Vietnam is likely to be a key beneficiary of the Regional Comprehensive Economic Partnership (RCEP) when it comes to tariff cuts and foreign direct investment, Singapore’s leading consumer bank, DBS, said in a recent report.
According to the report, Vietnam’s average effective tariffs on intra-RCEP trade are in the middle of the pack at 1.2%, lower than those of South Korea, at 4.8%, or China, at 2.8%. He noted that Vietnam is among the ASEAN economies likely to benefit somewhat from the tariff reduction, given its high trade openness.
Meanwhile, the report pointed out that trade integration between Vietnam and RCEP members is already high and is expected to grow as companies reap the benefits of RCEP. Vietnam has regularly imported a significant amount of goods from RCEP partners.
The report also notes that RCEP gives Vietnam the opportunity to increase its exports to its partners. In addition, the pact also brings benefits to the country by increasing foreign direct investment (FDI).
He said: “Even though Singapore continues to receive the lion’s share of FDI inflows, inflows to Vietnam have been on an upward trend and ranked among the top three recipients within ASEAN-6. “
Vietnam continues to avail itself of multiple advantages to attract foreign investors, according to the report.
Signed in November 2020 and taking effect on January 1, 2022, RCEP brings together 10 ASEAN member states, as well as China, Japan, South Korea, Australia and New Zealand, covering 30% of product global gross domestic (GDP) worth $26.2. trillion.
It forms a market of 2.2 billion consumers and becomes the largest free trade zone in the world in terms of population. It will eventually eliminate tariffs on 92% of goods traded between its signatories, expand market access for investments, harmonize rules and regulations, and strengthen supply chains within the vast free trade area. .
VIET NAM NEWS/ASIA NEWS NETWORK