The average trade weighted tariff imposed by Vietnam declines from 0.8 percent to 0.2 percent while the tariffs faced by the country are reduced from 0.6 percent to 0.1 percent between 2020 and 2035, it said.
In the most optimistic scenario, where all benefits are applied, Vietnam has the highest gains of all RCEP member countries, newswire Vietnam Briefing cited the report as saying. Vietnam’s income levels increase by 4.9 percent relative to the baseline, higher than other countries, where the income level increases by 2.5 percent.
Trade also increases the most in this scenario, with exports expanding by 11.4 percent and imports by 9.2 percent, relative to the baseline.”
According to the WB’s report, RCEP also provides an opportunity to promote growth and support recovery after the COVID-19 pandemic.
Vietnam and Malaysia are the countries that are expected to benefit the most from this agreement. RCEP will help Vietnam access consumer markets which is twice the size of the markets in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), as RCEP includes China, the Republic of Korea and Japan. However, it required Vietnam to raise standards to meet higher demand and stiffer competition.
Another advantage that RCEP brings to the country is that it is creating more equality in the job market because sectors that employ women are expanded, such as textiles, apparel, electronics and some service sectors. The wage of female workers will increase faster than that of male ones, especially in Vietnam.
The WB report said that the simplification of procedures such as customs and rules of origin will help reduce bureaucracy, allowing more small and medium enterprises (SMEs) to participate. These enterprises account for 98 percent of the total number of enterprises in Vietnam, contributing 40 percent of GDP. Thus, RCEP offers a chance for Vietnamese SMEs to increase the value chain.
Vietnam's economic growth will come from a deeper and more inclusive commitment through RCEP intra-regional trade, common rules of origin and greater openness to goods and services in accessing markets, especially the Chinese market, it said./.
Source: vietnamplus