What benefits for Vietnam from RCEP?

Prime Minister Nguyen Xuan Phuc delivers the opening speech at the 37th ASEAN Summit

The 37th ASEAN Summit was opened on  November 12 The Regional Comprehensive Economic Partnership (RCEP) is one of the most expected results at this event.

Initially, there were 16 countries participating in the RCEP negotiations, but by November 2019, India withdrew because of fears that the deal would cause damage to domestic producers. The remaining countries participating in the agreement include 10 ASEAN member countries and five countries to which ASEAN has signed a free trade agreement, including Australia, China, Japan, South Korea, and New Zealand.

The RCEP negotiation process officially began at the 2012 ASEAN Summit in Cambodia. As many as 15 countries in the Asia-Pacific region announced their goal of completing the agreement at the 4th RCEP Summit when Vietnam assumed the role of ASEAN Chair in 2020. Malaysian Minister of Industry and International Trade Azmin Ali called the signing of the RCEP agreement the culmination of “eight years of negotiation by blood, sweat, and tears.” The signing of the pact was expected to be completed by 2015.

Some economists say that the ratification could put pressure on some US companies and other multinationals outside the region, especially after the US withdraws from the agreement. Trans-Pacific Partnership-TPP (later the Comprehensive and Progressive Agreement for Trans-Pacific Partnership-CPTPP). RCEP is an agreement that many people expect will bring benefits to the Vietnamese economy.

Associate Professor. Ngo Tri Long commented that, unlike EVFTA or CPTPP, Vietnam’s advantage in the first RCEP is that the level of the countries in the region is not very different even though Vietnam is lower than some regional countries. Of course, in the narrow range and similarity, it is favorable for Vietnam, although there are many great challenges. He stated a few challenges that Vietnam must cope with:

The biggest challenge to say is that productivity, quality, and efficiency are very low. In the trend is Vietnam still trying. In the resolution to 2045, Vietnam strives to become an industrially developed country. According to the target, by 2020 Vietnam must become an industrial country, but this goal was failed. Or by 2020, the income per capita should be $3,500 but less than $3,000 so far.

The problem is that if we take a step, other countries also take at least one step. There is a great leap forward or better than people, but now the institutional issue is the core issue that needs to be addressed. It is necessary to reform and reform on how to promote the change of institutions to create an important driving force for Vietnam’s economic development.”

Mr. Long added, Vietnam has already signed many agreements. So far, apart from the WTO agreement, there are 16 other bilateral and multilateral agreements. Now that this agreement is reached, Vietnam will expand its economic relations with other countries in the region. At the same time, it creates favorable conditions for Vietnam to approach more new directions.

It is important that this agreement, as well as the EVFTA and CPTPP Agreement, have raised the position of Vietnam in the eyes of the world, but Vietnam’s competitiveness compared to other countries is still very low.

According to The Diplomat, the total population of the 15 countries participating in RCEP is more than 3 billion people, has a total GDP of about $17 trillion, and accounts for about 40% of the total world trade.

The ASEAN leaders met to discuss the finalization of the RCEP.

The RCEP is an attempt by countries to oppose protectionism, even though the US of the Trump era advocates the use of trade protectionism. After withdrawing the US from the TPP, the Trump administration has imposed tariffs on many items from US trading partners that he considers unfair trade practices.

Economic – financial expert Dinh Trong Thinh said that in such a context, the RCEP should be completed urgently. He added about what Vietnam would benefit if this agreement is passed:

Actually, the Regional Comprehensive Partnership Agreement has a relatively large impact on countries in the region in general and Vietnam in particular. The first is a relatively comprehensive economic cooperation, including the role and position of countries in the region when cooperating with China. Cooperation on investment and general issues as well as development requirements. Thus, if the RCEP is signed, the status of countries in the region, including Vietnam, will increase. First of all with China. After that is an increase in countries around the world.

The benefit of Vietnam is that Vietnam is also currently having a very good relationship with China. Especially Vietnam is importing a lot from China. But honestly, the penetration of Vietnamese goods in particular into the Chinese market is clearly limited. Therefore, if Vietnam can better penetrate the Chinese market, both in science and technology, this will be a step for the Vietnamese economy to have new dynamism from which to develop the economy. better practice. “

Mr. Dinh Trong Thinh added that many people also worry that Vietnam depends too much on China, especially raw materials. Vietnam also sees that lesson in recent times, especially the difference between the partners of the two sides. In the near future, if Vietnam closes the gap, it will be better.

RCEP has a more modest level of commitment than TPP, but broader scale, covering many economies and commodities. TPP includes provisions to protect workers’ rights and protect environmental standards, reform state-owned enterprises, strictly protect intellectual property, and cut tariffs.

The Vietnam Economic Times newspaper quoted Deborah Elms – Director of the consulting firm Asian Trade Center – as saying that RCEP mainly brings benefits to goods trade because it will sharply reduce tariffs on many products. In addition, the agreement will allow businesses to sell the same item in all countries in the agreement without having to enforce separate procedures in each market. This method will help Asian manufacturers to sell more products in the regional market.

Meanwhile, Ms. Alicia Garcia Herrero, chief economist in charge of Asia-Pacific at Investment Bank Natixis (based in Paris, France), has a more conservative view of RCEP. Talking to Tuoi Tre newspaper, Ms. Herrero said that RCEP appeared at the right time to energize the recovery of multilateralism, as the trend of de-globalization is becoming more intense and more governments are promoting protectionism in order to achieve unilateral benefits.

Thoibao.de (Translated)

Source: https://www.rfa.org/vietnamese/in_depth/what-will-vietnam-benefit-when-rcep-is-approved-dt-11132020132216.html

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