The first meeting of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) Commission was held in Tokyo and ended with a joint statement adopted by the ministers in charge of economy and trade from 11 member nations.
The joint statement affirmed their determination to fully enforce the CPTPP in support of trade liberalization, setting fair standards for trade as well as fostering economic growth and bringing benefits to both people and enterprises.
The attending ministers also approved several major decisions, covering the CPTPP Commission’s operation mechanism; (1) the process for admission of new members; (2) the process of the arbitral tribunal related to state-to-state settlement of disputes; and (3) a code of conduct for arbitrators related to the settlement of disputes between an investor and a state.
Japanese Prime Minister Shinzo Abe, in his opening remarks, affirmed the position that the member economies are determined to do their utmost to ensure that the CPTPP plays a leading role in trade liberalization at a time of rising trade protectionism.
Prime Minister Abe said that the CPTPP remains open for any nation and territory that wants to join. Affirming the Japanese Prime Ministers position, Vietnamese Minister of Industry and Trade Tran Tuan Anh said commitments are being implemented in an active, serious and full manner in the initial phase thanks to the thorough preparations of member states.
Minister Tran voiced his belief that the participating members will enforce the agreement effectively to bring benefits to both people and enterprises. According to him, the three challenges facing Vietnam are pressure during the enforcement process; increasing competitiveness in not only goods but also services; and measures to bring into full play opportunities brought by the CPTPP.
Koichi Ishikawa, a professor from Asia University’s Institute of Asian Studies, said that the CPTPP will help increase Vietnam’s exports of garments and textiles, footwear, farm produce, seafood and food.
He cited estimations by US experts that foreign trade of the 11 member states of CPTPP would increase 11.5% and that foreign investments would rise 3.5% by 2030. In particular, Vietnam would be the biggest beneficiary with growth of foreign trade expected to be 30.1% and investment expected to grow 14.4%.
The total gross domestic product (GDP) of the CPTPP countries exceeds US$10 trillion, nearly equal to China’s GDP, while import turnover is estimated at $2.33 trillion, surpassing both China and ASEAN’s figures. Prof. Ishikawa said that it’s logical that these numbers will be higher if more countries join CPTPP.
Prof. Ishikawa also commented on the issues concerning bilateral free trade agreements (FTAs) between CPTPP members and said there was no contradicting benefits between FTAs and CPTPP as FTAs have different lists of goods, rates of tariff preferences and rules on product origin. From the perspective of enterprises, they would exploit FTAs that bring the biggest benefits to them.
The CPTPP is expected to help Vietnam expand exports to both countries without bilateral FTA’s with Vietnam, such as Canada, Mexico and Peru, and countries that already have trade deals with Vietnam. However, in order for Vietnam to maximize its opportunities vis-à-vis the CPTPP membership, the country needs to continue to add, expand and upgrade its human resources and manufacturing capabilities to be competitive in the new business 4.0 era.
Vietnamese business people who attended the CPTPP talks in Tokyo pointed out the weakness in Vietnam’s supporting industries. They noted that Vietnam is still heavily dependent on imported machinery and equipment. According to the data compiled by the Japan External Trade Organization (JETRO in a survey of Japanese companies operating in Vietnam, 58.1% indicated they had difficulties finding materials and spare parts locally.