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Businesses still expect from CPTPP

​Minister of Industry and Trade Tran Tuan Anh said that the ministers of the 11 member countries of the Transpacific Partnership Agreement reached a basic agreement for the TPP after the US’ withdrawal. The agreement will be called the Comprehensive and Progressive Transpacific Partnership (CPTPP), which promises to create new breakthroughs for economic liberalization in the 11 member nations.


​In the latest round of negotiations from November 8 to 11 11-2017, Ministers of CPTPP countries unanimously retained the old TPP content but allowed countries to postpone implementing some contents to ensure the balance in the new context. The new agreement will suspend 20 articles of the original TPP agreement, 10 of which are related to intellectual property.

 

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The textile and apparel industry still expects the CPTPP to be signed to attract more investment in supporting industries to reduce the import of raw materials. In the picture: Manufacturing operation in Dong Tien Joint Stock Company
 

 * More markets for export
Mr. Nguyen Tien Chuong, Chairman of the Dong Nai Import-Export Association, said that despite the withdrawal of the US, the CPTPP was not as expected; but it still had a positive impact. Since Vietnam is a country that encourages exports, CPTPP is an access to new markets. Although the agreement was renamed CPTPP, TPP's core issues still remain. "Such regulation as the source of raw materials to be produced in the member countries is also a positive point for enterprises make investment in development. Participation in the CPTPP is more open, which requires enterprises to be more professional, "Mr. Chuong said.

* Timber industry reaps lots of benefits
One of the industries expected to reap a lot of benefits from CPTPP is wood processing for export. Mr. Phan Van Binh, Chairman of Dong Nai Handicraft and Wood Association, analyzed that the United States and Japan are Vietnam's as well as Dong Nai’s major export markets for wood products, but the US’ withdrawal has made it less attractive. Participating in this agreement to expect tax reduction is not very meaningful, because the tax rates of these two markets are now 0%. The advantage of the agreement that timber businesses expect is zero tariff on the import of raw material wood from member countries ensure the legality of the raw material sources. When participating in CPTPP, enterprises in the industry can easily approach new technology and improved quality of goods, which will create competition in the market.

* Opportunities to enter new markets
According to Mr. Vong Khieng, General Secretary of Dong Nai Ceramics Association, pottery products of the province are mainly exported to the US market, so when the US withdrew from TPP, many facilities in the industry really felt pity since the opportunity to enjoy 0% tax rate to increase competitiveness and profit was lost. However, this does not affect the number of orders shipped to the US market. In addition, CPTPP will continue to open new markets for the ceramic industry so that it will not mainly depend on a few large markets.

* Attractiveness still remains
Mr. Le Bach Long, Vice Chairman of Dong Nai Young Entrepreneur Association and Director of Nam Long Limited Company (Long Thanh District), shared that without the US, CPTPP markets still attract businesses in the province. Therefore, many businesses still expect this agreement soon to be signed. In addition to the advantage to import and export of goods into the member countries, there will be more opportunities in attracting investment from the CPTPP member countries in Vietnam in general and Dong Nai in particular. Thus, Vietnamese enterprises can find more partners to supply goods, increase the localization rate of products to easily meet the regulations on origin of goods when exported to countries with which Vietnam has signed other trade agreements.

* We cannot lose what we don’t have yet
Mr. Yoo Sun Hyung, CEO of Hyosung Vietnam Limited, said that the TPP is now under negotiation, so the US withdrawal just makes local enterprises lose opportunities in the future rather than directly affect their manufacturing operation. Before TPP is signed, Hyosung and many other Dong Nai companies have increased their exports to the US market. However, many companies including Hyosung also had plans in advance get ready for the TPP to be officially signed to take the advantages, but now with the US’ withdrawal, they must revise the production plan accordingly. Vietnam as well as Dong Nai still attracts much foreign investment thanks to fast integration and many effective free trade agreements.

* There are many other markets
Mr. Nguyen Van Hoang, Deputy General Director of Dong Tien Joint Stock Company (one of 5 big garment exporters of Dong Nai province) said that the negotiation of CPTPP is what many enterprises are expecting for. Although the US has withdrew from TPP, the market is shrinking but there are still big markets such as Japan, Korea. In addition, businesses can have access to more markets within CPTPP when the it is signed and takes effect. CPTPP nations are not the main export markets of Dong Tien, but the enterprise still expects it to be signed soon to attract more companies from member countries to invest in supporting industries in textile industry to reduce the import of raw materials. As a result, Dong Tien will enjoy tax reduction when exporting garment to the EU according to the EU-Vietnam Free Trade Agreement.


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