The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is expected to help raise Vietnam’s gross domestic product (GDP) by 1.3%, according to an official of the Ministry of Planning and Investment (MPI).
The number may amount to 2.1% if there are opener policies for services, Tran Toan Thang from the MPI’s National Centre of Socio-Economic Information and Forecast (NICF) said in an interview with the Vietnam News Agency.
Under the agreement, Vietnam will find it easier to access markets with lower tariffs as well as markets with which Vietnam has yet to sign free trade agreements like Canada, Mexico and Peru, he said.
Thang cited NICF’s forecast that export will rise about 4% while import will expand close to 3.8%.
He said garment-textile and leather-footwear will benefit most from the deal, with export of the garment-textile sector projected to increase from 8.3-10.8% as the result of price competition.
The agreement will also help light and labour-intensive industries grow 4-5%, and their export climb 8.7-9.6%, Thang added.
Moreover, the inflows of foreign direct investment (FDI) in Vietnam will spur the development of the support industry in the country, thus reducing its trade deficit with China.
On the contrary, due to impacts of the CPTPP, such sectors as husbandry, food processing and insurance services may grow slowly, he said, noting that with its weak competitiveness, the husbandry sector will be affected most.
The agreement will lead to fierce competition at home and in other member countries at the levels of product, business and country, Thang said, suggesting firms learn more about the deal to optimise its advantages.
If domestic enterprises fail to bring into full play export opportunities, they will suffer from adverse impacts on export, he said.
The 11-member CPTPP officially came into force on December 30, 2018. It will cut tariffs on agricultural and industrial products, ease investment regulations and enhance protection of intellectual property.
It is one of the most comprehensive trade deals ever concluded and strips 98% of tariffs for the 11 countries with a combined GDP of more than US$13.5 trillion and close to 500 million consumers.
The agreement is expected to promote economic growth and poverty reduction, create more jobs and improve the living condition for the people at member nations.
The trade deal was signed by 11 member states, namely Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam in Santiago in March 2018.