RCEP – important milestone in Vietnam’s international economic integration process
Within the framework of the 35th ASEAN Summit and related Summits held in Nonthaburi province, Thailand on November 2-4, leaders of ASEAN member countries and its partners agreed to conclude the negotiations of the Regional Comprehensive Economic Partnership (RCEP) in 2020.
Both the 3rd RCEP Summit on November 4 and the Preparatory RCEP Ministerial Meeting on November 1 agreed to conclude the negotiations. Leaders of 16 countries participating in the RCEP negotiation, including 10 ASEAN member countries, concluded text-based negotiations for the 20 chapters of the agreement and agreed to promote the signing of RCEP in 2020.
During the recent meetings on RCEP agreement, the Vietnamese delegation has actively contributed to discussions to find flexible solutions in many areas and to resolve problems between the parties while ensuring benefits of countries, in order to boost the conclusion of the negotiations soon, scheduled for 2020 when Vietnam holds the chairmanship of ASEAN.
As a large-scale free trade agreement of the Asia-Pacific region, RCEP, when signed, will include 16 countries in a trade bloc accounting for one-third of global GDP. Countries participating in RCEP have a total population of more than 3.5 billion people and a trade value of more than US$1 trillion (equivalent to 29% of the global trade value).
On the sidelines of the RCEP Summit in Thailand, Minister of Industry and Trade Tran Tuan Anh gave an interview to Nhan Dan online newspaper correspondents. Following is the full dialogue of the interview:
Reporter: Can you tell us about the meaning of the conclusion of the RCEP negotiations?
Minister Tran Tuan Anh: The conclusion of the negotiations of RCEP marks a very important milestone in the process of international economic integration of Vietnam as well as of all countries participating in RCEP in general, especially in the context of increasing trade protectionism.
After nearly seven years of negotiations, we have witnessed the great efforts of all parties, particularly at the 28th negotiation session in Da Nang in September 2019. I am very pleased that the countries have completed the text-based negotiation of the agreement and concluded most of negotiations on the market opening. India has significant outstanding issues, which remain unresolved, and it will work with other RCEP participating countries to resolve these outstanding issues during next year. The countries also agreed to soon conduct a legal review of the agreement texts to implement the signing procedures in 2020.
When the RCEP agreement is implemented, it will create a market of more than 3.5 billion consumers and total GDP of approximately US$49 trillion, accounting for 39% of global GDP. RCEP bloc will also become the largest free trade area in the world with commitments on market opening in the fields of goods, services and investment, simplification of customs procedures, and rules of origin to facilitate trade.
The agreement is expected to strongly promote the development of regional and global value chains, helping to further foster the economic development of ASEAN countries, including Vietnam and partner countries. In the context that regional and international economies facing certain obstacles of trade protection, the successful negotiation of the agreement will contribute to creating a new trade structure in the region and promoting globalisation towards trade liberalisation in a sustainable way.
Regarding Vietnam, the implementation of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) from January 2018 and the signing of the European Union-Vietnam Free Trade Agreement (EVFTA) in June 2019 in addition to the conclusion of the negotiations of RCEP will open up more opportunities for Vietnamese enterprises to boost exports, participate in new value chains and increase the attraction of foreign investment.
Reporter: Experiencing nearly seven years of negotiating the RCEP agreement, besides the advantages, Vietnam has faced many challenges. In your opinion, what are the major challenges? What is Vietnam's role and participation in negotiating the agreement?
Minister Tran Tuan Anh: The RCEP negotiation can be said to be one of the most complicated trade negotiations. Before the beginning of the negotiations, all countries agreed on the goal of achieving a comprehensive and high-quality free trade agreement that benefits all parties. Among the partners participating in the negotiations, there are partners who have signed FTAs with each other, meaning that they have committed to opening the market for goods and services to a certain extent. For example, ASEAN signed FTAs with each of these six partners, but many countries have not signed FTAs with each other such as India with China and Japan with the Republic of Korea. Therefore, the achievement of a common market opening level for all 16 countries is very difficult.
In addition, besides the large scale of the agreement, the economic development levels of the member countries are also very different. ASEAN member countries also have different levels of development and different policies on the areas of negotiations including competition policy, investment, and intellectual property. Therefore, in the negotiation process, the parties always have to find solutions to solve problems while harmonizing the interests between the parties.
As an ASEAN member, Vietnam has closely coordinated with other countries in the bloc to maintain the leading role of ASEAN and promote negotiations while protecting the maximum interests of ASEAN countries, including Vietnam. With the aim of achieving a high quality and balanced agreement, Vietnam has actively participated in discussions and proposed flexible solutions to handle problems between the parties while preserving the national interest.
Reporter: Could you please tell us Vietnam’s orientation to build priorities in the ASEAN Chairmanship 2020?
Minister Tran Tuan Anh: Vietnam takes on the role of ASEAN Chair 2020 in the context of a favourable global and regional economy. Besides peace and cooperation, trade liberalisation is still a major trend in the world. New generation free trade agreements such as CPTPP and RCEP are being implemented or are being prepared for signing. However, the global and regional economic context is forecast to see many challenges and potential risks due to trade tensions, political instability and declining growth. The protectionism wave in the world has not shown any sign of decline, affecting multilateral and regional economic cooperation. Strategic competition between powerful countries, such as between the US and China, makes it difficult for the development process of ASEAN.
In order to successfully assume the role of ASEAN Chair 2020 in the Economic Pillar, Vietnam needs to take appropriate priority directions to make the most of favourable international conditions and overcome difficulties and challenges. The Ministry of Industry and Trade has set out four priority orientations in the Economic Pillar for 2020 including (firstly) promoting economic integration through the support for the implementation of the ASEAN Economic Community Master Plan 2025 and free trade agreements like RCEP. Secondly, Vietnam will boost regional economic connectivity and improve the adaptive capacity and take advantage of the opportunities of the Industry 4.0. Thirdly, Vietnam will foster effective development towards a dynamic, innovative and adaptive ASEAN economy. Finally, the country will strengthen trade facilitation in ASEAN.
As the ASEAN Chair in 2020, Vietnam will have to shoulder a very important task of promoting the conclusion of negotiations for the remaining contents in the RCEP agreement. Vietnam affirmed that it would continue to work closely with ASEAN countries in maintaining the leading role of ASEAN and coordinate with the six partner countries, to accelerate the conclusion of the full negotiations of RCEP and quickly complete the legal review of the agreed contents to prepare for the signing of the agreement.