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"Amid the disruption to the global supply chains caused by the Covid-19 pandemic and rising protectionism, the signing of the Regional Comprehensive Economic Partnership (RCEP) marks an important milestone for its member countries in economic integration," Minister of Industry and Trade Tran Tuan Anh said after the trade pact was signed online on Sunday by countries who account for around 29 percent of the world’s GDP.
Tran Kim Nga, director of corporate development at Thai-owned MM Mega Market Vietnam retail chain, said Vietnam could be one of the countries to benefit the most from the RCEP since most of the other members have demand for its main exports like agricultural and fisheries products.
"The pact’s not too stringent import standards and similarities in consumer preferences in member countries will make trading more easy."
Nguyen Thi Thu Trang of the Vietnam Chamber of Commerce and Industry said countries that Vietnam sources much of its production inputs from, like China and South Korea, were not members of earlier trade pacts, and therefore products made by Vietnamese companies using them did not qualify for preferential tariffs.
Having these two countries and others like them in the RCEP now makes it "easier than ever" for Vietnamese firms to enjoy preferential tariffs, she said.
But it is not as if there are no challenges for Vietnam. Trade officials have said that the similarities in export items of many member countries would increase competition since Vietnamese products’ added-value remains small.
Besides, it will be the first trade pact between certain countries such as China and Japan. Trang explained that Vietnam’s exports to Japan have been benefiting from three earlier trade pacts, but would now face competition from Chinese goods.
Even at home, Vietnamese companies would have to compete with imports, especially from China with its range of goods and competitive prices, she said.
Nga said products from South Korea, Japan and Thailand like cookies and candies, noodles, milk, cereals, and frozen foods would also attract Vietnamese consumers thanks to their eye-catching packaging, high quality and reasonable prices.
"The growing number of young Vietnamese consumers demanding quality products and willing to try new products will increase demand for foreign goods in the near future."
The RCEP, which had been negotiated since 2013, was signed by 15 countries including the 10 ASEAN members and Australia, China, Japan, New Zealand, and South Korea.
It will give Vietnamese businesses access to another third of the world’s population.
The agreement will take effect when at least six ASEAN members and three others send in their ratification documents.
