Prompt action needed to seize opportunities, navigate challenges under RCEPMonday, January 4,2021
AsemconnectVietnam - The recently-signed Regional Comprehensive Economic Partnership (RCEP) presents both opportunities and challenges to Vietnamese businesses, making prompt action crucial to address existing weaknesses and capitalise on deal-generated advantages.
It also marks a new step forward in Vietnam’s global economic integration, he said.
The RCEP gathers together the 10 ASEAN member states and five partners the bloc already has free trade agreements (FTAs) with: Australia, China, Japan, the Republic of Korea, and New Zealand. Once taking effect, it will create a market of 2.2 billion consumers and about 30 percent of global GDP, and become the world’s largest free trade area.
Under the deal, Vietnamese enterprises can further engage in regional value and production chains while benefiting from lower transaction costs and a friendlier business environment thanks to the harmonisation of current regulations in member countries, according to Thanh.
The agreement also poses challenges to agriculture, however, as Vietnamese produce will face greater export competition from other members.
Once the agreement comes into force, the country will become a major importer of agricultural products from RCEP countries, exposing companies to fierce competition right in the domestic market, he noted.
There is not much time left before the RCEP takes effect, he went on, so prompt and proactive measures are necessary to tap into the advantages generated and address any existing weaknesses.
Apart from the synchronous solutions taken by the Government, ministries, sectors, and localities, the proactiveness and activeness of businesses are also crucial in optimising the opportunities brought about by FTAs, Thanh added.
Luong Hoang Thai, Director of the Multilateral Trade Policy Department at the Ministry of Industry and Trade, said the RCEP has higher standards than commitments in the WTO.
Amid the COVID-19 pandemic, which has disrupted regional and global value chains, and emerging trade protectionism, the signing of the RCEP marks an important milestone in Vietnam and ASEAN’s economic integration and generates both short and long-term benefits, he noted.
It features commitments to opening up markets in the fields of goods, services, and investment; applying common rules of origin among the 15 members, instead of five sets of rules of origin under the five FTAs between ASEAN and each of its partners; and enhancing trade facilitation measures. This will create opportunities to develop new supply chains in the region that Vietnamese businesses can take part in.
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RCEP signing to take place online on November 14