Vietnam’s "billion-dollar" partners in CPTPP

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Chart of trade turnover between Vietnam and members of the CPTPP in 2017, the unit "million USD". By: T. Binh

Accounting for 15.84% of the country’s total import and export turnover

Among the 10 remaining members of the CPTPP, Japan is Vietnam's largest trading partner and Vietnam’s fourth largest trading partner in the world (after China, South Korea, and the United States). In 2017, two-way trade turnover between Vietnam and traditional partner reached over US$ 33.4 billion. In which Vietnam achieved a trade surplus of about US$ 250 million.

Other "billion-dollar" partners are Malaysia (an export value of US$ 4.209 billion, an import value of US$ 5.86 billion); Singapore (a export value of US $ 2.961 billion, an import value of US $ 5.3 billion); Australia (an export value of US$ 3.3 billion, an import value of US$ 3.16 billion); Canada (an export value of US$ 2.7 billion, an import value of US$ 774 million); Mexico (an export value of US$ 2.34 billion, an import value of US$ 567 million); Chile (an export value of US$ 1 billion, an import value of US$ 283 million).

Although there are only 10 trading partners, the total trade turnover between Vietnam and CPTPP members reached more than US $ 67.33 billion in 2017, accounting for 15.84% of the country’s total import and export turnover last year. On average, with about 200 countries and territories having trade relations, in 2017, Vietnam had a turnover of over US$ 2 billion per market. Meanwhile, with CPTPP members, in particular, the average turnover reached over US$ 6.7 billion per market, equivalent to nearly 3.5 times higher than the country’s average turnover.

Although these are relative and numeral data and comparisons, they also partly shows the importance of CPTPP in our country's foreign economic relations.

A significant point is that Vietnam has achieved a trade surplus with most of its partners. Vietnam was only in the trade deficit with 3 partners in Southeast Asia: Singapore (a deficit of more than US$ 2.33 billion); Malaysia (a deficit of more than US$ 1.65 billion) and Brunei (a deficit of more than US$ 13 million).

Clearly, with the economy focusing on boosting the export production of Vietnam as the current time and with tax incentives and openness in technical barriers, the CPTPP will provide great opportunities for import-export enterprises in Vietnam (including both domestic enterprises and foreign direct investment enterprises).

Great opportunities for many key sectors

With the openness of the market under commitments in CPTPP, many Vietnam’s key export sectors will have more opportunities to raise their turnovers. Especially, major export sectors are telephones, computers, garments and textiles, footwear, seafood, wooden products, means of transport, machinery and equipment.

Typically, the largest market is Japan, 2017 recognized Vietnam’s five export groups with a turnover of US$ 1 billion or more. Especially, in the CPTPP largest market, our exports do not rely on telephones or computers but focus on traditional industries such as garments and textiles, seafood, wooden products or goods in the field of manufacturing industry such as means of transport, machinery, and equipment.

In particular, garments and textiles are the largest export items with a turnover of more than US$ 3.1 billion; followed by means of transport with a turnover of US$ 2.177 billion; machinery and equipment with a turnover of US$ 1.718 billion; seafood with a turnover of US$ 1.3 billion; and wooden products with a turnover of US$ 1.022 billion. If the garment and textiles and seafood were heavily dependent on the US market, but they now move to Japan market, that is a positive sign. This not only helps businesses to access large markets with high technology standards such as Japan but also helps to minimize difficulties caused by protection measures for domestic production by the US President Donald Trump.

Important export sectors such as garments and textiles, footwear and seafood are the major exports to Canada, Chile, and Australia. These sectors also continue to have great opportunities when the CPTPP officially comes into effect. Meanwhile, telephones, computers will have more opportunities in further increase exports to Malaysia, Indonesia, Singapore, Mexico and New Zealand ...

According to a report released by the World Bank after the CPTPP was signed, the WB realized that for Vietnam, multilateral trade agreements such as CPTPP would provide incentives for the growth model based on investment and exports.

In addition, the World Bank forecasted that the CPTPP will help to boost foreign investment and increase the service sector and labor productivity in Vietnam. As a result, domestic private enterprises will have more opportunities to participate in the global value chain and encourage the development of the small and medium enterprise sector.

CPTPP promotes trade, investment in 21st century 11 countries signed the Comprehensive and Progressive Agreement for Trans Pacific Partnership CPTPP in Santiago Chile

In addition, CPTPP is able to promote reforms in many areas such as competition management, services (finance, telecommunications, and temporary participation of service providers), customs, trade, electronics, environment, government procurement, intellectual property, investment, labor standards, legislation, market access, rules of origin, non-tariff measures and trade remedies