The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) will allow Vietnam to increase exports of garments, footwear, timber products, and beverages to other member countries.
As of now, Vietnam’s exports of footwear, garment and textile, timber products, and beverages to CPTPP member countries make up 12.5 per cent, 16.04 per cent, 20 per cent and 23.46 per cent of its total exports. Japan, Malaysia, Singapore, Australia, New Zealand and Chile have bilateral or multilateral trade agreements with the country. Canada, Mexico and Peru are countries that Vietnam does not have free trade agreements with. So the CPTPP offers great opportunities for Vietnamese firms to access these markets through preferential tariffs.
But Vietnamese enterprises’ ability to take advantage depends on their preparation. To capitalise on the opportunities, the products must meet the CPTPP’s rules of origin and conform with sanitary and phytosanitary requirements and technical barriers to trade. Failure to meet these requirements would mean Vietnam cannot utilise the preferential tariffs offered by CPTPP member countries. Vietnamese garment and textile firms have faced difficulty in meeting the CPTPP’s rules of origin since their raw material imports from countries outside the CPTPP remain high. Domestic and foreign firms are now investing in the underdeveloped textile, dyeing and fabric segments to increase the domestic content rate.