HANOI – Vietnam’s textile and footwear sectors are among those which will benefit from lower tariffs thanks to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) which has now been signed by Vietnam and 10 other countries. World Bank analysis claims multilateral trade agreements such as the CPTPP favour Vietnam’s investment and export driven growth model.
The CPTPP is essentially a revived version of the Trans-Pacific Partnership (TPP), minus the United States which withdrew last year as it was unhappy with the terms of the deal.
The withdrawal of the US was seen as a major blow to Vietnam, however, its textile industry has performed remarkably well in the past 12 months, with textile exports hitting US$31bn in 2017. Notably, despite the failure of theTPP agreement, textile and garment exports to the US market still hit US$10.2bn, up by 7.8 per cent over the year.
“Even under conservative assumptions, the [new World Bank] report estimates that CPTPP would increase Vietnam’s GDP by 1.1 per cent by 2030. Assuming a modest boost to productivity, the estimated increase of GDP would amount to 3.5 percent from CPTPP,” said Ousmane Dione, World Bank country director for Vietnam.
“The new agreement will bring direct benefits to Vietnam, from trade liberalisation and improved market access. Most importantly, it will help stimulate and accelerate domestic reforms in many areas,” added Sebastian Eckardt, the World Bank Lead Economist for Vietnam. “Delivering commitments under the CPTPP will contribute in promoting transparency and supporting the creation of modern institutions in Vietnam.”