The Comprehensive and Progressive Pacific Partnership (CPTPP) will yield robust economic gains for Vietnam, the World Bank said in a report released Friday, as the Southeast Asian country and 10 other state members sign the agreement.

Multilateral trade agreements such as the CPTPP are expected to further boost Vietnam’s investment and export driven growth model, according to the report, titled “Economic and Distributional Impacts of Comprehensive and Progressive Agreement for Trans-Pacific Partnership: The Case of Vietnam”.

“Even under conservative assumptions, the report estimates that CPTPP would increase Vietnam’s GDP by 1.1 percent by 2030,” Ousmane Dione, World Bank Country Director for Vietnam, said in a statement.

“Assuming a modest boost to productivity, the estimated increase of GDP would amount to 3.5 percent from CPTPP.”

All income groups are expected to benefit from this new agreement, although higher-skilled workers in the top 60 percent of the income distribution may reap more. 

Canada's International Trade Minister Francois-Phillippe Champagne signs the Trans-Pacific Partnership (TPP) trade deal, in Santiago, Chile March 8, 2018. Photo: Reuters

In addition, the anticipated increase in FDI is expected to lead to a further expansion of services sectors and boost productivity growth, as well as creating opportunities for domestic private firms to integrate into global value chains and promote the development of the SME sector.

“The new agreement will bring direct benefits to Vietnam, from trade liberalization and improved market access,” Sebastian Eckardt, the World Bank lead economist for Vietnam, commented.

Eckardt underlined that the trade pact will help stimulate and accelerate domestic reforms in many areas for the Southeast Asian country.

“Delivering commitments under the CPTPP will contribute in promoting transparency and supporting the creation of modern institutions in Vietnam,” he added.

The CPTPP is expected to stimulate reforms in areas such as competition, customs, e-commerce, environment, government procurement, intellectual property, investment, labor standards, legal issues, market access for goods, rules of origin, non-tariff measures, trade remedies, according to the report.

Other services, including financial services, telecommunications, and temporary entry of service providers, will also benefit from similar boost.

Workers are seen at a mobile phone factory in Bac Ninh Province, northern Vietnam. Photo: Tuoi Tre

The report is supported by the Australia – World Bank Group strategic partnership (ABP II) which supports Vietnam’s development agenda through technical assistance, capacity building, and analytical work.

“Together with the World Bank, we are committed to helping Vietnam take advantage of the substantial economic opportunities created through CPTPP,” Australian Charge d’Affaires Rebecca Bryant said.

“This includes assistance to enhance competitiveness, reduce trade barriers, and improve connectivity”.

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