Suitable policies related to RCEP should be planned now

The RCEP was signed on November 15, 2020

A workshop on RCEP was organised by the Central Institute for Economic Management (CIEM) and Aus4Reform in late January titled “Effectively materialising the RCEP and improving the economy’s self-control: Demanding for improvements in Vietnamese legal frameworks regarding commerce and trade” to publish the report and also support local governments in mapping out solutions to increase benefits from the agreement.

The main content of the report includes a comparison of the RCEP and other free trade agreements (FTAs) that Vietnam is party to. Based on that, local policymakers can easily pinpoint problems related to the legal institutions that could hamper the economy from getting benefits of the latest agreement.

“They can also help the government to issue suitable policies to take maximal advantage of the RCEP,” said Tran Thi Hong Minh, director of CIEM.

According to the document, one of the big concerns is that Vietnam would not benefit from the agreement and that it would enlarge the trade gap with other members. In comparison with the EU-Vietnam Free Trade Agreement and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the RCEP’s requirements are comparatively lower, resulting in expectations of imports exceeding exports.

For foreign investment, in addition to the great chances of luring in more investors thanks to the trend of moving out of China, inspecting the quality of foreign investment flows are not easy at all, leading to some corollaries on the local macroeconomy.

“The adversities may also hamper the economy’s self-control, demanding in-time solutions. Nevertheless, the measures should initially be mapped out under comprehensive views, from legal frameworks to investment issues,” said Nguyen Thi Thu Trang, director of the Centre for WTO and Economic Integration at VCCI.

The report recommended the government to continue economic reforms, give priority to completing investment policies, developing trade policies towards being uninformed with investment policies, resolve obstacles related to infrastructure and human resources, and efficiently prevent the COVID-19 pandemic.