CPTPP Agreement came into effect as to Vietnam from January 14, 2019

The National Assembly of Vietnam adopted a Resolution on ratifying the CPTPP Agreement and its related legal documents on November 12, 2018. Accordingly, the Agreement has entered into effect as to Vietnam since January 14, 2019.

On March 08, 2018, Vietnam and 10 countries including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru and Singapore officially signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in San Diego, Chile.

On December 30, 2018, the CPTPP Agreement officially came into force for the first six countries that had completed the ratification of the Agreement, including Mexico, Japan, Singapore, New Zealand, Canada and Australia.

With comprehensive commitments in high standards and balances, the CPTPP Agreement will help strengthen the mutually beneficial link between member economies and help motivate trade activities, investment and economic growth in the Asia – Pacific region.

The CPTPP Agreement consists of 7 Articles and 1 Annex regulating the relationship with the Trans-Pacific Partnership Agreement (TPP). The Agreement was signed by 12 countries including Australia, Brunei, Canada, Chile, United States, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam on February 6, 2016 in New Zealand, as well as regulates other issues related to validity, withdrawal or accession to the CPTPP Agreement.

The CPTPP Agreement remains the contents of the TPP Agreement (including 30 chapters and 9 appendices). However, it allows member countries to postpone 20 groups of obligations to ensure the balance of rights and obligations of Member States in the context of the withdrawal of US from the TPP Agreement.

These 20 groups of suspension obligations include 11 obligations related to the Intellectual Property Chapter, 2 obligations relating to the Government Procurement Chapter and the 7 remaining obligations related to 7 chapters of Customs Management and Facilitation for Trade, Investment, cross-border services trade, Financial Services, Telecommunications, Environment, Transparency and Anti-Corruption.

However, all commitments on opening market in the TPP Agreement wholly remain in the CPTPP Agreement.

According to experts, opportunities and challenges from CPTPP depend greatly on Vietnam’s ability to seize opportunities and overcome challenges.

Previously, in the presentation of the Agreement before the National Assembly, Deputy Prime Minister Pham Binh Minh said that participating in CPTPP was beneficial for Vietnam in general.

According to official research results of Ministry of Planning and Investment assigned by the Goverment in September 2017, the CPTPP can help Vietnam’s GDP and exports increase by 1.32% and 4.04% respectively in 2035. The total import turnover may also increase by 3.8%, which is lower than the rate of export growth, so the overall impact on the trade balance is favorable.

In addition, doing business under FTA with CPTPP countries will help Vietnam have the opportunity to restructure export and import markets in a more balanced way, thereby helping us improve the independence of the economy.

Besides, participating in CPTPP will help Vietnam have the opportunity to participate in the supply chain formed after the CPTPP takes effect. This is an important condition to improve the level of economic development of Vietnam, and then we can participate in production stages with higher benefit.

The Vietnam Government also recognized that participating in CPTPP is an opportunity for Vietnam to continue to improve the economic and law institutions, including a socialist-oriented market economy institutions, to support the process of innovation of economic growth and restructuring.

At the same time, it helps Vietnam have more opportunities to improve its business environment more open, transparent and predictable, approach advanced international standards, thereby promote both domestic and foreign investment.

Socially, participating in CPTPP will create more jobs, increase income and contribute to poverty reduction.

According to statistics, total GDP of 11 CPTPP countries is 10.2 trillion USD, accounting for more than 13% of the global GDP. The total population is about 495 million, accounting for 6.8% of the world population.

(ELITE LAW FIRM briefly translated from VNEconomy Newspapers)