To help Vietnamese agricultural products take advantage of the RCEP Agreement

The pressure to compete for goods in RCEP is very large because many partners in the region have similar product structures to Vietnam but stronger competitiveness.

Large consumer market

The Regional Comprehensive Economic Partnership (RCEP) is a free trade agreement (FTA) between ASEAN and six partners with which it has an FTA. ASEAN are China, South Korea, Japan, India, Australia and New Zealand. With the total population of RCEP participating countries accounting for nearly one-third of the global population, RCEP is creating the world's largest free trade area. RCEP aims to eliminate up to 90% of tariffs within 20 years among members.

Currently, there are 6 countries participating in RCEP which are among the Top 10 largest sources of foreign direct investment in Vietnam, namely Korea, Japan, Singapore, China, Malaysia and Thailand. In addition, many countries in the RCEP bloc are also suppliers of many types of raw materials and equipment for production and export.

China is the main export market for dragon fruit. Photo: Tien Anh

According to the Import-Export Department, Ministry of Industry and Trade, in 2022 (the first year of RCEP implementation), Vietnam's agricultural exports to many RCEP countries all had better growth than in 2021. Specifically, the Australian market increased by 49.2%, Japan increased by 27.5%, and many ASEAN countries achieved an increase of 20%... By 2023 and in the first months of this year, exports of many types of agricultural products to many ASEAN countries and countries such as China, Korea, Japan... continued to achieve positive results.

Mr. Dang Phuc Nguyen - General Secretary of the Vietnam Fruit and Vegetable Association - commented that the RCEP Agreement helps Vietnamese fruit and vegetable exporting enterprises enter the largest market in the world; in which, Vietnam can be one of the countries receiving many benefits from the RCEP Agreement because most of the countries participating in the agreement have a need to import products that are Vietnam's strengths such as agricultural and aquatic products...

According to statistics, the export turnover of vegetables and fruits to China and countries in the Northeast Asian region such as Japan, Korea... currently accounts for nearly 80% of our country's export turnover. Northeast Asia is a market with a lot of potential for exporting vegetables and fruits.

In 2023, the export turnover of agricultural products and goods from our country to RCEP countries will reach about 146.5 billion USD, accounting for 41.3% of the country's total export turnover.

In the first half of 2024, export turnover to RCEP countries reached 72.9 billion USD, up 8% over the same period last year, accounting for 39.1% of the country's total export turnover.

Changing business thinking

According to the Vietnam Fruit and Vegetable Association, along with the Chinese market, in recent years our country's fruit and vegetable exports to South Korea and Japan have also increased sharply.

"In the coming time, our country needs to promote the expansion of export markets to RCEP countries, especially those in Northeast Asia; focus on diversifying export products, and developing the export of many new products," said Dang Phuc Nguyen, General Secretary of the Vietnam Fruit and Vegetable Association.

According to Mr. Nguyen, thanks to the harmonization of rules of origin within the RCEP bloc, Vietnam's export goods can increase their ability to meet the conditions to enjoy tariff preferences, thereby increasing exports in this region, especially in markets such as Japan, Korea, Australia, New Zealand, etc.

Import standards and consumer tastes among countries are also quite similar. Moreover, the geographical distance between the countries within the bloc is not too far, so logistics costs are lower and transportation is easier than in other markets such as the US, Europe, etc.

"However, the pressure to compete for goods in RCEP is very large because many partners in the region have similar product structures to Vietnam but stronger competitiveness. Currently, the quality and added value of most Vietnamese products are still modest... This pressure not only occurs in the export market but also in the domestic market. Foreign vegetables and fruits with good quality, beautiful designs and meeting food hygiene and safety will compete, and will even flood the Vietnamese market more. Meanwhile, Vietnamese people inherently prefer foreign goods," Mr. Dang Phuc Nguyen emphasized.

Enterprises need to change their business mindset in the new context to take advantage of opportunities from the RCEP Agreement. Photo: Thanh Tung

From a business perspective, Mr. Nguyen Dinh Tung - General Director of Vina T&T Company - shared that the benefits that the RCEP Agreement brings are creating favorable conditions for negotiations to open export markets for more agricultural products and fruits and vegetables than before. This is the core point and expectation of many export enterprises.

According to Mr. Nguyen Dinh Tung, through commitments to open markets for goods, services, investment, rules of origin of value in the RCEP region and trade facilitation measures of member countries, it also creates opportunities to develop new supply chains; in which, promoting the production of safe agricultural products according to international standards will become increasingly popular.

"Businesses with a good development foundation and quality products that meet market requirements will have a better chance of competing. On the contrary, mass-produced businesses that sell what they have will find it difficult to survive, not only in the export market but also being outclassed by imported agricultural products in the domestic market.

Therefore, businesses need to see FTAs in general and RCEP in particular as opportunities and motivations to improve product quality, perfect supply chain management, and enhance competitiveness to better meet market needs," Mr. Tung added.

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