Vietnam has become the seventh member country to enforce the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) as of today.
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Since Vietnam sent its notification to New Zealand on November 15, 2018, the CPTPP has become effective for Vietnam on January 14, 2019.
Before Vietnam, the CPTPP had been ratified and come into force for other six countries, including Mexico, Japan, Singapore, New Zealand, Canada and Australia.
The National Center for Socio-Economic Information and Forecast (NCIF) under Vietnam's Ministry of Planning and Investment expected the CPTPP would boost Vietnam’s GDP by US$1.7 billion and over US$4billion in exports, equivalent to additional growth of 1.32% and 4.04% till 2035, respectively.
More importantly, the upcoming wave of FDI investment to Vietnam would help the country transform its support industry, which is one of the priority fields for investment. As a result, Vietnam’s trade deficit with China is expected to narrow as FDI enterprises could produce parts and components right in Vietnam.
Ngo Chung Khanh, deputy director of Multilateral Trade Policy Department of the Ministry of Industry and Trade, said the CPTPP’s biggest benefit for Vietnam would be institutional reform, instead of market expansion.
In the coming time, Vietnam would revise seven laws and dozens of decrees, especially in fields of services and investment, in a bid to ensure their compatibility with the agreement.
Sharing the same view, economist Vo Tri Thanh considered institutional reform Vietnam the number one priority as Vietnam starts grasping opportunities from the CPTPP.
According to Thanh, Vietnam has been undergoing administrative reform, but the result has left much to be desired for greater transparency and responsiveness of the legal system, while there has not been a substantial improvement of the business and investment environments.
Vietnam’s President Nguyen Phu Trong at a hearing held by the National Assembly last November said the country’s participation in the CPTPP would ensure its core interests and benefits.
Additionally, Vietnam is showing its strong commitment to global economic integration, at the same time cementing Vietnam’s growing influence in the Southeast Asia and in the Asia-Pacific, he added.
The 11-nations deal covers economies representing around 13% of global economic output, including third largest economy Japan, and 500 million people. It includes cuts to tariff and non-tariff barriers among its members and is designed around high standards on human rights, labor practices, and environmental standards.
In addition to Vietnam, country members of the CPTPP include Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Singapore, New Zealand, Peru.
