals, the CPTPP consists of a specific chapter addressing the textile and garment industry. Vu Duc Giang, President of the Vietnam Textile and Apparel Association (VITAS), affirmed the CPTPP would become the backbone of the Vietnamese textile and garment sector.

In his opinion, the textile and garment development plan is unsuitable to rapid changes in this sector. VITAS has submitted many proposals to the government and the Ministry of Industry and Trade in a bid to affect change. Vu Duc Giang said the government needs to control the granting of investment licenses by localities.

The president of VITAS has three proposals. First, a development plan for the textile and garment sector with a vision for the 2035-2040 period should be created, which indicates the role of the government in controlling the licensing of investment in the textile dyeing industry in localities and industrial zones. Second, the Ministry of Industry and Trade should be a pillar in the strategy to develop support industries for the textile, garment, leather and footwear sectors. Third, a transparent legal framework should be created to serve the implementation of the CPTPP, and state management authorities and localities should ensure effective operation of this legal framework to promote sustainable development of the sector.

Deputy Minister Khanh said the CPTPP has strict rules of origin, but in the long term, it will increase the domestic value of export goods.

The deputy minister added that when the FTA between Vietnam and the EU takes effect, the domestic textile and garment sector would attract major investments.

Steel sector opportunity

Vo Minh Nhut, President of NS BlueScope Vietnam, said CPTPP member countries are committed to reducing their import taxes on Vietnamese steel to zero percent, and Vietnamese steel exports to these markets are subject to neither anti-dumping taxes nor technical barriers.

Deputy Minister Tran Quoc Khanh said the domestic steel sector, like the textile, garment, leather and footwear sectors, still lacks support industries. Prior to 2018, Vietnamese businesses could not manufacture hot rolled steel and had to import from other countries. They had to pay trade defense tariffs. Recently, however, domestic companies have mastered the manufacturing of hot rolled steel, promising new opportunities for the sector.

“To seek new export opportunities, the steel sector should promote the manufacture of hot rolled steel,” the deputy minister said.

Lan Anh & Thu Phuong