This is a “new generation” agreement that has the greatest impact on the global economy in the 22-year history of the World Trade Organization. The agreement stretches across the Asia-Pacific with 11 countries on three continents, with a market of more than 500 million people.
In Nov, 2018, Vietnam officially officially participated in negotiations after the United States entered into negotiations in March of the same year on trade and financial services liberalization.
On Jan 1, 2011 the TPP-Trans-Pacific Partnership Agreement was formally announced by APEC leaders from 12 member countries in Honolulu.
After several negotiations, the agreement was signed on February 4, 2016 in New Zealand. After two years, the Agreement was supposed to officially come into force, but US President Donald Trump decided to leave the Agreement in November 2017 at the APEC Conference in Da Nang - Vietnam.
The TPP was re-discussed and renamed CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) with 11 participating countries, of which Vietnam and Japan are the most active members.
This is the most comprehensive free-trade agreement. Not only does it deal with economic and trade issues but also social issues, governance and the environment.
Issues such as tariff reduction, technical barriers, origin of goods and intellectual property have been addressed, particularly in terms of food safety, financial regulation, transparency and anti-corruption. ...
The agreement has strict regulations on the trade of rare animals, over fishing in the sea, violation of government procurement regulations…
Member countries are obliged to strictly comply with the provisions of the International Labor Organization (ILO). Making workers immediately become debtors before taking the job, keeping their degrees or claiming their money of course violate the CPTPP.
It is remarkable that in CPTPP there is a special court. Economic corporations can bring lawsuits against each other, even bringing the government to court for compensation if those countries make unlawful technical regulations or barriers, which is against the purpose of the CPTPP.
Many clauses of CPTPP must be "suspended" due to the withdrawal of the United States. But there are also new opportunities for the US to join.
For Vietnam, this agreement will certainly have a comprehensive impact on the economy and society. Vietnam will sell more goods in the 10 member countries because tariff lines will be reduced or eliminated. In addition, Vietnamese people will have the chance to buy cheaper goods with higher quality. In shorts, there are more options available.
However, the expansion of the market is also a challenge for Vietnamese businesses if the goods are not competitive. At present, the development and quality of Vietnam's economy is the lowest among the member countries, so we will benefit the most and also be most vulnerable.
According to the World Bank, Vietnam’s GDP can increase by 1.1%. If labor productivity is improved, it can grow by 3% by 2030 thanks to CPTPP. This is really a driving force for the integration process of Vietnam, in line with the globalization trend that Vietnam has been actively followed.
Indeed, protectionism will be difficult to sustain. Globalization is an indispensable trend when a company in the United States or the United Kingdom can have more information about Vietnamese citizens including their hobbies and habits than the Vietnamese government does.
The door has been opened and there we are facing the ocean. It is the Vietnamese businesses themselves that decide whether they can be the key player in the game or not.
The most important thing is that we have to insightfully understand our partners as “Know thy self, know thy enemy. A thousand battles, a thousand victories“. VietnamCredit is proud to contribute a small part to this front by providing accurate and reliable information on CPTPP's trading partners.
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Le Hoang Thao - VietnamCredit