Companies yet to exploit trans-Pacific trade deal
Companies yet to exploit trans-Pacific trade deal
A two-year-old trans-Pacific trade deal has seen some growth in Vietnam’s exports to other member countries, but its firms are admittedly yet to take full advantage.
Workers at a footwear factory in Hanoi. Photo by Reuters.
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Vietnam’s exports to the six other countries that have ratified the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) agreement, Canada, Australia, Japan, Mexico, New Zealand, and Singapore, had been worth $34.3 billion in 2019 after rising by 8.1 percent from the previous year.
They remained at $34 billion in 2020 despite the severe impact of the Covid-19 pandemic, showing Vietnam’s trade has indeed benefited from the agreement.
Phan Thi Thanh Xuan, vice chairwoman of the Vietnam Leather and Footwear Association, said leather and footwear exports to CPTTP member countries jumped 13 percent in the last two years, with Canada and Mexico becoming two new markets.
"Instead of exporting to a third country and re-exporting to Mexico and Canada, Vietnam’s leather and footwear products can now be shipped directly to the two countries thanks to the CPTTP," she said.
But Nguyen Cam Trang, deputy director of the Ministry of Industry and Trade’s Agency of Foreign Trade, said Vietnam has not taken full advantage of the CPTTP, pointing out that exports to the other 10 member countries had only risen by 7.2 percent in 2019 while overall exports had grown by 8.4 percent.
Most exportersdo not know about the tariff benefits the trade deal offered them, she said.
Nguyen Thi Thu Trang, director of the Vietnam Chamber of Commerce and Industry's WTO and Integration Centre, said: "Only one out of four companies said it knows exactly what the CPTTP is and the benefit it brings. And the majority of firms which understand the CPTTP are foreign-owned."
Phan Thong, CEO of the logistics firm TransAZ, said: "Most of our customers know little about the CPTTP, and so have not exported to other member countries."
Xuan said to go global Vietnamese enterprises need to know well about the trade agreements.
The CPTPP came into force in Vietnam in January 2019.
It has been estimated that the trade pact, whose members account for 13.5 percent of global GDP or around $10 trillion, will add 1.32 percent to Vietnam’s GDP and 4.04 percent to its exportsby 2035 and create 20,000-26,000 jobs, according to the trade ministry.
