RCEP creates a "silk road" for Vietnamese goods to exploit the ASEAN market

After nearly 3 years of implementation, the Regional Comprehensive Economic Partnership (RCEP) Agreement is assessed to bring high efficiency to Vietnamese export goods.

Increasing market share of Vietnamese goods in ASEAN market

RCEP is a Free Trade Agreement (FTA) between 10 ASEAN countries and 5 partners that have FTAs ​​with ASEAN: China, Japan, South Korea, Australia and New Zealand.

RCEP, which will come into effect on January 1, 2022, has created a large market of 2.2 billion consumers, accounting for about 30% of the world's population, with a GDP of nearly 27 trillion USD, accounting for about 30% of global GDP.

In particular, the ASEAN market has always played a very important role in Vietnam's import and export activities for many years. When the RCEP Agreement was signed and implemented, Vietnamese enterprises took full advantage of this agreement, as shown by the strong growth in export turnover to countries in this Agreement in recent times.

Mr. Quyen Anh Ngoc - Head of ASEAN Department, Multilateral Trade Policy Department (Ministry of Industry and Trade) - said that according to the RCEP Agreement, ASEAN countries will eliminate tariffs for Vietnam on about 85.9 - 100% of tax lines; the longest roadmap is from 15-20 years from when the FTA takes effect.

In addition, partner countries will eliminate tariffs for Vietnam on about 90.7 - 98.3% of tax lines; the longest roadmap is 15-20 years from when the FTA takes effect.

In 2023, Vietnam's exports to the ASEAN market will reach 32.5 billion USD. In the first 10 months of 2024, Vietnam also brought in 30.6 billion USD from exporting goods to the ASEAN bloc, an increase of 13.9% over the previous period and making it the fourth largest market.

A representative of the Vietnam Trade Office in Singapore said that in the first 10 months of 2024, Vietnam remained Singapore's 12th largest trading partner. Vietnam's three main export groups to Singapore continued to increase sharply, specifically machinery, equipment, mobile phones, components and spare parts of all kinds; boilers, machine tools and spare parts; glass and glass products.

"Some other export industries also have very strong growth, such as iron and steel; optical machines, measuring instruments, medical equipment, watches, musical instruments and accessories of all kinds. In particular, Vietnam is currently the country with the largest market share in Singapore for the three rice groups," the Trade Office informed.

Vietnamese coffee is one of the products favored by the ASEAN market. Photo: Tien Anh

In terms of products, in the ASEAN bloc, Vietnam exported 34,654 tons of coffee to Thailand, up 29.1% in value compared to the same period last year (YoY); Malaysia with 28,703 tons, up 64.5% YoY; Myanmar with 1,954 tons, down 35.9% YoY; Cambodia with 1,862 tons, up 49.7% YoY; Singapore with 1,250 tons, up 10.4% YoY; Laos with 118 tons, up 4.4% YoY.

The Philippines is Vietnam's largest rice consumer market with a market share of over 45%. By the end of October 2024, the Philippines imported 2.91 million tons of rice from Vietnam, accounting for more than 79% of the Philippines' total 3.68 million tons of imported rice. The next largest markets are Indonesia and Malaysia. Among the 15 largest rice export markets of Vietnam, the export value of rice increased the most in the Malaysian market with an increase of 2.3 times.

Focus on niche market

Mr. Nguyen Thanh Huy - Head of Vietnam Trade Office in Thailand - said that Vietnam has many regional specialties, including many products with geographical indications recognized by the world, so in communicating and introducing products, it is necessary to spread the story about the product.

"Businesses need to know how to tell stories about their precious raw material regions, thereby creating unique marks and identities for Vietnamese products, in order to make their mark on the Thai market," Mr. Huy emphasized.

Besides, exploiting niche markets is also very important. According to the assessment report of the Ministry of Industry and Trade, Vietnam has many opportunities to expand the export of agricultural products and food to ASEAN, especially countries with a majority of Muslim people (Indonesia, Malaysia, etc.).

However, most agricultural and food products imported into ASEAN countries require Halal certification (a certification to qualify for exporting goods and food to Muslim countries). Meanwhile, many Vietnamese enterprises do not meet this standard, so they cannot access this potential niche market segment.

Production activities at Vietnam Cinnamon Production and Export Joint Stock Company. Photo: Yen Giang

According to Mr. Nguyen Huu Nam - Deputy Director of VCCI Ho Chi Minh City branch, ASEAN is the fourth largest export market of Vietnam after China, the US and the EU. Therefore, businesses must change drastically to "attack" this market. ASEAN countries have quite different cultures, so businesses must change drastically to "attack" this market.

"Big markets are important, but niche markets are also very important, businesses should not waste them," Mr. Nam emphasized.

Trade barriers set up by some ASEAN countries are also considered to be the reason for the restriction of Vietnamese exports to ASEAN. Ms. Nguyen Thi Thu Trang - Director of the WTO and Integration Center (Vietnam Federation of Commerce and Industry - VCCI), cited that in recent times, Indonesia, the Philippines, and Thailand have imposed many non-tariff measures that restrict trade on Vietnamese exports such as iron and steel, cement, ceramic tiles, and fibers.

Therefore, in the coming time, state management agencies need to provide market information and guide businesses on how to approach and access opportunities in the ASEAN market. In addition, it is necessary to regularly monitor to promptly detect and take measures to combat and handle restrictive policies and trade barriers against Vietnam's export products with strengths.

Source: https://congthuong.vn/rcep-tao-con-duong-to-lua-cho-hang-viet-khai-thac-thi-truong-asean-359186.html