After intense negotiations, the CPTPP was finally signed on March 8 in Chile. Without the United States, the economic size of the CPTPP is not as large as that of the TPP, but for Vietnam, the trade pact is anticipated to open valuable new export opportunities to Japan, Canada, Mexico, and Australia.
These countries are also important foreign investors with strengths in many fields for which Vietnam is attracting investment. But more importantly, a long-term benefit of the CPTPP is the push for institutional reforms at home to create an open and transparent business environment.
After signing, the CPTPP will be presented to the National Assembly for ratification before it officially comes into force. Therefore, from the date of signing to the date it comes into effect, there is yet time for domestic enterprises to make the necessary preparations in order to take the best advantage of this trade deal.
But experience from the international integration process, especially the implementation of free trade agreements, in recent years shows that most domestic enterprises are rather ill-informed about integration commitments or expect too much from the opportunities, while failing to anticipate all the challenges facing them.
For example, Vietnam officially became a member of the ASEAN Economic Community in late 2015 but after two years of participation in this huge market, many Vietnamese enterprises are now paying a high price for their lack of preparation. Many exports to ASEAN are falling, while imports from the region are growing and domestic enterprises are being overwhelmed by their foreign competitors even on home ground.
The pressure on both the export and domestic markets is the greatest challenge to Vietnamese enterprises during the international integration process. Adjusting the business mindset to the new context and converting the pressure from competition into a driver for innovation are urgent requirements for Vietnamese enterprises.
To capitalise on opportunities and overcome challenges, Vietnamese enterprises have no way but to proactively inform themselves of the finer details of the CPTPP, and get a thorough grasp of integration commitments so that they can formulate appropriate business strategies to adapt to changes in the business environment and the strict requirements set out by their partners.
An innovative and creative mindset with sound business sensibility and diligent preparations are what domestic enterprises should equip themselves with if they want to succeed on the global playing field.