Cptpp-final.pdf

Contents A. OVERVIEW .................................................................................................................... 2 I. FREE TRADE AGREEMENT ....................................................................................... 2 Overview of Free Trade Agreement ......................................................................... 2 Vietnam and Free Trade Agreement ........................................................................ 2 Reason to establish a new Free Trade Agreement ................................................... 2 II. COMPREHENSIVE AND PROGRESSIVE AGREEMENT FOR TRANSPACIFIC PARTNERSHIP (CPTPP)................................................................................. 3 Overview of CPTPP ................................................................................................. 3 Scope……………………….........................................................................................3 Timelime ................................................................................................................... 3 B. BODY ............................................................................................................................... 7 I. FOR ALL MEMBERS ....................................................................................................... 7 1.Benefits ..................................................................................................................... 7 2.Challenges ................................................................................................................ 9 II.FOR VIETNAM .............................................................................................................. 9 1. For economic growth .............................................................................................. 9 2. Opportunities and challenges for Vietnamese enterprises.................................... 10 3.Other FTAs that Vietnam participated in............................................................... 14 C. CONCLUSION ............................................................................................................. 16 D.REFERENCES ............................................................................................................... 18

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A. OVERVIEW

I. Free Trade Agreement Overview of Free Trade Agreement A free trade area is the region encompassing a trade bloc whose member countries have signed a free-trade agreement (FTA). Such agreements involve cooperation between at least two countries to reduce trade barriers - import quotas and tariffs - and to increase trade of goods and services with each other. FTA is different from customs union that members of a free trade area do not have a common external tariff, which means they have different quotas and customs taxes, as well as other policies with respect to non-members. To avoid tariff evasion (through reexportation) the countries use the system of certification of origin most commonly called rules of origin, where there is a requirement for the minimum extent of local material inputs and local transformations adding value to the goods. Only goods that meet these minimum requirements are entitled to the special treatment envisioned by the free trade area provisions. During the recent period, the number of FTA has been increased significantly. Since 1996, over 300 FTAs have been implemented worldwide. According to The Asian Development Bank, at the end of 2009, there were 56 FTAs signed by Asia countries. It showed a motivation to create a stronger trade area.

Vietnam and Free Trade Agreement Before 2007, Vietnam was involved in only two free trade deals as member of the Association of Southeast Asian Nations (ASEAN): the ASEAN-China and the ASEANRepublic of Korea (RoK) pacts. In November of 2007, Vietnam officially became a member of World Trade Organization. After that, the country signed several more deals, including those with Japan and Chile. Particularly, in 2015, Vietnam concluded negotiations with the US in the Trans-Pacific Partnership, with the EU on the Vietnam-EU free trade agreement and with Russia on the Vietnam- Eurasia Economic Union free trade agreement. The same year, the country concluded bilateral FTA talks with the RoK. Vietnam is one of the countries with the most FTAs in the world. It has signed a total of 17 trade deals, of which 10 have become effective, 2 have been signed but are yet to take effect, while negotiations have concluded on 2 deals and are on the way for three others.

Reason to establish a new Free Trade Agreement Although there were hundred FTA all around the world and nearly cover all aspects in economy, the world has been changing and the old FTAs show the lack of flexibility, updates to adopt new requirement in economic development. For example, the WTO has often been criticised for trade rules which are still unfavourable towards developing countries. Many developed countries went through a period of tariff protection; this enabled them to protect new, emerging domestic industries. WTO trade deals still encompass a lot of protectionism in areas like agriculture. Protectionist tariffs which primarily benefit richer nations, such as the EU and US. 2

Thus, it is demanded for a new free trade agreement helping development of emerging economy and small-medium businesses. In this case, CPTPP (initially known as TPP) was raised as a new generation of free trade agreement.

II. Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) Overview of CPTPP CPTPP stands for Comprehensive and Progressive Agreement for Trans-Pacific Partnership, it also known as TPP1. The CPTPP includes many of the elements that were negotiated as part of the Trans-Pacific Partnership (TPP), but with some significant differences. On 23 January 2018, negotiations concluded and the participants agreed to suspend 22 items from the original TPP agreement. CPTPP is a free trade agreement between 11 countries, those are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. At the time of signing, the eleven countries’ combined economies represented 13.4% of the global gross domestic product, approximately US$13.5 trillion, making the CPTPP the third largest free trade area in the world by GDP after the North American Free Trade Agreement and European Single Market.

Scope CPTPP took almost a decade of negotiating among countries and tt was also deep when the text comprised 30 chapters covering every aspect from labour standards to intellectual-property rights. CPTPP covers almost content of TPP excluded the terms approved by the US but objected by other countries before President Donald Trump decided to withdraw from the agreement. List of articles agreed in CPTPP is as following: -

Incorporation of the Trans-Pacific Partnership Agreement Suspension of the Application of Certain Provisions Entry into Force Withdrawal Accession Review of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership - Authentic Texts CPTPP covers a variety of aspects in Customs Administration and Trade Facilitation, Investment, Cross-Border Trade in Services, Financial Services, Telecommunications, Government Procurement, Intellectual Property, Environment, Transparency and AntiCorruption.

Timelime Chronology of the agreement 

2006 – Brunei, Chile, New Zealand and Singapore – signed the Trans-Pacific Strategic Economic Partnership Agreement (TPP) or P4. The P4 entered into force in 2006.

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       

2010 – Australia, Peru, Vietnam and the United States joined the TPP discussions, Malaysia entered later 2012 – Canada and Mexico joined 2013 – Japan joined 2016 – 12 countries signed the TPP document\ 2017 – United States pulled out of TPP January 2018 – 11 countries finished negotiations and finalized the text of the reformed CPTPP agreement March 2018 – Representatives from all 11 CPTPP countries met in Santiago, Chile to sign the agreement Each of the CPTPP parties are now undertaking their own respective domestic procedures for ratification and implementation.

Timeline of signature On 28 June 2018, Mexico became the first country to finish its domestic ratification procedure of the CPTPP, with President Enrique Peña Nieto stating, "With this new generation agreement, Mexico diversifies its economic relations with the world and demonstrates its commitment to openness and free trade." On 6 July 2018, Japan became the second country to ratify the agreement On 19 July 2018, Singapore became the third country to ratify the agreement and deposit its instrument of ratification On 17 October 2018, the Australian Federal Parliament passed relevant legislation through the Senate. The official ratification was deposited on 31 October 2018 On 25 October 2018, New Zealand ratified the CPTPP, increasing the number of countries that had formally ratified the agreement to four. Also on 25 October 2018, Canada passed and was granted royal assent on the enabling legislation. The official ratification was deposited on 29 October 2018 On 2 November 2018, the CPTPP and related documents were submitted to the National Assembly of Vietnam for ratification. On 12 November 2018, the National Assembly passed a resolution unanimously ratifying the CPTPP. The Vietnamese government officially notified New Zealand of its ratification on 15 November 2018. An overview of the legislative process in selected states is shown below: Signatory

Signature

8 March Mexico

Institution

Senate

Conclusion

A

date

B

24 April 2018

73

24

2018

Deposited

28 2018

Presidential

23 May 2018

Assent 4

Granted

June

Japan

8 March

House

of

2018

Representativ

18

May

2018

es

House

Majority

6

approval

2018

(Standing vote)

of

13

Councillors

June

2018

6 168

9

8 March no 2018 Singapore

July

19

parliamentary

July

2018

approval required

New

8 March

House

2018

Representativ 2018

Zealand

of 24

October

8

25

111

October

2018

es

Royal assent

25

October

Granted

16 ctober

44

2018

Canada

8 March

House

2018

Commons

of

2018

Senate

25

October

1

29 ctober

236

2018

Majority approval (Voice

2018

vote)

Royal assent

25

October

Granted

of 19 September

Majority

31 2018

2018

Australia

8 March

House

2018

Representativ 2018

approval

es

(Standing vote)

5

October

Senate

17

October

2018

Royal assent

19

3

1

3

5

October

Granted

0

2018

Vietnam

8

National

12 November

March

Assembly

2018

469

0

15 November 2018.

2018 (Wikipedia) On 30 December 2018, the agreement entered into force between Australia, Canada, Japan, Mexico, New Zealand, and Singapore. On 14 January 2019, the agreement starts to apply between existing members and Vietnam. On 1 January 2019, Australia, Canada, Mexico, New Zealand, and Singapore implemented a second round of tariff cuts. Japan’s second tariff cut will take place on 1 April 2019.

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B. BODY I. For all members 1. Benefits 1.1. Acessing to the new market- selling in more places CPTPP creates a market of nearly half a billion people, which is expected to be a place where businesses can compete and succeed on a level playing field. CPTPP member countries account for about 13.5% of global GDP. Highlights of 11 countries participating in CPTTP are rich member countries, GDP per capita is over USD 30,000; in which Canada is 45,077 USD, Australia is 55,707 USD, New Zealand is 41,593 USD, Singapore is 57,513 USD. This area is rich, high per capita income, Vietnam has the lowest per capita income (with 2,380 USD).CPTPP is considered as a model treaty for the 21st century because of its overwhelming scale and influence in comparison with other trade agreements regionally and globally. The CPTPP creates new market access for goods by eliminating duties and non-tariff barriers that often prevent imports from competing with domestically produced goods. It is expected that duties will be completely eliminated for a significant percentage of goods on the very first day of the agreement. For most of the remaining sensitive products, duties will be reduced over time. For example: INFO-COMMUNICATION TECHNOLOGY (ICT): Duties remain for many information-communication technology products that have been developed since 1997 despite global agreements to eliminate duties. Duties for more than 200 new categories are expected to be eliminated, provided origin criteria is met by CPTPP members. Every single part and component in electronics will also be tariff free.

1.1. Supporting an intergrated Asia Pacific Marketplace CPTPP allows companies to make products for all 11 markets without the need to change processes, parts, suppliers or components. Once an item qualifies under the rules of origin for CPTPP, it can be shipped from one CPTPP country into all 11 markets as the agreement has the same ROOs ( Reusable Object - Oriented Software ) for all members. Under the CPTPP, regional cumulation of rules of origin will be permitted so exporters can include materials, labor, parts and components from throughout the CPTPP to qualify for preferential duty rates or duty-free entry in other CPTPP markets.

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1.2. Modernizing clearance and reducing costs at the borders Under the CPTPP, regional cumulation of rules of origin will be permitted so exporters can include materials, labor, parts and components from throughout the CPTPP to qualify for preferential duty rates or duty-free entry in other CPTPP markets. Some key trade facilitating features available through the CTPP : Self Certification of Origin, Advanced Rulings , Time Guarantees for express shipments.

1.3. New opportunities in services Firms should find it easier to provide services across member countries in areas like banking, insurance, construction, logistics, accounting, travel & tourism, consulting, app and games development, and graphic design. The TPP includes rules to ensure market access, nondiscrimination, and fair competition for services from CPTPP parties.

1.4. Investment protection and guarantees The TPP investment chapter provides market access, national treatment, and investment protection and guarantees to facilitate cross-border investments. The TPP provide assurance on: Basic rights such as repatriation of funds and capital transfers • Fair compensation in case of expropriation. • Imposition of mandatory export performance or local content requirements • Legal recourse is available in the event of disputes. • Under very specific circumstances, investor-state dispute settlement is also available allowing investors to partake in third-party arbitration tribunals such as the International Convention for the Settlement of Investment Disputes (ICSID) or UNICTRA.

1.5. Protecting your intellectual property The TPP extends robust protection to intellectual property( patent, trademarks, Copyright and related rights) with commitments reinforcing and going beyond current commitments made through the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property (TRIPS), while making a shared commitment to Doha Declaration on TRIPS and Public Health.

1.6. Expanding the Digital Economy CPTPP countries have committed to critical disciplines facilitating the new digital economy. THESE INCLUDE: • A commitment to not impose duties, fees or other charges on digital products • Electronic authentication and recognition of electronic signatures • Online consumer protection • Access to and use of internet including benefit of competition among network providers • Cross-border information flows acknowledging the importance of personal information protection • Disciplines facilitating the use of cloud-computing services

1.7. Opportunities in government contract TPP commitments on government procurement ensure that procurement by governments is conducted in a fair, transparent, and nondiscriminatory manner. UNDER THE CPTPP: • Governments have committed to opening up their procurement markets for CPTPP goods and services contracts above a threshold.

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• Ensure procedures are made more transparent, making it easier for businesses to understand contracts that are available for tender, eligibility and criteria, and the application process. • Procedures are to include clear criteria for selection, notification of awards, and appeals policies.

1.8. Interlocking nature fits business fits of today and tomorrow With 30 chapters binding together the 11 members, this trade agreement actually fits business practices of today. It is also set up to accommodate changes in the economy for tomorrow without the need for complicated renegotiation. Once the agreement comes into force, it will expand with the addition of new members.

2. Challenges -

-

-

The CPTPP poses little to policy risk and minimal disadvantage for all countries entering it. Firstly, there will be an increase in competition through the opening of the market to offshore competitors. In addition to certain provisions being put in suspended status, the parties have yet to agree upon four parts of the agreement including state-owned enterprises related to Malaysia, commitments on coal relating to Brunei, dispute settlement involving trade sanctions for Vietnam and Canada’s cultural exception. The parties will need to come to agreement on these four provisions prior to signing. Moreover, each party will need to have domestic political support for CPTPP as it will require ratification of each party and this may require further changes. The CPTPP will affect some businesses in the region directly and some indirectly. There will also inevitably be some trade diversion to the TPP11/ CPTPP countries away from non-parties. But the results are likely to be that the GDP growth impact is far larger than the trade diversion impact. To the extent that the CPTPP further opens markets to healthy competition, it will challenge some businesses who currently hide behind various forms of protectionism.

II.For Vietnam 1. For economic growth 1.1. Opportunities ● The opportunities to increase the export of goods that are the advantages of Vietnam (i.e. textiles, footwear, electronic products and equipments) are relatively high by combining the tariff reduction and the experiences in these markets.T, the attraction of foreign investment into Vietnam is greatly promising.his advantage is very significant in markets where Vietnam has never had FTAs such as Canada, Mexico and Peru. Even the partners that Vietnam has FTAs such as Japan, Australia, New Zealand ... then CPTPP also creates new opportunities, new choices for Vietnamese exporters (enterprises) when approaching these markets. ● According to the research results of the Ministry of Planning and Investment, the CPTPP Agreement can help Vietnam's GDP and exports increase by 1.32% and 4.04% by 2035, respectively. It is possible to increase by 3.8%, lower than the rate of export growth, so the overall impact on the trade balance is favorable. ● CPTPP promotes domestic institutional reform, creating a transparent and transparent investment - business environment. 9

● Improve the level of economic development, thereby participating in higher valueadded production stages. ● The chances of faster economic growth are strongly wide. The expansion of the major export industries such as textiles, footwear, fishery, etc., will help stimulate the income growth from domestic production, thereby support the increase of the overall demand. ● Vietnam will have an opportunity to form a more comprehensive economic structure. CPTPP will urge the domestic investors as well as the regional ones to invest in the supporting industries to create local material resources given the extremely high standards on the place of origin. ● It is a chance to complete the institutions that govern the market economy. CPTPP sets out a clear legal framework for not accepting concessions to any business. Because of its high and foreseen requirements on policy transparency, compared to many other agreements, CPTPP could become one of the important premises for Vietnam to carry out institutional and market reforms thoroughly and comprehensively. ● Strengthening the role and position of Vietnam in both the region and the world because this is a concrete demonstration, a new step in the process of implementing independent, autonomous and multilateral relations of Vietnam

1.2. Challenges ● The production industry structure is not consistent with the provisions of CPTPP. The economy is not well-prepared and the supporting industry is weak. With regard to the requirements of origin, the sectors which are the advantages of Vietnam’s export sector are not able to exploit the concessions from the CPTPP because their inputs do not contain domestic factors. ● The stagnation of the enterprise system. The adaptability to the market economy of Vietnamese enterprises is weak. The lack of an effective investment strategy for the supporting production industry and “traditional outsourcing” works have made the overall benefit of the economy declined. ● the requirements of intellectual property protection in CPTPP is much more critical. the requirements for increasing the level of protection of intellectual property rights over inventions, copyrights, and trade marks can lead to the escalation of drug prices and create a health burden to the emerging economy like Vietnam.The prices of agricultural products such as veterinary drugs, fertilizer, etc. will thereby grow significantly, which increases costs and reduces the efficiency of agricultural production in general. ● Create a huge competitive pressure on the market.

2. Opportunities and challenges for Vietnamese enterprises. The participation in the CPTPP Agreement brings many opportunities, but also many challenges for Vietnam: although the Agreement will promote the development of the economy, increase exports and attract more foreign investment but our country is one of the least developed country, with low production and business capacity, low competitiveness. Therefore, enterprises need to identify opportunities and challenges to create progress for the economy of home country, if only awareness but not action is not effective. Opportunities and challenges of Vietnamese enterprises in CPTPP always go hand in hand, if Vietnamese 10

enterprises are not prepared and ready to act, the opportunity will immediately turn into challenges.

2.1.

Opportunities

With the Agreement on tax incentives, institutional reforms and intellectual property, Vietnamese firms will be able to expand their export markets to some of the world’s largest market (500 million people), as well as boost exports of high-value processed produce, making it easier to join the global supply chain. Vietnam for the first time pledged to cut 100% of tariff lines, commit to public procurement, and commit to the state-owned enterprise sector, allowing workers to establish workers' organizations not necessarily. directly under the Vietnam General Confederation of Labor. In particular, for the first time committed to protecting intellectual property rights in the Trips + standard, and many other important commitments. According to Pham Quynh Mai, Deputy Head of Multilateral Trade Policy Department under the Ministry of Industry and Trade, the CPTPP is a high standard agreement with many commitments to implement, forcing businesses to learn more about the commitments in the agreement.

2.2.

Challenges

The biggest challenge now for Vietnamese enterprises is to identify the challenges and opportunities of CPT integration for the business itself. Because if not fully aware, businesses cannot innovate themselves, have vision and methods to cope with changes. Small and medium enterprises will be greatly affected when foreign enterprises' goods penetrate the domestic market. The ability of Vietnamese enterprises to adapt to a market economy is still poor, so challenges and difficulties at home country are also high. It is also a challenge related to competitiveness, governance, transparency, information technology, intellectual property and human resources. In addition, these agreements add to the pressure to ensure the requirements of internal mission and protection of intellectual property rights; pressure to reduce taxes, shift and erode tax bases; pressure to overcome technical barriers and sanitary and phytosanitary systems.

2.3.

What Vietnamese enterprises should do?

First and foremost, Vietnamese enterprises need to identify opportunities and challenges to make progress for their home economies, and to take action, if only awareness is not enough. Businesses need to know the rules related to their business and find ways to meet those requirements. Regulations on export goods are increasingly strict, in addition to quality standards, they must meet the rules of origin of goods. For example, when Vietnam exports seafood, it not only ensures that it is a clean product, but also ensures that the fishing process and the legality of the catched sea must meet the requirements of the environment. In order to take advantage of opportunities from CPTPP, the domestic business sector must build a long-term strategy, improve the capacity of goods penetration and business development outside by improving technology, managing product quality international standards with competitive prices, integrated into global supply chains; At the same time, it 11

is necessary to improve the defense capacity against the penetration of goods and the competition with foreign enterprises through promoting production links, building a solid domestic distribution network. More specific, domestic firms improve corporate governance, technical process, and marketing.

2.4.

The groups and sectors will be affected most from CPTPP

The participation in CPTPP will help Vietnam increase GDP by attracting investment and trade with CPTPP member countries; speeding up export development; developing high quality human resources as well as unskilled labor through labor exchange and export ... With greater involvement in value chains through cooperation and cooperation with enterprises in the recovery of CPTPP, Vietnamese brands also have the opportunity to rise and reach out. a. Positive impact First, the export sector will benefit directly when tariffs are cut after signing CPTPP. Prominent are groups of seafood, garment, footwear, electronics assembly ... The signing of CPTPP will create conditions for domestic enterprises to expand their markets and boost their potential. The fisheries sector is better when the CPTPP countries annually import about 2 billion USD of goods, equivalent to 23% of the total turnover. In particular, the Japanese market alone accounts for over 15%. With this market, the exporters of shrimp and octopus will benefit the most. According to Vietnam Textile and Apparel Association, CPTPP will help Vietnam boost export growth as well as change the export market structure in a more balanced manner. Certainly, CPTPP will bring many prospects when the tax rate is 0%, helping Vietnam's textile and garment industry expand its market share in some countries with high tax rates such as Canada, New Zealand, Australia ... Like textile and garment, CPTPP is an opportunity for leather and shoe exporters to increase their proportion, increase export opportunities to countries such as Chile, Australia, New Zealand, Mexico, Canada ... Japan alone, one of the main markets force of Vietnam's export of footwear and handbags with an average growth rate of 20-35% / year, if enterprises know how to make full use of terms from CPTPP, this growth rate will be higher than the current. Or Canada, imposing a 0% import tax on both leather shoes and handbags immediately without a roadmap is also a good opportunity for Vietnamese businesses to participate more deeply in this market. Secondly, for enterprises in the logistics sector, strengthening trade liberalization will promote transportation between countries in the group. Since then, maritime and airline operations have been boosted when trade between countries has increased. Third, the possibility of foreign capital inflows will flow into the Vietnamese economy more, leading to new construction or industrial parks to serve production. Thanks to this movement, the infrastructure business group will have a development momentum in the medium and long term. b. The sectors face challenges 12

However, besides the opportunity to bring, CPTPP is a challenge for industry groups to serve domestic consumption needs with large import turnover from the countries participating in the agreement such as the household sector, cereal ... 23 export sectors of Vietnam will have the largest net reduction will be agriculture (- 1.6 billion USD), other industrial production (- 1.2 billion USD), electrical equipment (- 0.5 billion USD), metal (- 0.4 billion USD). The agricultural, dairy, sugar and feed industries will face greater competitive pressure as supplies from Australia and New Zealand will enter the Vietnamese market. The spread of imported meat products in better quality market has also made it difficult for domestic manufacturing enterprises. In addition, the pharmaceutical market will be more competitive when the import tax rate decreases and the protection period for long copyright drugs. By the end of 2017, Vietnam imported 2.8 billion USD of pharmaceutical products and the possibility will continue to increase when CPTPP is signed. In 11 participating countries, Japan, Canada and Mexico are among the top 20 pharmaceutical producing countries in the world. Besides, there is also supply from Korea, China and India when Vietnam has signed bilateral and multilateral FTAs. For the financial sector, financial institutions from Japan, Canada and Australia are now able to sell their financial services products to Vietnam without having to set up a branch here. This may create new pressure for domestic banks. Although the foundation of some major banks has improved and government support, in general, the competitiveness of Vietnam's financial system remains weak.

2.5.

Vietnamese businesses’ awareness on CPTPP

The Ministry of Industry and Trade's report shows that over 86% of businesses know CPTPP through mass media. They only have a general grasp of this agreement, unclear about specific terms and contents. Enterprises do not seem to be ready for international integration, yet do not understand how CPTPP will affect production and business activities. Large enterprises, with foreign investment, have better prepared research than domestic enterprises, small and medium enterprises. In particular, small and medium-sized enterprises have almost no specific plans and strategies to be willing to participate. When asked in-depth, manufacturing enterprises for the domestic market think that participation in CPTPP is not related to them. Even those enterprises that participate in export also find these commitments have not come immediately but need time so they have not invested in serious research. We think this is a passive, waiting thought from the state management agencies, from the top of businesses. This needs to change early in the general market entry and participation in the CPTPP Agreement. The majority of 63 per cent of businesses in Vietnam believe the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) trade agreement signed today will have a positive impact on their business, according to the new data from HSBC’s comprehensive survey of global businesses. Of 1,150 firms based in CPTPP member countries surveyed by HSBC, almost half (46 per cent) expect to see positive benefits. Out of 11 countries signing the CPTPP agreement

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today, six are covered in the survey: Australia, Canada, Malaysia, Mexico, Singapore and Vietnam. However, the information about the level of Vietnamese businesses’ awareness on CPTPP is very rare, obscure, there are many surveys that are currently being conducted and the results have not been completed, making it difficult to gather information. In addition, surveys were conducted on a small scale, not yet agreed and organized. The government needs to take actions to disseminate the information of CPTPP to businesses, so that they understand, plan long-term and actively participate in

3. Other FTAs that Vietnam participated in Currently, Vietnam is one of the most participating countries in FTAs in the world, with 17 FTAs. A part from CPTPP and TPP, there are 15 other FTAs that Vietnam joined: No.

FTA

Status

Partners

FTAs in effect 1

AFTA

ASEAN Free Trade Area

Entered into force in 1993

ASEAN

2

ACFTA

ASEAN-China Free Trade Area

Entered into force in 2003

ASEAN, China

3

AKFTA

ASEAN-Korea Free Trade Agreement

Entered into force in 2007 Entered into force in 2008

ASEAN, Japan

Entered into force in 2009

Vietnam, Japan

Entered into force in 2010

ASEAN,India

4

AJCEP

ASEAN-Japan Comprehensive Economic Partnership Agreement

5

VJEPA

Vietnam Japan Economic Partnership Agreement

6

AIFTA

ASEAN-India Free Trade Area

14

ASEAN, Korea

7 AANZFTA

ASEAN Australia New Zealand Free Trade Area

Entered into force in 2010

ASEAN, Australia, New Zealand

8

Vietnam-Chile Free Trade Agreement

Entered into force in 2014

Vietnam, Chile

Vietnam-Korea Free Trade Agreement

Entered into force in 2015

Vietnam, Korea

9 10

VCFTA VKFTA VN – EAEU

Vietnam-Eurasia Economic Union Free Trade Agreement

Entered into force in 2016

FTA

Vietnam, Russia, Belarus, Armenia, Kazakhstan, Kyrgyzstan

FTAs signed but have yet entered into force 11

AHKFTA

ASEAN-Hongkong Free Trade Agreement

Signed in November 2017

ASEAN, Hongkong (China)

FTAs negotiated but are yet signed 12

EVFTA

EU-Vietnam Free Trade Agreement

Negotiations ended in February 2016

Vietnam, 28 members of EU

Negotiating FTAs 13

RCEP

14

VN – EFTA FTA

15

VN – Israel FTA

Regional Comprehensive Economic Partnership

Vietnam-European Free Trade Association Free Trade Agreement

Vietnam-Israel Free Trade Agreement

Negotiations launched in March 2013

ASEAN, China, Korea, Japan, India, Australia, New Zealand

Negotiations launched in May 2012

Vietnam, EFTA (Switzerland, Norway, Iceland, Liechtenstein)

Negotiations launched December 2015

Vietnam, Israel in

Joining FTAs has contributed to raising Vietnamese exports. From only $5.4 billion in 1995 and $14 billion in 2000, exports climbed to $48 billion in 2007 and US$ 213 billion in 2017. It is not denied that FTAs have brought many benefits to Vietnam. Typically, for the Textile and Garment sector, when exporting to the US market, if Vietnam was not a WTO member, the tariff on finished garments would be 150% higher than those of WTO members, If being a WTO member, the tariff shall be 25% average. If there is an FTA with the United States, the tariff shall reduce to 0-5% compared to 25%. 15

In addition, FTAs offer many other benefits, notably ensuring equal accessibility. In FTAs, especially new-generation FTAs, are very interested in equality. This requires that the State has to create equality in the domestic market, between state-owned enterprises and privateowned enterprise, thereby assisting private enterprises to access resources more equally. FTAs also help Vietnam improve its infrastructure, attract more investment capital; accelerate administrative reform; abolish barriers for the market access.

C. CONCLUSION 16

To sum up, Vietnam is now considered the “big winner” from FTAs. FTAs, including CPTPP, create new opportunities, new choices for Vietnamese exporters (enterprises) when approaching foreign markets. Joining FTAs helps strengthening the role and position of Vietnam in both the region and the world because this is a concrete demonstration, a new step in the process of implementing independent, autonomous and multilateral relations of Vietnam. The participation in CPTPP will help Vietnam increase GDP by attracting investment and trade with CPTPP member countries; speeding up export development; developing high quality human resources as well as unskilled labor through labor exchange and export ... With greater involvement in value chains through cooperation and cooperation with enterprises in the recovery of CPTPP, Vietnamese brands also have the opportunity to rise and reach out. However, opportunities come with challenges. Vietnam’s economy is not well-prepared and the supporting industry is weak. There is a lack of adaptability and an effective investment strategy for the supporting production industry and “traditional outsourcing” works. The biggest challenge now for Vietnamese enterprises is to identify the challenges and opportunities of CPT integration for the business itself. Because if not fully aware, businesses cannot innovate themselves, have vision and methods to cope with changes. Small and medium enterprises will be greatly affected when foreign enterprises' goods penetrate the domestic market. The ability of Vietnamese enterprises to adapt to a market economy is still poor, so challenges and difficulties at home country are also high. It is also a challenge related to competitiveness, governance, transparency, information technology, intellectual property and human resources. In addition, these agreements add to the pressure to ensure the requirements of internal mission and protection of intellectual property rights; pressure to reduce taxes, shift and erode tax bases; pressure to overcome technical barriers and sanitary and phytosanitary systems. The Ministry of Industry and Trade need to adopt certain measures to optimise the effectiveness of FTAs while limiting their negative impacts: First, to continue to review and evaluate FTA impacts on each sector so that we can make good adjustments during the course of implementation; Second, to continue administrative reform while improving business environment so that competitiveness is raised to a higher level; Third, to advise the Government to adopt policies that will help all industries and sectors, particularly important sectors such as industrial processing or agro-product processing, in the course of international integration by the year 2020 and with a vision to 2030; Fourth, to continue to advocate all partners, particularly the big ones, to acknowledge that Vietnam has a market economy while reaching fair settlement on all economic and trade disputes to help workers; Fifth, to adopt new policies on international integration; Finally, to continue to negotiate other FTAs to expand our export market while seeking opportunities for Vietnamese enterprises to participate in regional value chains.

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D.REFERENCES 1. “Free-trade area”, Wikipedia. Retrieved available from https://en.wikipedia.org/wiki/Freetrade_area 2.“Advantages and disadvantages of WTO”, June 17th 2016. Retrieved available from https://econ.economicshelp.org/2007/06/advantages-and-disadvantages-of-wto.html. 3. Ten benefits of the Comprehensive and Progressive Trans- Pacific Partnership (CPTPP), March 8 2018, Asia Business Trade Association. Retrieved from https://www.asiabusiness.trade/news/2018/3/8/ten-benefits-of-the-comprehensive-andprogressive-trans-pacific-partnership-cptpp 4.TPP-11 to implement CPTPP by end of 2018 – Are you ready for the opportunities and challenges?, October 31 2018. Retrieved available from: https://www.osler.com/en/resources/cross-border/2018/tpp-11-to-implement-cptpp-by-endof-2018-are-you-ready-for-the-opportunities-and-challenges 5. CPTPP: making trade great again but concerns linger, December 15, 2017 by International Trade Compliance Blog. Retrieved available from:http://www.internationaltradecomplianceupdate.com/2017/12/15/cptpp-makingtrade-great-again-but-concerns-linger/ 6. CPTPP Serving Vietnam as Opportunities and Challenges, January 17,2018, Bui Thanh Nam, Moderndiplomacy. Retrieved from https://moderndiplomacy.eu/2018/01/17/cptppserving-vietnam-opportunities-challenges/ 7. Cơ hội và thách thức khi Việt Nam gia nhập CPTPP, November 6,2018, Hoai Thu, Baomoi.com. Retrieved available from https://baomoi.com/co-hoi-va-thach-thuc-khi-vietnam-gia-nhap-cptpp/c/28470226.epi. 8. Why does Vietnam have to sign many FTAs?, April 24, 2018, Thanh Nguyen & Huyen Trang, Custom News. Retrieved available from: https://customsnews.vn/why-doesvietnam-have-to-sign-many-ftas-6737.html 9. Diễn dàn CPTPP: Cơ hội nào cho doanh nghiệp Việt Nam. T.D.V, 2019,[Online]. 19 Jan. Retrieved available from https://tuoitre.vn/dien-dancptpp-co-hoi-nao-cho-doanhnghiep-viet-nam-20190119093401405.htm 10. Vietnam must take advantage of trade deals, February 3, 2018, Vietnam News. Retrieved available from: https://vietnamnews.vn/opinion/422417/viet-nam-must-takeadvantage-of-trade-deals.html#pOrgu1eu12YgEulb.97

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