The Regional Comprehensive Economic Partnership (RCEP – signed on November 25, 2020) and its impacts to Vietnam’s economy.

The RCEP Agreement is considered as the largest free trade agreement in the world, accounting for nearly 30% of global GDP and 30% of the world’s population. The RCEP Agreement is expected to create many new opportunities for businesses in the member countries.

Vietnam is one of the members participating in the discussion and signing of the agreement, along with 9 other ASEAN member countries (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand) and 5 countries partners (China, Japan, Korea, Australia and New Zealand).

1. Contents of the Agreement:

The RCEP Agreement consists of 20 chapters and appendices with main content on commitments in trade in goods and services, intellectual property, e-commerce and dispute resolution, …

Some important points:

• Remove according to the roadmap non-tariff barriers, simplify customs procedures;
• Establish common quarantine and technical standards;
• Establish general rules of Intellectual Property;
• Unify and harmonize common rules of origin (Instead of applying 5 sets of rules of origin of the current 5 FTA agreements with partner countries)

2. Impact on the Vietnamese market

RCEP has associated the three major economies in Asia through an FTA (China, Japan and South Korea) and allows to strengthen the regional supply chain for trade in goods.

The implementation of RCEP is expected to bring many benefits to Vietnamese enterprises and enterprises of the signatory countries:

2.1. Benefits for domestic businesses

• Establish a large, stable and long-term consumer market;
• Facilitate production scale expansion and export orientation;
• Create new opportunities for businesses to develop in fields such as telecommunications, information technology, textiles, footwear and agriculture, …
• Access to the production and export of products sourced from many countries within the block and be able to take advantage of the same preferential tariff rates.
• Increasing competitiveness of input materials, diverse choices of quality and price
• Get better protection against non-traditional trademarks and many industrial designs in the region,
• Online business has been made easier because of the clear legal framework;

2.2. Benefits for foreign investors:

• Business and investment conditions were loosened, unnecessary procedures were abolished
• Take advantage of the preferential tariff when exporting into Vietnam market
• Get better protection against non-traditional trademarks and many industrial designs in the region,…
• Expand the online business and having a clear legal protection mechanism; …