Vietnamese enterprises expand exports and move deeper into the global value chain. Photo: T.Bình

Exports grow remarkably

After five years of implementation, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), with its large market-opening commitments, has opened up many opportunities for Vietnamese businesses to expand exports and further integrate into the global value chain. The situation regarding foreign direct investment (FDI) from CPTPP partners has also significantly improved.

With the implementation of the CPTPP, businesses have more preferential channels and advantages to exploit, especially since some CPTPP member countries have traditionally supplied inputs for many industries in Vietnam and control global production supply chains, such as Japan, Singapore, and Australia. As a result, Vietnamese businesses can boost production and ramp up exports to other member countries with which they had no previous free trade agreements (FTAs) before the CPTPP, or to markets that aspire to become future CPTPP members.

At the discussion forum “Joining the Supply Chain of FDI Enterprises – Enhancing the Utilization of CPTPP” on December 2, Ms. Nguyễn Thị Lan Phương, Deputy Director of the WTO and FTA Division, Multilateral Trade Policy Department (Ministry of Industry and Trade), stated that the CPTPP has brought significant benefits to Vietnam’s import-export and investment activities.

In particular, there has been impressive growth in the import-export turnover between Vietnam and CPTPP member countries, especially with markets that previously had no FTAs. For example, with Canada, Mexico, and Peru, the trade turnover has grown significantly. In 2023, Vietnam’s import-export turnover with these countries was about 12 billion USD, double that of 2019 before the CPTPP; the trade surplus also saw substantial growth, from 5 billion USD to 9 billion USD in 2023.

In the first nine months of 2024, positive growth in import-export turnover between Vietnam and CPTPP countries continued, reaching over 76 billion USD, a nearly 10% increase compared to the same period last year.

Additionally, foreign investors from CPTPP members like Singapore and Japan have actively entered the Vietnamese market to capitalize on the opportunities and advantages provided by the agreement.

Mr. Nguyễn Thành Trung, Director of CNCTech Thăng Long, a member of the CNCTech Group, who is involved in connecting and linking with Japanese businesses and multinational supply chains, said that joining the supply chains of FDI companies helps businesses build strategic partnerships with foreign companies, improve product quality, and develop human resources. It also helps enhance scientific and technological capabilities, enabling businesses to compete fairly with foreign companies.

Mr. Nguyễn Trung Hiếu, Head of Business Planning at Toyota Vietnam, shared that Toyota has had close cooperation with Vietnamese suppliers in recent years. For Toyota, increasing the number of local suppliers in its supply chain enhances the localization rate and helps reduce dependency on foreign suppliers, giving manufacturers much more control over domestic supply.

On the other hand, by applying the CPTPP, businesses now have more options and opportunities to consider sourcing components from Japan or other CPTPP members. Furthermore, when the CPTPP’s application timeline for the automotive industry reaches a 0% tariff rate around 2030-2031, it will help businesses compete better in the Vietnamese market.

Notably, “the perfect combination of input components for processing and manufacturing in Vietnam and exporting to a CPTPP market helps businesses find new customers and increase sales,” said Mr. Nguyễn Trung Hiếu.

Building Domestic Strength to Participate in Global Supply Chains

However, according to Ms. Nguyễn Thị Lan Phương, the implementation of the CPTPP has also shown that most businesses taking full advantage of these FTAs are FDI enterprises. Typical sectors benefiting include electronics components, footwear, textiles, and computers, while Vietnamese stronghold industries such as agriculture and seafood have seen relatively limited utilization of these agreements.

Furthermore, Vietnam’s market share in CPTPP countries is still limited. Not only with CPTPP but also with newer FTAs like EVFTA or UKVFTA, the share is below 10%. For markets like Mexico and Canada, the rate is under 2%, and the utilization rate of CPTPP preferences in 2022 was only about 5%.

A representative of the Multilateral Trade Policy Department stated that there are various solutions for businesses to take full advantage of the CPTPP or other FTAs in general. One of these is partnering with FDI businesses to form a supply chain. FDI enterprises are multinational corporations with capital, global management experience, and advanced technologies. If Vietnamese businesses can join the supply chains of FDI companies, they can learn from these "giants" to grow faster and integrate internationally more effectively.

Therefore, to join an FDI supply chain or engage directly with foreign businesses and partners, Vietnamese companies must make efforts to change and absorb opportunities in FTAs.

In return, it’s not just Vietnamese businesses that need to change, but there must be mutual cooperation—“give and take”—between FDI companies and Vietnamese businesses. FDI companies benefit from the value of Vietnam's land and from agreements like the CPTPP. Therefore, FDI companies must also make efforts to accompany Vietnamese businesses by providing training, sharing experiences, and transferring technology to improve management capacity, so that Vietnamese companies can grow and meet the standards to become suppliers for FDI companies./.