Enterprises need to actively build links to exploit advantages from CPTPP

Update: 21-04-2019 | 09:41:49

The Comprehensive and Progressive Agreement for Trans-Pacific, which was evaluated by experts, would create many benefits for our country. The important issue now is that domestic enterprises need to make good use of opportunities after CPTPP takes effect. Binh Duong Newspaper had an interview with Pham Chi Lan, senior economic expert, member of the Government Development Advisory Group.

Production line at Dong Hung Shoe Company.

- For a long time, we often say that joining the CPTPP would bring a lot of benefits for Vietnam and domestic enterprises. Please tell us the specific benefits brought by CPTPP?

- Joining CPTPP, Vietnam has 3 major benefits: First is institutional reform. Institutional reform is a requirement of Vietnam itself, which is one of three strategic breakthroughs of Vietnam for the period of 2011-2020. Participating in CPTPP creates more motivations and pressures for Vietnam to promote this extremely necessary reform. CPTPP has very comprehensive rules and commitments with very high standards and transparency, and a strict monitoring mechanism. That will help our country conduct reforms methodically, substantially, transparently, seriously and effectively.

The second is the expansion of export and import markets. With CPTPP, our country is able to expand import market to 10 CPTPP member countries, including some highly developed economies. Thirdly, in terms of investment and technology, Vietnam would have a better position to receive investment capital from developed countries inside and outside CPTPP. Following that, Vietnam would achieve advanced management method, technology and ability to participate in new global value chains; Investment quality would be improved compared to traditional investment lines for a long time.

Participating in CPTPP, Vietnam would have a new solid development in relations with partners in Asia-Pacific region. We would have better institutional and socio-economic background, have greater self-control in international relations, including with big countries. At the same time, our country's export market is wide open to almost 0% tax rate, while other countries exporting goods to CPTPP must bear a high tax rate. CPTPP would also create a turning point in Vietnam's trade relations with some major countries.

- Could you tell us more about how beneficial the institutional reform would be for businesses? Many people wonder why CPTPP has so many benefits but neighboring countries, such as Thailand do not participate in this agreement?

- CPTPP has very comprehensive regulations and commitments with very high standards and transparency, and a strict monitoring mechanism. Issues of concern are \ regulations on labor and union, government procurement, banking, market access on rules of origin, customs, intellectual property, investment, and procurement; in which labor, government procurement and market access are issues that need to special attention. For example, in the field of public procurement, when joining CPTPP, the State will organize transparent biddings, and all domestic and foreign businesses can participate in public biddings.

About why our country is a member of CPTPP, but some neighboring countries have not participated in this agreement, we know that. Our country wishes to sign a multilateral trade agreement with large countries, like the US, but not enough potential. Therefore, we must participate in other multilateral agreements, namely CPTPP is a multilateral agreement that will have many benefits for Vietnam. In general, integration in the long term is still a global trend. Protectionism has increased in the U, and China's growing role has made it clear to other countries that there is no other way than cooperate with each other. Moreover, in current conditions, the development of technology with Industry 4.0 requires and promotes trade liberalization and deeper international integration.

In fact, when the US withdrew from Trans-Pacific Partnership Agreement (TTP), the participants in this agreement were all inadequate, concerned, because nearly 10 years of preparation with many campaigns, negotiations, TPP’s future suddenly became indeterminate. But Japan has surpassed the US’s shadow for many years, demonstrated the role of leader in the right time to lead and accelerate the negotiation of CPTPP signing. For some neighboring countries, joining multilateral agreements is not an urgent need when they have unilateral agreements. However, after CPTPP is signed with visible benefits for member countries, some countries will think about joining this organization in the future.

- CPTPP is effective, which market opportunities for Vietnamese businesses in general and Binh Duong businesses in particular, ma'am?

- I think the effective CPTPP will open up opportunities for many economic sectors. First of all, our country will have new markets, new channels to open more relations with CPTPP member countries. For example, our country has 2 partnerships with Japan (a direct agreement and one for ASEAN). Now, our country has added CPTPP, which is a multilateral channel, not just two countries and not only within ASEAN.

One of the industries that would get the greatest opportunity in our country is the wood industry - being a strong industry of Binh Duong. In fact, the strong development of timber industry over the years is a testament to the fact that local timber enterprises have been able to grasp opportunities well. Currently, the move of timber production companies of other countries, especially from China to Vietnam when CPTPP is effective, and great potential of domestic wood processing industry, many opportunities for financial investment, trade, design, materials, equipment, marketing... are being gathered in Vietnam. The impetus from world demands creates opportunities for domestic wood processing industry in general, Binh Duong wood industry in particular to develops more comprehensively to meet the new needs of investors and customers.

- In your opinion, what shall Binh Duong's timber enterprises need to do to promote development in the near future, to commensurate with the available potential of the province?

- Currently, only strong enterprises are able to create 4 basic values at the same time: production, design, trade, and brand name. Most businesses in wood industry of our country as well as of Binh Duong are strong in production but not good at design, brand, and trade. Therefore, businesses need to create new links, hire from abroad and invest, enhance their position in the global value chain.

In addition, wood enterprises must really meet the principles of Vietnamese origin, do not participate, join hands with acts of tax avoiding and trade frauds. In addition, businesses should always pay attention to the increasing demands of customers both in terms of products, services and other requirements, meeting the requirements of environmental protection in the new era, saying no to illegal timber.

In addition, wood enterprises need to link with each other to synchronously develop, from market research, human resource training to design, production and trade; take initiative in linking and harmonizing interests with forest growers; using digital tools, e-commerce... At the same time, businesses not only focus on exports but also domestic market, especially need to improve joint responsibility, jointly protect interests of the whole industry...

- Thank you, ma’am!

Reported by Tieu My – Translated by Ngoc Huynh

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Enterprises need to actively build links to exploit advantages from CPTPP

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