Illustrative photo (Source: VNA)
According to the report, Vietnam’s average effectively applied tariffs on intra-RCEP trade are middle of the pack at 1.2 percent, lower than that of the Republic of Korea, at 4.8 percent, or China, at 2.8 percent. It noted that Vietnam is among the ASEAN economies likely to benefit somewhat from tariff reduction, given its high trade openness.
Meanwhile, the report pointed out that trade integration between Vietnam and the RCEP members is already high, and should grow tighter as companies tap RCEP benefits. Vietnam consistently imported a significant amount of goods from RCEP partners.
The report also noted that RCEP gives Vietnam the opportunity to increase exports to its partners. In addition, the pact also brings benefits to Vietnam in increasing foreign direct investment (FDI). It said: “Even though Singapore continues to receive the lion share of FDI inflows, inflows into Vietnam have been trending higher, and have ranked among the top three recipients within ASEAN-6.” Vietnam continues to boast multiple advantages to attract foreign investors, the report affirmed.
Signed in November 2020 and taking effect on January 1, 2022, RCEP brings together 10 ASEAN member states, along with China, Japan, the Republic of Korea, Australia and New Zealand, covering 30 percent of the global gross domestic product (GDP) worth US$26.2 trillion.
It forms a market with 2.2 billion consumers, and becomes the largest free trade area in the world in terms of population. It will eliminate tariffs on as much as 92 percent of goods traded between its signatories eventually, expand market access for investment, harmonise rules and regulations, and strengthen the supply chains within the massive free trade zone.