Seafood is one of Vietnam's key export products. Domestic enterprises must actively adapt and turn challenges into opportunities to improve competitiveness in domestic and foreign markets. (Photo: VNA) This is a free trade agreement signed by 10 ASEAN member countries andfive partner countries – Japan, the Republic of Korea, China, Australia and NewZealand – on November 15, 2020. RCEP came into effect on January 1, 2022.
Many RCEP member countries are the owners and suppliers of major strategic rawmaterials in the world, such as China, the Republic of Korea and ASEANcountries.
They are also the leading important trading partners of Vietnam like China,South Korea, and Japan, with the total trade turnover accounting for more thanhalf of the national trade revenue.
RCEP will form the world's largest free trade area with 2.2 billion consumers,accounting for about a third of the world's population and global GDP.
Strong commitments to opening the market for goods, services and investment anda common rule on origin for the 15 RCEP countries will be favourable conditionsfor forming and developing new supply chains in the region with theparticipation of the Vietnamese business community.
"These will be an important foundation to create favourable conditions forVietnamese industries and businesses in diversifying input materials to improveproductivity, quality and competitiveness. They will help promote exports andthe country's socio-economic development," said Minister of Industry andTrade Nguyen Hong Dien.
However, there are also many difficulties and challenges because the regionaleconomies are competitive, even in fields where Vietnam has strengths.
Therefore, domestic enterprises must actively adapt and turn challenges intoopportunities to improve competitiveness in domestic and foreign markets.
Dang Phuc Nguyen, general secretary of the Vietnam Fruit and VegetableAssociation, said vegetables and fruits exported or imported among RCEPmembers must be under quotas or the signed protocol.
For example, Vietnam is only allowed to officially export 10 fruit andvegetable products to China, including dragon fruit, mango, jackfruit,rambutan, lychee, mangosteen, and watermelon, banana, longan and blackjelly.
Other Vietnamese fruit and vegetable products are undergoing long negotiationsfor export approval to China, including durian, passion fruit, sweet potato,lemon, grapefruit and avocado.
According to Nguyen, from January 2022 to now, China has implemented "ZeroCOVID," including a strict inspection policy for food, agriculturalproducts and vegetables exported from all countries to China, including Vietnam.
This has made Vietnamese fruits and vegetables stagnant at the border gates,causing much damage to enterprises and farmers of Vietnam.
Tran Thi Lan Anh, general secretary of the Vietnam Chamber of Commerce andIndustry (VCCI), said that despite being affected by COVID-19, Vietnam sawimpressive growth in exports partly due to the new generation FTAs, especiallyRCEP.
According to Lan Anh, the agreement significantly impacts Vietnamese businessesbecause RCEP partners are the suppliers of about 70% of Vietnam's importsand the market for nearly 40% of Vietnam’s exports. This is also the regionwith many global value chains and the largest sources of FDI in the economy.
The agreement is expected to open up integration opportunities for businesses.On the other hand, with many partners whose economic structure competesdirectly with Vietnam, RCEP also poses significant competitive challenges.
Among the FTAs Vietnam has signed, RCEP forces Vietnamese businesses to facemany of the strongest competitors simultaneously.
Many economies in RCEP have a similar structure to Vietnam, while theirexperience, capital and competitiveness are better. The challenge of thisagreement for Vietnamese enterprises is not only in the domestic market butalso in export markets.
In the domestic market, with the commitments to open up in RCEP, similar goodsfrom RCEP members, especially from China and ASEAN, will enjoy more taxincentives when imported into the Vietnamese market. This competitive pressureis forecast to be more intense in the future.
To overcome these difficulties, Lan Anh recommends businesses actively explorethe agreement's commitments to make the most of opportunities from RCEP or dealwith challenges.
In addition, enterprises must improve their competitiveness to survive anddevelop in the context of increasing economic integration.
Dien said there were many unprecedented global challenges in the past two yearsdue to the pandemic.
However, Vietnam has gradually overcome the difficulties and achieved positiveresults in various fields partly due to taking advantage of opportunities andadvantages from the FTAs that Vietnam has signed to diversify the export marketand products. So far, Vietnam has signed 17 FTAs with most of the world'smajor economies, including RCEP.
In 2021, Vietnam, for the first time, gained an annual growth of 23% in tradevalue to 670 billion USD, bringing it to the 20 leading economies in terms ofinternational trade.
The export value had high growth of 19%. Vietnam also gained a tradesurplus of 4 billion USD for the sixth straight year./.
VNA
