Vietnam News, 18 July 2015. Vietnam to join new market region

An edited extract of the original article appears below.

Viet Nam will be able to access a huge market of 3.4 billion people when it joins the Regional Comprehensive Economic Partnership (RCEP).

Countries in RCEP will have a combined GDP of US$21 trillion, accounting for 29 per cent of the world’s GDP, said Nguyen Anh Duong, Deputy Director of the Central Institute for Economic Management (CIEM).

Speaking during a workshop held in Ha Noi yesterday on the impact of RCEP on Viet Nam’s economy and the opportunities and challenges it would pose, Duong said regulations on origin in RCEP would be simpler and more liberal than in other economic pacts. In addition, the parties would make more commitments on freedom of trade in goods and services and investment, he said.

Negotiations on RCEP officially began in 2012 with six countries: Australia, China, India, Japan, South Korea and New Zealand. The pact aims to build a regional free trade area. The RCEP states’ total GDP will be higher than the combined GDP of countries in the Trans-Pacific Partnership (TPP), which will account for 26 per cent of the world’s GDP, and it will have a rapidly growing middle class.

According to Duong, RCEP is expected to offer major opportunities to Viet Nam by improving its access to investment and export markets in the member states of the Association of Southeast Asian Nations (ASEAN), as well as partners with demand for diverse goods. At the same time, it could make imports of technology and machinery cheaper, thus creating opportunities for Viet Nam to join the region’s production value chain, Duong said.

The pact could also help Viet Nam reduce transaction fees, create a friendly business environment and enhance its role in resolving trade and investment disputes, he said..

However, Viet Nam would also face challenges in banking services as the RCEP countries in the region, such as Singapore, Japan, South Korea and Australia, have highly developed banking sectors.

Vo Tri Thanh, CIEM’s deputy director, said RCEP and TPP would not clash but support each other to help Viet Nam integrate further into the world economy.

“The two pacts have a common feature of commitment to freedom in trading goods and services, and in investment. Talks on both RCEP and TPP are expected to end this year,” Thanh said.

In RCEP, ASEAN is looking for cooperation and equal development. The TPP is a free trade agreement aimed at resolving the issues of labour standards, a competitive environment, State-owned enterprises, State purchases and intellectual property…

 

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