*** AusCham is confirming details for a business seminar that will address the status of the Trans Pacific Partnership (which includes the US but excludes China) and the Regional Comprehensive Economic Partnership (which includes China but excludes the US). Vietnam and Australia are members of both these agreements. ***
The guest speaker will be Mr Vo Tri Thanh who is currently the Vice-President of the Central Institute for Economic Management (CIEM). Dr Thanh is an Australian Alumnus holding a Masters and a PhD degree in Economics, both from the Australian National University.
Yesterday (13 August 2015), Vietnam News published an interview with Dr Thanh on RCEP and TPP in an article titled Regional partnership to benefit Viet Nam, ASEAN.
An edited extract of the original article is reproduced below.
The Regional Comprehensive Economic Partnership (RCEP) is a free trade agreement involving ASEAN and six partners: China, Japan, South Korea, Australia, New Zealand and India. Negotiations for the deal between the 16 participating nations began in 2012 and will wrap up by the end of this year.
Vo Tri Thanh [Australian Alumnus], deputy director of the Central Institute for Economic Management (CIEM), spoke to the media about the RCEP’s likely impacts.
What will be the impact of the Regional Comprehensive Economic Partnership on Viet Nam’s economy?
It could be said this is a necessary pact in the development process of the Association of Southeast Asian Nations (ASEAN), ASEAN+1 and ASEAN+6. We are just able to provide initial impacts of the pact to the economy as it would depend much on negotiation process as well as its commitment level. However, the initial findings show that the RCEP would bring good opportunities to the country.
Firstly, Viet Nam will have a chance to access a huge market of 3.4 billion people with a combined GDP of US$21 trillion, accounting for 29 per cent of the world’s gross domestic product (GDP). Like the Trans-Pacific Partnership (TPP), the RCEP signatory countries have a rapidly growing middle class.
Secondly, the RCEP aims to link ASEAN with six countries – Australia, China, India, Japan, South Korea, and New Zealand – which have developing production network.
Thirdly, the ASEAN has a deep association not only inside its big scale market but also major global partners like the EU and the US. The pact will bring many opportunities to Viet Nam in terms of access to new markets and tariffs to export to developed countries. The strong associated market will attract investors both within the region and in the EU and the US. Sectors like fisheries, agriculture, construction, garments and textiles, and leather footwear will have additional opportunities for growth.
Besides [trade] liberalisation, the pact also discusses co-operation and development. This is the reason why the RCEP is not just a story about free trade but also about co-operation among parties, including some less developed countries.
However, the pact will also bring challenges to Viet Nam. Several countries joining the RCEP have goods and trade structures that compete with Viet Nam’s. With further integration, Viet Nam will have to face the competition.
The agreement also focuses much on reforms since foreign investors will see the region as a relatively integrated market. They will choose countries that are more attractive. It requires greater efforts from Viet Nam to reform itself to attract foreign investors.
Another challenge for Viet Nam will be the low competitiveness of some sectors and lack of participation in the global production chain…
- For other questions and answers by Dr Thanh in the article, please click onto the original and unedited article, Regional partnership to benefit Viet Nam, ASEAN.
- Fewer than 30 per cent of Vietnamese companies had some knowledge about TPP, reports Vietnam News, 11 August 2015.
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