Hanoi (VNA) – With the Comprehensive andProgressive Agreement for Trans-Pacific (CPTPP) officially coming into force,Vietnamese exporters should make the most use of the opportunities it brings inJapan, one of Vietnam’s leading trade partners.

Vietnam’s exports to Japan have seen steady growth over theyears, hitting 9.68 billion USD in the first half of 2019, up 9.1 percent fromthe same period last year. Key export items include textile and garment,seafood, machinery, wood products, mobile phones and electronic components.

As of the beginning of May, Japan was Vietnam’s secondlargest investor, running 4,118 foreign direct investment projects worth 57.3billion USD, mostly in processing and manufacturing, retail and real estate. Anestimated 2,500 Japanese firms, including leading conglomerates, have operatedin Vietnam, and many of them plan to expand.

The recent upswing in exports to Japan was thanks to thesigning of the CPTPP, of which both Vietnam and Japan are members. Under theCPTPP, Japan agreed to eliminate duties for most Vietnamese agricultural andseafood products.

Japan immediately lifted 86 percent of tariff lines for goodsfrom Vietnam, representing 93.6 percent of the latter country’s exports afterthe deal went into force. After five years, Vietnam will be exempt from about90 percent of tariff lines.

The CPTPP is hoped to bring tremendous benefits for bothcountries, said Deputy Minister of Industry and Trade Tran Quoc Khanh.

The trade deal will allow Japanese enterprises to enterVietnam’s growing public procurement market, which has been so far closed toforeign providers. Additionally, it would give those working in banking,insurance, construction, logistics, accounting and graphic design – areas Japanholds competitive edges – broader access to the Vietnamese market.

The CPTPP will strengthen Vietnam’s role as a productionbase for Japanese manufacturers and in return, Vietnamese firms will alsoreceive the same benefits when entering Japan, according to Yuri Sato,Executive Vice President of the Japan External Trade Organisation (JETRO).

Sato added that the agreement imposes strong protectionrequirements in terms of intellectual property rights and investment protection.For example, foreign companies now have the right to withdraw investment andrequire fair compensation and legal support if their assets are nationalised. Theserules could encourage Japanese firms to ramp up technological exports toVietnam.

Therefore, the CPTPP is expected to greatly facilitate theflow of trade and investment between the two nations by not only removingtariffs but also creating new business opportunities and allowing reduction oftrade and investment procedures.

Shibata Eiji, Vice Chairman of Japan-based AEON Group saidVietnamese goods have great potential in the Japanese market. In 2013, Japanimported Vietnamese tra fish for the first time with a very modest number of 5tonnes, but imports rose 20 times to 100 tonnes a mere five years later.

AEON wants to double import revenue of Vietnamese productsto 500 million USD by 2020 and raise it to 1 billion USD by 2025, the vicechairman noted.

To sustainably boost exports to Japan, Vietnam, first andforemost, needs an effective marketing strategy. The two sides should alsoprovide broader access for each other’s agricultural and seafood products andeffectively implement joint initiatives to improve the investment environmentand promote Japanese investment in Vietnam.

Minister of Industry and Trade Tran Tuan Anh said Vietnamjoining trade agreements like CPTPP will bring more export opportunities;however, the country would confront challenges, particularly growingcompetition from foreign rivals for agricultural and seafood products.

The minister suggested Vietnamese producers seek partnershipswith Japanese firms to utilise their capital and technology, hereby gainingstronger foothold in the Japanese market and playing a greater part in regionaland global supply chains. –VNA