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The Ministry of Industry and Trade said in a recent statement that many sectors in Vietnam will have a chance to grow under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), including food and beverage, tobaccco, textiles, chemicals, plastics, leather, transport equipment and services.
It has been estimated that the trade pact, which covers 13.5 percent of global GDP at around $10 trillion, would boost Vietnam’s GDP by 1.32 percent, and its exports by 4.04 percent by 2035, while creating jobs for 20,000-26,000 people.
However, both officials and experts have warned of challenges that the pact can pose. Vo Tri Thanh, former deputy head of the Central Institute for Economic Management, said that the pact would require more breakthroughs in institutional reform towards establishing a professional, transparent and accountable state administration.
"Now that CPTPP has come into force, Vietnam needs to accept the risks and challenges it brings. These are necessary factors for faster, more sustainable development," he said.
Economist Nguyen Tri Hieu said that the CPTPP would be a test for Vietnamese businesses when foreign players enter the local market.
"The entrance of foreign businesses with better products in terms of price and quality will force Vietnamese firms to improve their products in order to compete," he told VnExpress International.
Without competitive products in terms of quality and price, Vietnamese firms will face high risks of losing out to CPTPP members in their own market, Hieu added.
The trade ministry shares the same concerns. It said that Vietnam might have to face difficulties in the agriculture and livestock sectors, as Vietnamese pork and chicken are not as competitive as other countries.
Other members with strengths in manufacturing paper, steel and cars might also create difficulties for Vietnam in these sectors, it cautioned.
Vietnam will also need to make changes in its laws concerning trade, customs, intellectual property and labor to meet international requirements, the ministry said.
Other experts have expressed concern about the high number of state firms in Vietnam, which could make it hard for Vietnam to fulfill its obligations under the CPTPP trade pact, as it seeks to promote a level playing field for SOEs and their private competitors.
Before Vietnam, CPTPP entered into force on December 30 in the first six countries that ratified it: Australia, New Zealand, Canada, Japan, Mexico and Singapore.
Brunei, Chile, Malaysia and Peru are the countries yet to ratify the pact.
