CPTPP intrigued barrier removal – enterprises should take their chance

Update: 09-05-2018 | 11:56:12

One of the greatest challenges for enterprises as Vietnam joins free trade agreements (FTAs), not to mentioned the brought about benefits, is to sell their products to the market. This requires them to satisfy the strict legal requirements of importers regarding product quality, chemical management, environment management and social responsibility.

Production line of Thai Binh Shoes Corporation. Photo: Phuong Le

Enterprises should thoroughly know FTAs regulations

Experts believe that Vietnam is into the new generation of FTA having the highest requirements that Vietnam has been in – the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) which not only taps the barrier cuts against cargoes, service market expansion, intellectual properties, trade-related technical barriers, etc. but also treats new issues of labor, environment, government purchases, and State-owned enterprises. CPTPP proposes the highest demands for transparency and binding and clear-cut resolution of disputes.

As for market opening, the participating countries agree to eliminate almost all import tariffs according to the roadmap; Services and investment liberalization on the basis of complying with the laws of the host country, ensuring the management of the State, thereby creating new business opportunities for businesses and new benefits for consumers. member countries, including Vietnam.

At the CPTPP propaganda conference organized by the Department of Industry and Trade in cooperation with the Department of Agriculture and Rural Development held in the morning of May 8, Pham Binh An, director of the Center for International Integration, Ho Chi Minh City, CPTPP is a relatively comprehensive agreement that covers the principles of trade, investment, intellectual property and many other principles. Therefore, the new agreement has created opportunities both for Vietnam to reform the investment environment, business in particular and institutional reform in general. When the United States has not yet joined the CPTPP, the commercial interests of Vietnamese businesses remain unclear, but it is only a matter of time before the United States returns to the CPTPP because it is not easy for the country to yield to the top position. Influence for another country. Businesses who want to take advantage of the opportunities provided by CPTPP now need to thoroughly understand the specific regulations that Vietnam has promised in CPTPP such as market access, labor, intellectual property, etc. as well as the trade facilitation that CPTPP brings.

Therefore, businesses need to quickly understand the provisions of the CPTPP. Enterprises should know the tariff reduction schedule for each commodity line, each market has FTA; Determine the origin of the goods, the materials and the method of calculating the origin; Changing the supply of raw materials to ensure strict control throughout the process. In addition, businesses need to invest in upgrading management, improving working conditions of employees, investing in environmental treatment, creating and managing books in accordance with standards.

According to many experts, integration is opening up the market, goods of other countries into Vietnam more but so far we have not formed trade barriers to support domestic enterprises. Importantly, Vietnam will have to open its doors to goods and services of its partners in the domestic market, which means that Vietnamese enterprises must compete more fiercely at home. Vietnam has the lowest development level among CPTPP members, the adaptability of Vietnamese enterprises to the market economy is so poor, the risk of failure of enterprises in the domestic market is will increase. Therefore, enterprises need to actively and opportunely take advantage of the opportunities and want to enjoy many benefits from CPTPP, they must meet strict requirements on conditions, commitments related to production activities. business. The next step is to improve the competitiveness of enterprises and export products.

Notably, economic experts said that there is still room for growth considering the internal efforts of Vietnamese enterprises, we have the potential to promote exports if we know to focus on improving the situation. In addition, businesses need to strengthen their capacity to participate in the global value chain because CPTPP will make Vietnam a destination of the global supply chain. At the same time, enterprises should cooperate and coordinate with each other to take advantage of each unit's advantages; Create a more efficient and effective supply chain in the country. In addition, one of the challenges of the business is that when selling products to the market, the parties must meet the legal requirements of the importing country, such as requirements on product quality, environmental management, social responsibility.

To effectively make use of FTA advantages

The matter that businesses pay most attention to at the CPTPP dissemination conference is the origin of goods and customs procedures and tax policies when exporting to CPTPP member countries. According to Bui Kim Thuy, in charge of international economic integration of the Ministry of Industry and Trade, FTAs, especially CPTPP, bring many opportunities for Vietnamese enterprises. Vietnam will make full use of its trade advantage with its member countries, especially in markets such as Canada and Mexico. In the context of a number of countries expressing their wish to participate, such as South Korea, Thailand, Indonesia and the Philippines, it is expected to raise the interest of participants three times, equivalent to US$ 500 billion per year.

According to data released at the conference, the rate of utilization of preferential tariffs of Vietnam in 2017 into the market is not large. The largest is the ASEAN market, about 30%, equivalent to 6.5 billion; ACFTA is 26%, equivalent to $ 9.2 billion. This poses a problem for Vietnamese businesses as to why we do not enjoy much preferential tax rates. Experts claim that because we do not meet the eligibility criteria as regulated and the countries in the FTAs have applied safeguard duties and anti-dumping taxes.

Statistics from the Import-Export Department of the Ministry of Industry and Trade show that only 35% of Vietnam's exports are benefiting from the FTAs that Vietnam participates in. Thus, more than 60% of the remaining goods remain subject to MFN tariffs (preferential import tariff rates). Thuy said that one of the main reasons for domestic enterprises not to take advantage of FTA preferences is that they do not have full understanding of rules of origin, can not apply for preferential C / O, 0 to 5% tariffs provided by FTAs. In particular, the rules of origin in the FTA that Vietnam has done is basically relatively flexible but many businesses have not yet utilized well. With the new FTAs requiring high regulations, it will certainly be more difficult for domestic firms.

Economic experts say that more than ever, this is the time when domestic enterprises need to understand the provisions of the FTAs that Vietnam participates in applying for its business activities; Along with that, we need to make the most of the advantages of the FTA. If enterprises are not active, creative implementation of synchronous solutions to improve competitiveness, the goods of domestic enterprises will lose on the home.

Reported by Tieu My – Translated by Vi Bao

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CPTPP intrigued barrier removal – enterprises should take their chance

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