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Trong said the trade pact shows Vietnam is strongly committed to comprehensive innovation and global integration. It also confirms Vietnam’s important geopolitical role and position in Southeast Asia as well as the Asia-Pacific region, he said.
With the ongoing rapid and unpredictable political and security changes in the world and in the region, joining the pact will lift up Vietnam’s position, he said.
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a major trade pact between Vietnam and 10 other countries that seeks to boost trade by reducing tariffs.
The pact will enhance Vietnam’s internal resources to implement its foreign policy of independence, self-reliance, multilateralism and diversification, while consolidating and strengthening national defense and security, Trong said.
When implemented, the pact will strengthen ties between Vietnam and other CPTPP member nations, particularly those with whom it has strategic partnerships, he added.
However, Trong also cautioned that participation in the pact will pose challenges in several areas including socio-economic development, revenue collection, and the adjustment of legal and institutional frameworks.
It will require Vietnam to renew its efforts, to continue to improve the law and increase transparency in the corruption fight, set up management mechanisms to both comply with international treaties and ensure socio-political stability, he said.
Speaking after the president at an ongoing NA session, Deputy Prime Minister Pham Binh Minh said that the CPTPP “will benefit Vietnam overall.”
Because the trade pact will cover 13.5 precent of global GDP, Vietnam’s GDP will be able to grow by 1.32 percent, and its exports 4.04 percent by 2035, he added, citing a recent report of by the Ministry of Planning and Investment.
With imports growing slower than exports, the trade balance will be advantageous for Vietnam, Minh said.
"Vietnam will have an opportunity to join the global supply chain because of the CPTPP, and can therefore participate in higher value-added production stages."
Commitments in the CPTPP will improve the country’s business environment and attract more foreign direct investment (FDI) capital, the Deputy PM said.
Signing the pact will also increase employment generation, he said, adding that the number of jobs will increase by 20,000-26,000 a year.
Stiff competition
Like President Trong, the Deputy PM also enumerated challenges that Vietnam would face when joining the CPTPP.
Domestic products such as pork and chicken might face strong competition from imports. Other products that can have trouble competing include paper, steel and cars, Minh said.
The reduction of import tariffs might reduce budget revenues, but there won’t be “sudden” impacts as seven out of 10 other CPTPP countries currently have a free trade agreement with Vietnam, he added.
Australia on Wednesday became the sixth nation to formally ratify the CPTPP, setting it on course to take effect on December 30.
Other countries that have ratified the deal are New Zealand, Canada, Japan, Mexico and Singapore.
The five countries still to ratify the deal are Brunei, Chile, Malaysia, Peru and Vietnam.
Originally a 12-member agreement known as the Trans-Pacific Partnership (TPP), the pact was thrown into limbo when U.S. President Donald Trump withdrew his country from the deal in January 2017.
Following the U.S. withdrawal, the remaining 11 countries renegotiated parts of the TPP, removing some of Washington’s demands. In March, they signed the revised CPTPP, also known as TPP-11.
