Multilateral trade agreements such as the CPTPP are expected to further boost Vietnam’s investment and export driven growth model, according to the report, “Economic and Distributional Impacts of Comprehensive and Progressive Agreement for Trans-Pacific Partnership: The Case of Vietnam”.
“Even under conservative assumptions, the report estimates that CPTPP would increase Vietnam’s GDP by 1.1 percent by 2030.Assuming a modest boost to productivity, the estimated increase of GDP would amount to 3.5 percent from CPTPP,” according to Ousmane Dione, World Bank Country Director for Vietnam.
All income groups are expected to benefit from this new agreement, although higher-skilled workers in the top 60 percent of the income distribution may reap more.
In addition, the anticipated increase in FDI is expected to lead to a further expansion of services sectors and boost productivity growth. It will create opportunities for domestic private firms to integrate into global value chains and promote the development of the SME sector.
“The new agreement will bring direct benefits to Vietnam, from trade liberalization and improved market access. Most importantly, it will help stimulate and accelerate domestic reforms in many areas”, said Sebastian Eckardt, the World Bank Lead Economist for Vietnam
“Delivering commitments under the CPTPP will contribute in promoting transparency and supporting the creation of modern institutions in Vietnam”, Mr. Sebastian Eckardt noted.
The CPTPP is expected to stimulate reforms in areas such as competition, services (including financial services, telecommunications, and temporary entry of service providers), customs, e-commerce, environment, government procurement, intellectual property, investment, labor standards, legal issues, market access for goods, rules of origin, non-tariff measures, trade remedies etc.
The report is supported by the Australia - World Bank Group strategic partnership (ABP II) which supports Vietnam’s development agenda through technical assistance, capacity building, and analytical work.
“Together with the World Bank, we are committed to helping Vietnam take advantage of the substantial economic opportunities created through CPTPP”, said Australian Charge d’Affaires Rebecca Bryant.
“This includes assistance to enhance competitiveness, reduce trade barriers, and improve connectivity”, Ms. Rebecca Bryant emphasized.
CPTPP to usher in rich opportunities for Vietnam
According to economist Vo Tri Thanh, Chairman of the Vietnam National Committee for Asia Pacific Economic Cooperation (VNCPEC), the 11 member countries have committed to do their best to actualize the deal after the signing. It is likely that the CPTPP will take effect later this year or in early 2019 at the latest.
Dr Thanh said these desired results have had a welcome effect on integration, trade liberalization, and investment at a time when the rise of protectionism, populism and extremism are retarding the negotiation process.
The economist points out that the CPTPP is considered a successor to the previous TPP, which had 12 participating nations, including the US under which many nations have assured the irreversibility of the globalisation and integration process, thus delivering a lot of benefits to member countries and the world as a whole.
|Minister of Industry and Trade Tran Tuan Anh
The CPTPP continues to prove that the Asia-Pacific region should be at the forefront of the integration process and of trade liberalisation.
The Ministry of Industry and Trade says CPTPP is a high standard, new generation, and comprehensive FTA which covers traditional fields such as tariff reduction, the opening of the service market, intellectual property, and trade-related technical barriers, as well as dealing with non-traditional issues such as labour, the environment, government procurement, and state owned enterprises (SoEs).
In addition, the trade pact sets forth high standards requirements for transparency and a legally-binding mechanism for dispute settlement. Regarding the opening of markets, participating nations have agreed to eliminate almost all import taxes under the roadmap, and service and investment liberalization on the basis of complying with the existing laws of the resident country. There should be ensured state management in order to offer new trade opportunities for businesses and new benefits for consumers in member nations, including Vietnam.
Talking to the media, Minister of Industry and Trade Tran Tuan Anh has affirmed that the CPTPP will bring a lot of benefits to the Vietnamese economy. The trade deal is said to put great pressure on competition for both businesses and the national economy, which is considered a condition for Vietnam to achieve sustainable growth.