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Challenges from CPTPP

​Domestic enterprises, especially medium and small ones are currently lacking of resource, strategies and information to take the advantages of the Free trade agreements.


​These limitations were pointed out at the 2017 summary and orientations and plans for 2018 meeting on March 12.
 
Lack of resource
 

 

On March 8, the Comprehensive Partnership and Trans-Pacific Partnership (CPTPP) was signed by 11 countries, including Vietnam, in Chile and is expected to take effect from five years on. 2019. Before that, Vietnam has also signed many Free Trade Agreements (FTAs) with other countries.

 

Participation in FTAs with commitments to reduce tariffs on goods and open markets for services of participating countries promises to open up great opportunities for Vietnam to boost export of goods. However, with the big opportunities, the competition will be more acute. If domestic enterprises do not renew themselves, improve production capacity, finance and human resources, they will be eliminated. While this is a long-standing weakness of domestic enterprises in general and Dong Nai in particular.
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 Director of the Department of Industry and Trade - Duong Minh Dung giving speech at the meeting.
 
According to the director of the Department of Industry and Trade – Mr. Duong Minh Dung, the recently concluded CPTPP has predicted that agriculture in Vietnam will be the most challenging field. The cause is that our country's agriculture still has a small production, does not concentrated, and is not applied science and technology to production, therefore, weak competitiveness. "If we do not change, we can lose at home," said Mr. Dung.
 
Sharing the same comment, General Secretary of the Association of Dong Nai Chau Minh Nguyen said that agricultural production in Vietnam in general and Dong Nai in particular is in the state of "anything but nothing to sell. " "Customer accept our products, but when it comes to selling we cannot provide enough. As the grapefruit, when introduced, customers accepted and requested 2 containers a month; however, our output was not enough. Or like durians in the US markets, they appreciate and want to buy them but we do not have enough products to sell," said Mr. Nguyen.
 
Similarly, for the supporting industry, General Secretary of the Dong Nai Association of Businesses said that when participating in FTAs, domestic enterprises will have more opportunities to participate in the global value chain. However, the biggest limitation is that the majority of supporting industrial enterprises in Dong Nai still lack a long-term development strategy, which is just as good as they have been.
 
Talking about enterprises restricted information on the current FTA, Vice Chairman of the provincial People's Committee – Mr. Tran Van Vinh said that the authorities need to invite negotiating experts to talk with the enterprises. And must be done for each type. "We have to make enterprises aware of what the future business environment is all about, not just one market place. Or else, it will be too late at the last minute, enterprises will suffer from lost, "Vice Chairman of the provincial People's Committee stressed.
 
Lack of information
 
In addition to the lack of resource and weak competitiveness, another weakness for businesses to take advantages of FTAs is the lack of information. According to Mr. Chau Minh Nguyen, many years of organizing information and propaganda about the FTA, the authorities have done it but not effectively. Many experts were invited to train the enterprises but only stopped at simply emphasizing opportunities and challenges, while the core issue is what the business needs to do to be able to enjoy the incentive when participating in FTAs are not indicative. "The enterprises they knew all of the opportunities and challenges, through newspaper and internet. But no one is able to tell them what to do with that,” said Mr. Nguyen.
 
Mr. Nguyen also said that most of the businesses in the province nowadays do not have much knowledge about the concept of "Technical barriers to trade (TBT)” made by the countries participating in the FTA. "The countries that signed agreements were very open, the tariffs fell sharply but then they created the TBTs. It is dangerous that most enterprises do not have information on TBT, " noted Mr. Nguyen.
 
From the above facts, Mr. Nguyen suggested that the Department of Industry and Commerce need to implement a number of training courses for enterprises. However, experts should be invited, to be able to get deeper into the specific content. "The CPTPP Agreement has just been signed, and likely to be applied in early 2019. So we have about a year to prepare. With a very wide market, which sounds satisfying, but I think the stage of understanding and preparation is very important, especially for small and medium enterprises, "Mr. Nguyen emphasized.
 
Sharing the same comment, Mr. Pham Viet Phuong - deputy director of the Department of Planning and Investment, said that with the signed FTAs, if we do not have an early and thorough preparation, it is very difficult to take the opportunities. Therefore, the immediate action required is to ask the functional departments and associations to set a specific plan for each sector to guide and support the enterprises. "Enterprises need to know what their advantages and disadvantages are. It is the responsibility of the authorities to inform the business of these issues, the guidance should be specific and focusing on each sector, " Mr. Phuong suggested.
 
According to Deputy Director of the Department of Planning and Investment - Pham Viet Phuong, the CPTPP has a lot of contents, so the Provincial Committee for Economic Development should set up a research team to study thoroughly this agreement. Because of the general implement as today, we will not know which specific tasks are for which sector. The research team will review and see what content, what field need to be done, and from which to synthesize specific directions for each group of enterprises in each specific field.
 
Assoc. Tran Dinh Thien, Director of Vietnam Institute of Economics: A train head is needed
 
Assoc. Tran Dinh Thien, Director of the Vietnam Institute of Economics, said: "For Vietnam, since we approached the CPTPP, both the structure and the institution have changed positively but the starting point is low; so the deeper we integrate, the greater challenge we shall face.
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* P.V: Fin order for enterprises to take advantage of the CPTPP, what do they and local governments need to do?

- Assoc. Tran Dinh Thien: I thing we still have a lot of things to do. We have finished negotiations but our economic power has not changed much, the real competitiveness of enterprises is very weak. The environment has improved, it will tackle a long time to turn it into the real competitiveness for the enterprises. At present, the competitiveness in prices and products of enterprises is very weak, especially the lack of leaders who lead the competition, letting 95% of small and medium enterprises "wandering around" today is a serious issue. One issue to keep in mind is that we pay too much attention to small and medium enterprises, while this force is not enough. As small and medium enterprises only grow up relying on large enterprises, clinging to large businesses, like a wall must rely on its reinforced, to develop into private corporations. Currently, the way we approach the private corporations is stigmatized, unfair and “backdoor” is still happening. We should encourage winners, good people, good businesses ... to become the core of Vietnamese enterprises. Thus, together we can make the "business forces" to connect with the foreign countries and carry on technology transfer.

Recently, the Government has made many efforts to reduce costs, facilitate businesses to be less tied up, increase initiative, upgrade infrastructure to reduce costs, and the rest depend on the enterprises’ competitiveness. However, do not expect this to happen "sooner or later" because the game of competition is long-term.

In Dong Nai, A lot of FDI has been attracted, the government has attracted businesses, creating a good environment, but perhaps Dong Nai should do much more. Dong Nai must become a smart enterprises serving government, for which to come true, the government shall reform more strongly. Dong Nai, on the other hand, needs to be more active in becoming a leader in creating a developed government.
 
N. Trinh - Quỳnh Nhi
 
 
 
 
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