Hanoi (VNA) – The Comprehensive andProgressive Agreement for Trans-Pacific Partnership (CPTPP) officially cameinto force in Vietnam on January 14, promising to open up opportunities formany industries to boost exports, but also posing challenges for businesseswhich require them to devise long-term strategies to increase theircompetitiveness in the global market.

With 11 member countries, the CPTPP accounts for13.4 percent of the global GDP and will be the third biggest economic bloc inthe world, only after the North American Free Trade Agreement (NAFTA) and theEuropean Union (EU). 

In terms of commitment, the CPTPP has beenevaluated by experts as the most forward-thinking and wide-ranging cooperationagreement at this time.

Le Dang Doanh, a member of the UN Committee forDevelopment Policy, said the CPTPP is a new stride for Vietnam in internationaleconomic integration.

The participation in the deal will help Vietnammultilateralise its economic and trade relations, and avoid risks from beingtoo dependent on several major markets.

Tran Quoc Khanh, Deputy Minister of Industry andTrade, said the CPTPP will create opportunities for wood and timber productexporters. 

Vice Chairman of the Vietnam Leather, Footwear,and Handbag Association (LEFASO) Diep Thanh Kiet said the deal as well as asother new-generation free trade agreements not only create advantages in tariffpreferences, but also greatly benefit the Vietnamese economy in general, and itsleather and footwear industry in particular, by promoting institutional reformsto boost business development. 

For their part, Vietnamese firms have beenaccelerating preparations to optimise opportunities to expand exports. 

Tran Huu Phuoc, Finance Director of Tran HiepThanh Textile JSC, said his firm is building a garment-textile factory wortharound 1 trillion VND (42.9 million USD).

Pham Xuan Hong, Chairman of the Ho Chi Minh CityAssociation of Garments and Textiles, Embroidery, and Knitwear, said Vietnamesegarment-textile products that meet CPTPP technical standards will enjoy zeropercent tariff. 

Businesses in the association are pushing ahead with human resources trainingand technological reforms to maximise on opportunities from the pact. Theyare also opening training courses for workers to better meet requirements onthe quality of products in the upcoming orders, Hong added.

Nguyen Van Thoi, Chairman of TNG Investment andTrade JSC - the biggest garment-textile company in the northern province ofThai Nguyen – said that his firm started preparations to meet CPTPP standardsfive years ago, meaning it now stands ready to ensure the majority of thedeal’s requirements.

The company also mapped out plans to shift toimporting materials from intra-bloc countries and build its own materialproduction plant instead of importing from countries that do not enjoy CPTPP incentives.

Alongside the business community, multiplelocalities have also made essential preparations to effectively implement theagreement.

Vice Chairman of the People’s Committee ofnorthern Vinh Phuc province Le Duy Thanh said his province has builtresolutions and put forth solutions to support businesses and create theoptimal environment for businesses.

Nguyen Thi Thu Trang, Director of the WTOIntegration Centre under the Vietnam Chamber of Commerce and Industry (VCCI),suggested the Government, ministries, localities, and business associationspromote the provision of information on the CPTPP for businesses and individuals.

Businesses themselves should proactively seekinformation on commitments relevant to their sectors and most importantly focuson improving their competitiveness, she said.

Huynh Van Hanh, Vice Chairman of the Handicraftand Wood Industry Association of Ho Chi Minh City, said that besides meetingrequirements on the origin of products and social responsibility, businessesshould also be ready for competition with foreign investors.

The Government is scheduled to promulgate anaction programme for the smooth and effective enforcement of the deal.

Businesses should exert more efforts to turnchallenges into motivations in reforming technologies, reducing production costs,and increasing the quality of products and their competitive edge, all as ameans to expanding cooperation with foreign partners to get deeper involved inthe global supply chain.

Earlier, the CPTPP officially came into force onDecember 30, 2018 in Mexico, Japan, Singapore, New Zealand, Canada, and Australia,the first six countries to ratify the pact. 

The pact was signed by 11 member states, namelyAustralia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru,Singapore, and Vietnam in March 2018.–VNA