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|RCEP has enabled Vietnam to be connected better with global supply chains compared with other new-generation free trade agreements. (Photo: VNA)|
Hanoi - The Regional Comprehensive Economic Partnership (RCEP) agreement has enabled Vietnam to be connected better with global supply chains compared with other new-generation free trade agreements (FTAs), an official has said.
Nguyen Thi Thu Trang, Director of the WTO and Integration Centre at the Vietnam Chamber of Commerce and Industry (VCCI), said the signing of the RCEP at the 37th ASEAN Summit in 2020 demonstrated Vietnam’s resolve and success as ASEAN Chair.
It also showed Vietnam is a trustworthy partner and expressed its prestige in the international arena.
Regarding opportunities brought about by the agreement, Trang said it encompasses an economic region that provides the largest source of materials and equipment to Vietnam and serves as the country’s largest consumption market.
The agreement also covers the largest production chains in the world, thus facilitating Vietnam’s connectivity with other RCEP member economies as well as its foreign investment attraction.
The country will therefore find it easier to join global supply chains, according to Trang.
|Nguyen Thi Thu Trang, Director of the WTO and Integration Centre at the Vietnam Chamber of Commerce and Industry (Photo: VNA)|
The agreement has also posed many challenges, she added, explaining that it will increase Vietnam’s trade deficit in the region and see it lose institutional momentum with standards that are not too high.
In FDI attraction, most RCEP economies are major investors in Vietnam but there are still partners whose technologies and investment quality are not good.
The deal has also generated competitive challenges for Vietnamese firms, with the opening up of goods and services in the domestic market, Trang said.
To put the RCEP to best use, she suggested Vietnam adopt three groups of solutions: continuing to reform institutions and improve the business environment; devising clear industrial policies that define spearhead and supporting industries; and reforming control mechanisms and ensuring FDI quality.
To effectively implement the agreement, she said businesses need to improve their competitiveness, study the commitments in the deal, and brace for any and all challenges.