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Business opportunities to come from RCEP

Released at: 16:29, 06/11/2019

Business opportunities to come from RCEP

Photo: VGP

Minister of Industry and Trade Tran Tuan Anh spoke with Vietnam News about the RCEP on the sidelines of the 35th ASEAN Summit in Bangkok on November 4.

by Phi Linh

How significant is the conclusion of negotiations over the Regional Comprehensive Economic Partnership (RCEP)?

The conclusion of negotiations marks a very important milestone in the process of international economic integration of Vietnam in particular and of all countries participating in the RCEP in general, in the context of emerging trade protectionism that hinders globalization.

After nearly seven years of talks, we have this year witnessed major efforts by all parties, especially at the 28th negotiation session in Da Nang in September. I am very pleased that today all countries have completed negotiations and wrapped up most of the market-opening negotiations.

India has some unresolved issues, so it will continue to work with other countries to reach a consensus next year.

Member countries also agreed to soon conduct a legal review of the agreement’s wording to conduct signing procedures next year.

When the RCEP takes effect, it will create a market of about 3.5 billion consumers and approximately $49 trillion in GDP, accounting for about 39 per cent of global GDP, and will become the largest free trade area in the world with commitments on opening markets in the field of goods, services, and investment, and simplifying customs procedures and rules of origin to facilitate trade.

The agreement is expected to strongly promote the development of regional and global value chains, helping to further promote the economic development of ASEAN countries, including Vietnam and partner countries.

Particularly in the context of regional and international economies facing certain obstacles from trade protection, the successful negotiation of the agreement will contribute to the creation of a new trade structure in the region, helping push globalization towards liberalization and trade facilitation in a sustainable manner.

For Vietnam, after implementing the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) since January 2018 and signing the EU- Vietnam Free Trade Agreement (EVFTA) in June this year, the conclusion of the RCEP negotiations will open up more opportunities for local enterprises to boost exports, participate in new value chains in the region, and increase foreign investment.

What are the major challenges facing Vietnam and what was problematic in negotiating the agreement?

The RCEP negotiations have been one of the complicated trade negotiations ever. Before negotiations began, all countries agreed on the goal of achieving a comprehensive, high-quality free trade agreement that benefits all parties.

Among partners, there are those that have signed FTAs with each other, meaning that they have committed to opening their market for goods and services to a certain extent. ASEAN has signed FTAs with the six partners, but many countries have not signed FTAs with each other, such as India and China, and Australia, New Zealand, and Japan with South Korea. Therefore, all 16 countries achieving a common level of market opening is quite difficult.

In addition to the large scale of the agreement, levels of economic development among member countries are also different, even among ASEAN countries, while competition policy, investment, and intellectual property rights also differ. Therefore, during the negotiations, all parties sought to find solutions and at the same time harmonize the interests of all.

As an ASEAN member, Vietnam has worked closely with countries in the bloc to maintain the bloc’s leading role, both promoting negotiations and maximizing the protection of the interests of ASEAN countries, including Vietnam, in negotiating the RCEP.

With the aim of achieving a high-quality agreement with balanced benefits, Vietnam has actively participated in discussions and proposed flexible solutions in many regards to resolve problems between parties while ensuring national interests.

What will Vietnam prioritize in its role as ASEAN Chair in 2020?

Vietnam assumes the role of ASEAN Chair 2020 in the context of favorable global and regional economies. In addition to peace and cooperation, trade liberalization is still a major trend in the world, and new-generation free trade agreements such as the CPTPP and RCEP are being implemented or preparing for signing.

However, the global and regional economic context also has many challenges and potential risks, not only due to trade tensions but also political instability as well as unstable growth.

The wave of protectionism around the world has not shown any signs of abating and affects multilateral and regional economic cooperation. Strategic competition between major countries, such as between the US and China, makes it difficult for ASEAN’s development process.

In this context, in order to successfully assume the role of ASEAN Chair in 2020 in terms of economics, Vietnam needs have appropriate priority directions to make the most of favorable international conditions and at the same time overcome difficulties and challenges.

On that basis, the Ministry of Industry and Trade has set four priority orientations in the ASEAN Economic Community for 2020. The first is to promote strengthening economic integration through supporting the implementation of the Master Plan building the ASEAN Economic Community to 2025 and free trade agreements like the RCEP.

The second is to promote regional economic connectivity, improving adaptability, and taking advantage of the opportunities from Industry 4.0.

The third is to promote effective development towards an ASEAN economy that is not only dynamic and innovative but also effective and adaptive. And finally, trade facilitation must be promoted throughout ASEAN.

In line with these guidelines, as ASEAN Chair in 2020, Vietnam will have to shoulder the very important task of promoting the conclusion of negotiations for the remaining contents of the RCEP.

Vietnam has affirmed that it will continue to work closely with ASEAN countries in maintaining the leading role of the bloc and also work closely with the six partner countries to accelerate the early conclusion of the RCEP negotiations and quickly complete all legal reviews of the agreed content to prepare for the signing of the agreement.

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