RCEP – new impetus for post-pandemic economic recovery | Business

Hanoi (VNA) – The Regional Comprehensive Economic Partnership (RCEP), which entered into force on January 1, is expected to become a new impetus accelerating trade and subsequently post-pandemic economic recovery by forming a stable and long-term export market for Vietnam and other ASEAN countries and create a legally binding basis for a fair trading environment in the region.

RCEP, an ASEAN integration priority, forms a market with 2.2 billion consumers and a total GDP of around $ 26,200 billion, accounting for around 30% of global GDP, and becomes the largest area free trade in the world. It will eventually eliminate tariffs on up to 92% of goods traded between its signatories, expand market access for investments, harmonize rules and regulations and strengthen supply chains within it.

The pact was signed between 10 ASEAN members and five partners from China, Japan, Republic of Korea, Australia and New Zealand on November 15, 2020 at the 37th ASEAN Summit chaired by Vietnam. It encompasses four free trade agreements that ASEAN has signed with partners previously, creating a new free trade area.

Luong Hoang Thai, head of the multilateral trade policy department of the Ministry of Industry and Trade, said ASEAN member countries, including Vietnam, place high hopes in the deal as one of the acceleration factors post-pandemic economic recovery.

However, experts felt that in addition to opportunities, RCEP also brings challenges, including fiercer competition for Vietnamese products and services due to the similar structure of products in other countries and certain independence. of Vietnam vis-à-vis imported materials for production.

But they claimed that the country’s international integration affirms that Vietnam has a growing capacity to join the newly established countries. value chains in the region with its strong reform of administrative procedures and its efforts to improve the investment environment.

They explained that the implementation of RCEP will not result in shock in tariff reduction for Vietnam as the country has long experience in dealing with tariff liberalization with ASEAN country in 20 years and with the five partners in 15 years.

In addition, the deal is expected to enable Vietnamese businesses, especially small and medium-sized enterprises, to participate in new supply chains that may be created by RCEP.

Chu Thang Trung, deputy director of the Trade Remedies Authority of the Ministry of Industry and Commerce, said there is a need for companies to clearly understand legal regulations to avoid the risks of partnering with foreign peers, adding that his office will work with relevant agencies to strengthen communications between the business community on trade remedies.

A representative of the Import-Export department of the Ministry of Industry and Trade said RCEP will give Vietnamese products more chances, helping domestic companies to engage more deeply in regional supply chains.