The greatest benefit is the pressure of reform
"Vietnam will have a new market of 500 million people spread throughout the globe. A new market structure will open up for Vietnamese businesses. Trade opportunities will also open up investment opportunities. However, the matter is the quality of the strategy to approach and fulfil CPTPP commitments..." said Dr. Tran Dinh Thien, director of the Vietnam Institute of Economics.
This is not the first time that Thien has talked about this, nor is he the only one to raise the issue. The World Bank report on Economic and Distributional Impacts of CPTPP, released following the official signing of the agreement, states that CPTPP will bring direct economic benefits and stimulate domestic reforms.
The trade pact is expected to jumpstart reforms in the areas of competition, services (including financial services, telecommunications, and temporary entry of service providers), customs, e-commerce, environment, government procurement, intellectual property, investment, labour standards, legal issues, market access for goods, rules of origin, non-tariff measures, and trade remedies, among others.
Thien sees these reforms as a great opportunity, providing long-term optimism about the impacts of the CPTPP, saying that the "pressure on institutional changes and legal framework improvements in line with the standards of a transparent and modern market will open up opportunities for enterprises. The participation and confrontation with trade wars will also be a way to improve the competitiveness of both the economy and enterprises."
Questions need immediate answers
Business strategies after the signing of CPTPP must follow policy moves, putting the burden on state authorised agencies. It means that if the review and evaluation of the current legal system and law amendments are not immediately implemented, or are not aligned with the spirit of the CPTPP, the opportunities anticipated for Vietnamese businesses will remain at a research level.
Nguyen Thi Thu Trang, director of the WTO Centre under the Vietnam Chamber of Commerce and Industry (VCCI) emphasised that for participation in the CPTPP playground or any other playground, Vietnamese businesses must adapt themselves to the business and policy environment in Vietnam.
It is not groundless that economic experts and the business community are concerned about the responsibilities of state management agencies.
In the VCCI's 2016 survey of the Ministerial Efficiency Index (MEI) on business law development and implementation in preparation for the signing of TPP, less than 50% of enterprises showed satisfaction in the performance of ministries.
"We are looking forward to ministries and agencies to hastily review and evaluate the legal document system, which also requires the transparency and high responsibilities of ministries in this area,” Trang said.
Enterprises do not stand apart
Despite the great dependence on the planned review and amendments of the legal document system, Vietnamese enterprises enjoy the support of an improved business environment thanks to the drastic actions of the government over the past two years.
For the first time in many years, ministries and sectors have taken action to reduce business conditions, administrative procedures, and specialised inspection procedures applied for import and export goods.
Initial results showed that 675 business conditions managed by the industry and trade sector were eliminated pursuant to a decision by the Prime Minister in early 2018. In addition, a series of specialised inspection procedures applied to the production and business of food were also removed according to the Decree No.15/2018/NĐ-CP which replaced the Decree No.38/2015/NĐ-CP.
The outcomes were attributed to the significant contributions of associations of enterprises, who worked with state research agencies to analyse and propose adjustments to these procedures.
The review and evaluation of policy and business-related laws are what enterprises are actually expecting from the state management agencies to make them conformable with CPTPP requirements.
Trang said that the VCCI has planned to cooperate with business associations in carrying out an independent review of legal documents related to the implementation of the CPTPP in order to provide recommendations to authorised agencies on which will require the active involvement of enterprises and negotiating experts.
It is obvious that the opportunities and challenges that the CPTPP can bring to the Vietnamese economy are not kept in the words of the commitments, and the realisation of opportunities is not in the recommendations, rather, they are both in the hands of enterprises and state management agencies.
“We have to change our minds according to the principle that reform and innovation are the internal demands of enterprises and the economy, while integration commitments only act as a catalyst for this process," Thien added.
