One year of CPTPP: flourishing export, regressive investment

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Among high-growth export products to CPTPP countries without FTA relations such as Canada and Mexico, lacking a number of key products of Vietnam such as agriculture and fishery and textiles. Photo: Nguyen Thanh

Trade surplus of $1.6 billion

The Ministry of Industry and Trade has just reported on the implementation results of the CPTPP of the ministries, branches and localities in 2019.

Specifically, in 2019, trade turnover between Vietnam and CPTPP countries reached $77.4 billion, up 3.9% compared to 2018. Vietnam's exports to CPTPP countries reached $39.5 billion, up 7.2% compared to 2018, focusing mainly on the following items: telephones and accessories; devices; seafood and textile.

Thus, in 2019, Vietnam had a trade surplus with CPTPP countries of $1.6 billion. Meanwhile, Vietnam's trade deficit in CPTPP countries in 2018 was US$0.9 billion.

In terms of specific markets in the bloc, Vietnam's export turnover to the members who have implemented CPTPP has a positive growth rate over the same period last year (except Australia decreased by 11.4% due to a sharp decrease in crude oil exports to this market).

Notably, some markets that Vietnam has not yet had FTA relations such as Canada and Mexico recorded a sharp increase immediately after the CPTPP came into effect. Specifically, exports to Canada increased by 29.9%; exports to Mexico increased by 27.6%.

In the opposite direction, the Ministry of Industry and Trade's report stated that import turnover from the market of countries that have implemented the CPTPP has decreased or increased slightly. Therefore, the impact on the trade balance comes from import and export activities between Vietnam and the countries that have implemented CPTPP is a surplus of US$3.9 billion, up 135% over the same period in 2018.

“If we regard only the import-export turnover to the two new markets without FTA is Canada and Mexico, Vietnam will have a trade surplus of more than $5 billion in 2019, accounting for more than 50% of Vietnam's trade surplustotal,” the Ministry of Industry and Trade evaluated.

The Ministry of Industry and Trade gave more information: There are 27 of 63 provinces that have generated export activities with CPTPP countries, of which headed by Ho Chi Minh City, followed by Hanoi, Ba Ria-Vung Tau, Bac Ninh and KhanhHoa. Export items from localities to CPTPP countries are quite diverse, from agricultural products, aquatic products, handicrafts to textiles, machines, equipment, electronic components.

Investment attraction reduced by nearly 40%

Contrary to the positive growth in goods exports, the results obtained from the perspective of attracting foreign investment thanks to the CPTPP are not very satisfactory.

Specifically, in 2019, Vietnam attracted nearly $5.9 billion of investment capital from CPTPP countries, down by 38.8% compared to 2018. Ofwhich, the new registered capital was only $4.1 billion, decreasing by 52% compared to 2018, while the additional registered capital also decreased by 69%, reaching just over $1 billion.

Japan is the country with the strongest decrease in investment capital, from nearly $9 billion in 2018 to more than $4 billion in 2019, which is about a 53% reduction. Australia and Malaysia were also countries that invested in Vietnam in 2019, a sharp decline compared to 2018 with a decline of 62% and 51%, respectively.

However, according to the Ministry of Industry and Trade, some countries that donot have FTA relations with Vietnam, such as Canada and Mexico, recorded strong growth. Specifically, the registered capital from Canada to Vietnam reached more than $178 million, up over 95% compared to 2018; while capital from Mexico reached $120,000, growing nearly 1,100%. However, this amount of additional capital is very small.

"Although export performance to CPTPP countries, especially countries where Vietnam does not have FTA relationsis positive, this result could be improved if some shortcomings are overcome," the Ministry of Industry and Trade said.

The report indicates that currently only about 40% of the provinces and cities have import and export activities with CPTPP countries. In addition, many provinces and cities reported a modest number of enterprises in the province interested in exporting to CPTPP countries.

In addition, among export items with high growth rates to CPTPP countries without FTA relations such as Canada and Mexico, that are lacking a number of Vietnam's key products such as textiles, agricultural and aquatic products, etc.

Survey results of the Vietnam Chamber of Commerce and Industry show that about 86% of businesses already know or learn about the CPTPP. However, only about 1.86% of businesses learn about the agreement. According to the Ministry of Industry and Trade, this is a very modest figure and greatly affects the taking advantage of CPTPP from businesses.

In the future, the Ministry of Industry and Trade proposes the Prime Minister to assign the Ministry of Justice to assume the prime responsibility for, and coordinate with the concerned ministries and branches in, continuing to review the legal system, propose amendments and supplements to legal documents to implement the CPTPP.

Assigning local ministries and agencies to consolidate and improve the capacity of the division in charge of economic integration in general and the implementation of the CPTPP in particular, actively connect and coordinate with the focal point for implementation of the CPTPP of Ministry of Industry and Trade to improve enforcement.

The Ministry of Industry and Trade was assigned to strengthen coordination with ministries, branches and localities to improve the effectiveness of propaganda activities; suggesting ministries, branches and localities to closely coordinate with the Ministry of Industry and Trade in developing and implementing propaganda activities, ensuring practicality, effectiveness, avoiding duplication and waste.