>> Vietnam, a possible attractive center for investments
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Vietnamese companies, particularly exporters, are eagerly awaiting the effective implementation of the RCEP.
Photo: Chi Tuong / VNA / CVN |
The RCEP has become the largest free trade agreement in the world and covers nearly a third of the world’s population and accounts for 30% of the world’s gross domestic product. It aims to reduce or eliminate customs duties between member countries on a number of industrial and agricultural products. Vietnamese companies, particularly exporters, are eagerly awaiting its effective implementation.
More opportunities
As a company specializing in the export of goods to China and Malaysia, the food company Santa (Santa Food Joint Stock Company) hopes to increase its turnover by 20% after the entry into force of the agreement.
“The signing of this text is a great opportunity to expand exports and participate more deeply in the global supply chain”, shares Cao Minh Sang, its director.
According to him, to make the most of the opportunities offered by the RCEP, his company has been preparing for a long time by obtaining several certifications such as ISO, HACCP, USDA standards … in order to meet the needs of consumers.
In addition, the Santa company has developed an organic raw material production area in the Southeast region, the Central Highlands and the Mekong Delta. Added to this is a modern production line such as instant whitening without any treatment from the United States and Japan, allowing the flavor, color and freshness of the product to be preserved. Or American IQF freezing technologies, HPP bottling, all meeting the rigorous standards of the United States Department of Agriculture (USDA).
“We hope that after the entry into force of the RCEP, market access will be more open, helping our company to increase its export turnover from 15% to 20%”, hopes Cao Minh Sang. Like Santa, many other exporting companies expect great benefits when the deal goes into effect.
The Minister of Industry and Trade, Trân Tuân Anh, analyzes: “RCEP comprises 15 economies of different levels of development. This is a very favorable opportunity for all signatory countries, as well as for their companies to restructure and reposition supply chains and participate in value chains worldwide”.
In addition, the very specific conditions and requirements of the agreement will help to open up markets for commercial goods, services and investments. The agreement creates a huge regional free trade area. It also provides for the elimination of customs duties and quotas on 65% of products and harmonizes the rules of controlled origin, conformity assessment procedures and customs procedures.
Indeed, Truong Dinh Hoè, secretary general of the Association for the transformation and export of aquatic products of Vietnam, announces that once in force, this text will allow exporting companies to share a certificate of origin form ( C / O) instead of each form for each market like today, which will help simplify the procedure for companies. The RCEP was signed against the backdrop of a slowdown in international trade due to the COVID-19 pandemic, in hopes of creating more opportunities for exports, which are one of Vietnam’s growth engines.
More support
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A modern production line from the food company Santa.
Photo : CTV/CVN |
Apart from its advantages, RCEP will also cause challenges for Vietnamese companies when many foreign products come in in direct competition with local production. In particular with Chinese products at very competitive prices.
According to Nguyên Thi Thu Trang, director of the WTO and Integration Center under the Vietnam Chamber of Commerce and Industry, competition will be fierce both in the domestic market and in the regional market. To date, for example, no bilateral free trade agreement has been signed between China and Japan. But since these two countries are signatories of the RCEP, goods exported from either country will benefit from the elimination of customs duties. Chinese companies therefore risk becoming the main competitors of Vietnamese companies in the Japanese market. In order to be able to succeed, the latter must absolutely improve their competitiveness.
For Pham Van Viêt, chairman of the board of directors of Sarl Viêt Thang Jean, any agreement brings new advantages and opportunities for companies. This is why the signing of the said agreement is necessary, in particular for textile companies in the current difficult situation.
However, with this text, China is also a signatory member and the export of Vietnamese textile products to this country will be more difficult despite preferential import tariffs for raw materials. Indeed, China is the world’s leading exporter of textiles and clothing, with very strong competitiveness. The reduction in taxes will help to further improve their competitiveness compared to Vietnamese products. To dethrone Chinese products, Vietnamese companies have every interest in reviewing their organization and their management methods, in acquiring new technologies and in improving the quality of their products.
In order to support businesses on time, the Vietnamese Textile and Clothing Association asked the government to develop solutions for the development of the sector by 2030 and a vision for 2040 as soon as possible. Among the solutions suggested, the priority should be to plan strategic localities in the sector, invest in industrial zones with textile factories, help wastewater treatment to meet standards, help companies to actively participate in supply chains and improve their competitiveness.
In addition, it is necessary to take a proactive position, actively access information on integration, as well as prepare human and technological factors aimed at cooperating and improving the competitiveness of products with foreign companies. Great benefits are only reserved for companies that are proactive and carefully prepared to seize the opportunity.
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