HO CHI MINH CITY CAMPUSECONOMIC RELATIONS BETWEEN VIETNAM AND COUNTRIES OF THE COMPREHENSIVE AND PROGRESSIVE AGREEMENT FOR TRANS-PACIFIC PARTNERSHIP CPTPP Class: K59CLC1 – Team: 01... P
INTRODUCTION 1.1 Rationale of the research
Research background
Since Vietnam joined CPTPP, there has been extensive literature evaluating the country’s relationship within the agreement However, a large portion of this research stops short of a deep examination of the economic ties between Vietnam and CPTPP member economies, especially regarding investment flows and trade dynamics.
“CPTPP Signed: “Opportunities for Vietnam’s Enterprises”, news on Vietnam
March 16, 2018 briefing predicted the opportunities and challenges Vietnam’s economy would face after signing the CPTPP and outlined the steps Vietnam should take to address these challenges Since the report was written immediately after Vietnam joined the CPTPP, it remained an initial conjecture with limited empirical grounding for its analysis.
According to a World Bank report by Nguyen Hong Ngan, the CPTPP would bring direct economic benefits to Vietnam and catalyze domestic reforms The report argues that Vietnam could secure robust economic gains from CPTPP, strengthening growth and competitiveness, even though earlier coverage of the news appeared to lack clear statistics or concrete evidence to substantiate the claim.
Aims & Objectives
Tran Huong Lan of the Institute for Trade Strategy and Policy Studies at the Vietnam Academy of Science and Technology presented policy recommendations and implications for maximizing Vietnam’s benefits from participation in new-generation FTAs, with a focus on CPTPP, to boost import-export performance and drive economic development, highlighting targeted measures to enhance competitiveness, streamline trade procedures, and strengthen institutional capacity, while noting that the report does not address investment relations.
“Taking full advantage of opportunities from CPTPP”, news on the Ministry of
Vietnam's Industry and Trade Ministry indicates that the CPTPP has initially yielded positive effects on foreign trade activities, but many opportunities from the agreement have not been fully explored The analysis so far has focused primarily on trade activities and on strategies to access other potential CPTPP markets, while investment relations between Vietnam and CPTPP member economies have not been adequately addressed.
Khoi Nguyen's report, "Vietnam gets to grips with CPTPP," surveys opinions from numerous economic consultants about Vietnam's accession to the CPTPP and highlights the country's potential to broaden trade networks and attract more investment It also notes that, while there are many opportunities, the existing statistics on Vietnam's investment and trade with CPTPP members are limited, making it harder to quantify the agreement's impact.
The research is conducted for:
● People’s understanding clearly about CPTPP and the economic relation between Vietnam and other countries in this Agreement.
● People’s understanding the meaning of CPTPP to Vietnam in term of economic development. download by : skknchat@gmail.com
● People’s knowing about missions, challenges, problems of Vietnam when joining CPTPP.
● People's vision for the development of Vietnam in the future with CPTPP as well as its plan of going further in development.
● Analysing the information about Vietnam and CPTPP.
● Searching for the profits, the problems and how can we solve those problems.
Scope of the research
Economic relations (Investment and Trade) between Vietnam and countries of Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
● Space range: research on how CPTPP impacts Vietnam’s economy on investment and trade among trans-pacific countries.
Data span 2008–2020 and come from scientific research conducted under the TPP and CPTPP frameworks The foundational data are gathered through qualitative and quantitative methods, organized according to topic-focused research.
Research methods
The research uses both qualitative and quantitative research to collect secondary data.
By integrating qualitative research findings with official secondary data, the authors identify and categorize Vietnam's CPTPP partner relationships and interpret the patterns of business relations between Vietnam and the other member countries.
Quantitative research collects statistical data from intracen.com and trademap.com to identify trends in Vietnam’s economic relations with CPTPP member countries This data-driven analysis clarifies the development trajectory of Vietnam’s trade and investment links within the CPTPP framework, enabling forecasts of future growth and the identification of opportunities and challenges for Vietnam in the regional economy.
Contribution of the research
This study is among the first to examine the economic relationship between Vietnam and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), with a particular focus on two key dimensions: investment and trade By analyzing how CPTPP participation shapes Vietnam’s investment inflows and its trade flows, the research provides early insights into the Vietnam–CPTPP economic linkage.
This research is conducted based on learning from deficiency of the older research and it develops ideas from the pioneer ones in related fields.
This research is conducted in a new background with new statistics.
Structure of the research
This research includes 4 main parts, and each part is divided into smaller categories: Part 1: Introduction
Part 2: Overview of Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
Part 3: Economic relations between Vietnam and countries of Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
OVERVIEW OF VIETNAM’S TRADING PARTNERS 2.1 Overview of Vietnam’s trading partners
Definition
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a proposed trade agreement currently under negotiation among 11 Asia-Pacific economies, including Brunei, Canada, Australia, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam The CPTPP was concluded on 23 January 2018 in Tokyo, Japan, and signed on 8 March 2018 in Santiago, Chile.
Feature
The CPTPP delivers strong market-access commitments across goods, services, investment, labor mobility, and government procurement, while establishing rules to foster a cohesive, open, and fair business climate through chapters on technological barriers to trade, sanitary and phytosanitary measures, customs administration, accountability, and state-owned enterprises It also includes enforceable environmental and labor rights provisions via dispute resolution to ensure members uphold commitments as trade and investment grow, and it covers trade-related technical cooperation—supporting SMEs, regulatory coherence, and sustained economic growth.
Classification
- Group 1- Developed countries: Australia, Japan, Singapore, Canada, New Zealand.
- Group 2- Developing countries: Malaysia, Mexico, Peru, Brunei Darussalam, Chile.
Overview of members grouping
Australia's economy is a robust market economy driven by a dominant service sector The service industry accounts for about 68% of GDP, the largest share among the three major economic sectors Agriculture and mining together contribute roughly 30% of GDP, reflecting the country's diverse natural resources Australia also exports primarily agricultural products—especially cereals and wool—and a range of minerals, including metals, coal, and natural gas.
New Zealand maintains a highly developed free-market economy and ranks as the 51st largest national economy in the world by nominal GDP It boasts a large GDP relative to its size and population, with a diverse economy where the service sector accounts for 63% of total GDP activity Large-scale manufacturing industries include aluminum production, food processing, metal fabrication, and wood and paper products The primary sector continues to dominate New Zealand's exports, even though it makes up only 6.5% of GDP The information technology sector is growing rapidly, adding momentum to the economy's ongoing expansion.
Japan is a highly developed free-market economy and ranks as the third-largest in the world by nominal GDP, as well as the world’s second-largest developed economy The International Monetary Fund reports Japan’s per-capita GDP at $41,637 in 2020, placing it 22nd globally The country is a powerhouse in manufacturing, ranking third in automobile production and boasting the largest electronics goods industry Japan is also widely recognized for its strong culture of innovation, consistently ranking among the most innovative nations.
Singapore’s economy is widely regarded as one of the most open and pro-business in the world, supported by a low tax rate of about 14.2% of GDP and one of the highest per-capita GDPs globally The Asia-Pacific Economic Cooperation (APEC) Secretariat is headquartered in Singapore, where state-owned enterprises play a substantial role in the economy Singapore is a major hub for foreign direct investment, driving outward FDI while also attracting significant inflows from global investors and institutions due to its stable political environment and highly attractive investment climate.
Canada's economy is a highly developed market economy, ranking 9th in nominal GDP and 15th in GDP (PPP) worldwide As in other advanced economies, the service sector dominates, employing about three-quarters of Canadians Canada has one of the world’s largest resource endowments, with natural resources valued at US$33.2 trillion (2019) and the third-largest proven petroleum reserves, making it the fourth-largest exporter of petroleum and the fourth-largest exporter of natural gas With abundant resources and a relatively small population of about 37 million over a vast land area, Canada is often regarded as an energy superpower.
Brunei is small in land area but surprisingly wealthy, driven largely by the export of crude oil and natural gas The petroleum sector generates more than half of Brunei’s GDP, underscoring its economic reliance on oil and gas The country is the third largest oil producer in Southeast Asia, averaging about 180,000 barrels per day.
According to the IMF, Malaysia is the sixth-largest economy in Southeast Asia and the 39th-largest in the world, with a newly industrialized market economy that is relatively open and state-oriented The economy is robust and diversified, highlighted by high-tech product exports of US$57.258 billion, the second-highest in ASEAN after Singapore Malaysia also exports the second-largest volume and value of palm oil products globally, behind Indonesia.
Chile is a high-income nation according to the World Bank and stands as one of South America’s most prosperous countries, leading the region in competitiveness, income per capita, globalization, economic freedom, and a low perception of corruption However, the country also faces pronounced income inequality and is ranked 41st in nominal GDP globally.
Mexico is the 16th largest economy in the world by nominal GDP and 11th by purchasing power parity according to the IMF The Mexican economy has benefited from unprecedented macroeconomic stability, with inflation and interest rates at record lows and per-capita income rising as a result Yet large gaps remain between urban and rural areas, between northern and southern states, and between the rich and the poor Key policy priorities include upgrading infrastructure, modernizing the tax system and labor laws, and reducing income inequality.
Peru's economy is an emerging social market economy with a strong emphasis on foreign trade, and it is classified by the World Bank as an upper-middle-income country It ranks as the 47th largest economy in the world by GDP, and in 2012 it was among the fastest-growing economies, with a 6.3% GDP growth rate However, Peru's economy remains heavily dependent on commodity exports, which leaves it vulnerable to price volatility in international markets.
ECONOMIC RELATIONS BETWEEN VIETNAM AND
Investment relation between Vietnam and developed
3.1.1.1 Inward FDI flows: download by : skknchat@gmail.com
Japan was Vietnam’s leading investor, with FDI inflows of 9,204.65 million USD in 2017, followed by Singapore at 5,894.86 million USD that year Among developed-country investors in the agreement, New Zealand accounted for the smallest average annual inflows at around 18.63 million USD However, New Zealand’s FDI activity grew significantly over the period, with 2019 inflows 5.81 times higher than in 2009, signaling increasing interest in Vietnam.
From 2009 to 2019, FDI inflows to Singapore and Japan fluctuated, but both countries experienced a rapid rise in 2016–2017, around the time the agreement was signed Over the eleven-year span, FDI from other countries remained unchanged.
Vietnam hadn’t invested much in other countries, except for Japan and Australia. But its investment in Canada grew dramatically from 2017 to 2019.
According to Investment Map, Vietnam's direct investment is dominant in Japan and Australia, marking these markets as the primary destinations for Vietnamese FDI Inward FDI to Japan fluctuated moderately over time but rose sharply from 2018 to 2019 In contrast, FDI inflows to Australia grew significantly from 2014 to 2019, increasing by nearly 3,000 times.
Vietnam’s outward FDI flows by developed partners in CPTPP
Singapore Japan Australia Canada New Zealand
Singapore and Japan always held the leading position in FDI stocks values in
Vietnam and the values increased markedly and both hit the peak in 2019 (the investment stocks by Singapore increased 3 times from 2009 to 2019 and Japan’s increased 3,5 times).
The inward FDI stocks by the other countries in developed group remained unchanged or just changed slightly and gradually. download by : skknchat@gmail.com
Vietnam has strong outward FDI stocks toward Australia and Singapore, its ASEAN partner Specifically, outward FDI stocks from Vietnam to Singapore rose over time, reaching about 7.3 times the 2009 level by 2019, while outward FDI stocks to Japan in 2019 were nearly 4 times the 2009 level.
Vietnam's outward FDI stock remains skewed toward domestic investments, with FDI stocks in other countries accounting for a smaller share of the total outward FDI stock However, this overseas portion has shown a rising trend since the signing of the Trans-Pacific Partnership (TPP).
Investment relation between Vietnam and developing
According to statistics from Investment map, Vietnam has few investments by most of developing countries except for its partner in ASEAN - Malaysia Besides, Mexico is focusing more on investing in Vietnamese enterprises.
Unit: Million dollars download by : skknchat@gmail.com
Inward FDI flows by developing partners in CPTPP
Vietnam has few investments as well as its value in developing countries Outward
FDI flows in Peru by Vietnam increased every year Its investments in Malaysia increased from 2009 to 2014 but it stopped and tended to decrease from 2014 For the other countries, Vietnam had few to zero investment plan in them.
Vietnam’s outward FDI flows by developing partners in CPTPP
Figure 3.1.2.2 download by : skknchat@gmail.com
Among CPTPP developing countries, Malaysia recorded the largest inward FDI stock in Vietnam, totaling 1,1220.79 million dollars in 2014 Investment levels fluctuated from 2009 to 2016, but since 2016 they have shown a growth trend In contrast, other CPTPP members had relatively few investment projects in Vietnam during this period.
Vietnam’s inward FDI stocks by developing partners in CPTPP
Vietnam’s outward FDI stocks are concentrated in developing economies, especially Peru and Malaysia The most substantial investments were 1,336.88 million USD in Peru in 2013 and 1,220.79 million USD in Malaysia in 2014 Peru’s outward FDI remained stable, while Malaysia’s outward FDI declined.
6,5% the next year and stabilized.
Vietnam had little outward FDI stocks in Brunei and almost few investments in any project of other countries.
Unit: Million dollars download by : skknchat@gmail.com
Vietnam’s outward FDI stocks by developing partners in CPTPP
Trade
Since the CPTPP came into force with Vietnam on January 14, 2019, Vietnam's import and export patterns have shifted significantly across CPTPP member economies, especially in key product groups such as machinery, fish and crustaceans, and footwear The agreement's tariff reductions and streamlined rules of origin have expanded market access, altered competitive dynamics, and reshaped supply chains for these sectors, driving new trade flows and investment in manufacturing and processing within Vietnam.
Textile and Telecomunication and electronic components.
The countries involved in the CPTPP are divided into three groups of countries based on the specific region.
First, the Americas include Canada, Mexico, Chile and Peru
Second, Asia includes Japan, Singapore, Malaysia and Brunei
Finally, the Oceania region includes Australia and New Zealand
3.2.1.1 Vietnam's imports from countries in America:
Unit: USD Thousand download by : skknchat@gmail.com
In general, there are two-dimensional trends taking place between countries in
Firstly, in terms of up trend, there are Mexico and Canada Specifically, Mexico rose from $287,066 million in 2018 to $303,793 million in 2019 and Canada rose from
$99,746 million in 2018 to $133,307 million Thereby, seeing Canada's annual import rate increase higher than Mexico's annual import rate is 33.6% compared to 5.8%.
Secondly, in terms of steady and somewhat declining trends, there are Chile and Peru Specifically, Chile dropped from $65,095 million in 2018 to $65,079 million in
2019 and Peru dropped from $3 million in 2018 to $1 million in 2019 As a result, Chile's annual import rate decreased by 0.02% and Peru's annual import rate decreased by 66.67%.
3.2.1.2 Vietnam's imports from countries in Asia:
Unit: USD Thousand download by : skknchat@gmail.com
Across Asian economies, two notable upward trends in import activity occurred from 2018 to 2019, led by Japan and Malaysia Japan's imports rose from $8,920,358 in 2018 to $9,310,638 in 2019, while Malaysia's imports increased from $2,370,854 to $2,530,675 in the same period This yields annual import growth of about 4.4% for Japan and 6.7% for Malaysia, meaning Malaysia's import growth rate exceeded Japan's by roughly 2.3 percentage points Overall, both countries show positive import growth, with Malaysia displaying the stronger year-over-year increase.
On the downtrend, Singapore and Brunei experienced declines in annual import values, with Singapore dropping from $839,687 in 2018 to $731,309 in 2019 (a 12.9% decrease) and Brunei slipping from $147 in 2018 to $80 in 2019 (a 45.6% decrease).
3.2.1.3 Vietnam's imports from countries in Oceania:
Unit: USD Thousand download by : skknchat@gmail.com
It can be seen that both countries tend to increase Specifically Australia increased from $64,574 in 2018 to $64,609 in 2019 and New Zealand increased from $21,449 in 2018 to $29,629 in 2019.
3.2.2.1 Vietnam's exports to countries in America:
Unit: USD Thousand download by : skknchat@gmail.com
In general, all four countries have a strong up trend, especially Canada and Mexico. Specifically, Canada increased from $1,344,338 in 2018 to $1,907,681 in 2019 and Mexico increased from $1,174,650 in 2018 to $1,799,717 in 2019.
Vietnam's exports to the Americas are showing a positive trend, signaling strong demand from major markets in the region The latest figures indicate that buyers in the Americas are increasingly trusting Vietnamese goods across core categories, including machinery, fish and crustaceans, footwear, textiles, telecommunications equipment, and electronic components.
3.2.2.2 Vietnam's exports to countries in Asia:
Unit: USD Thousand download by : skknchat@gmail.com
From the line chart we can see that Vietnam's exports to Asian countries in the CPTPP have taken place in two directions.
Firstly, the two countries with a strong up trend are Japan and Brunei, especially Japan The chart shows that Vietnam's export to Japan increased from $7,537,711 in
2018 to $8,057,675 in 2019 and Vietnam's export to Brunei increased from $3,610 in
Secondly, two countries having tendancy to decrease are Singapore and Malaysia As can be clearly seen from the graph, Vietnam's export to Singapore decline from
$1,517,426 (2018) to $1,377,989 (2019) and Vietnam's export to Malaysia drop from
3.2.2.3 Vietnam's exports to countries in Oceania:
Two trends define Vietnam's trade with the Australia–New Zealand region Exports to Australia show a slight decline, falling from $1,897,985 in 2018 to a lower figure in the following years In contrast, exports to New Zealand rise steadily over the same period, reflecting growing demand in the Kiwi market Together, these patterns suggest diverging market dynamics and the need for tailored export strategies for each country.
$1,848,854 in 2019 On the other hand, Vietnam's export to New Zealand increased from $328,866 in 2018 to $348,970 in 2019. download by : skknchat@gmail.com
FINDINGS AND CONCLUSION 4.1 Findings
Conclusion
Vietnam plays a proactive and vital role in advancing mega-regional trade agreements, including the CPTPP, by granting high-standard rules and market access to low-income economies and to countries with dominant state-owned enterprises through its CPTPP accession The 2017 APEC summit in Da Nang underscored Vietnam's constructive contribution to CPTPP negotiations, helping member economies expand exports and strengthen their regional presence Vietnam's participation also speeds up the Regional Comprehensive Economic Partnership (RCEP) negotiations and encourages other RCEP members to engage more deeply with the CPTPP framework, reflecting its emerging market status and strategic geographic location To sustain this momentum, Vietnam needs to strengthen domestic regulations and institutions and boost the competitiveness of state-owned enterprises.
Vietnam must push forward with essential economic reforms and modernize its industrial production structure to meet its CPTPP commitments and strengthen its competitiveness in global markets By accelerating structural reforms, upgrading manufacturing capabilities, and optimizing value chains, the country can attract investment, expand exports, and build resilience against global shocks, delivering sustained growth and shared prosperity while fulfilling its obligations under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
1 Tran Anh Son and Tran Toan Thang (2018) Impact of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership on Viet Nam.
1 Petri, P., & Plummer, M (2016) The economic effects of the Trans-Pacific
2 Statistics from Department of Statistic and Foreign Investment Department - Ministry of Planning and Investment.
3 Statistics from Trade map, Investment Map, Intracen.org, OECD, IMF,
4 The Financial (2019) Report on assessment of the current status of FDI enterprises and preferential policies.
6 Vietnam Briefing (2018) Opportunities for Vietnam’s Enterprises.
7 WB (2018) Economic and Distributional Impacts of Comprehensive and
Progressive Agreement for Trans-Pacific Partnership: The case of Vietnam.
8 WB (2018) CPTPP Brings Vietnam Direct Economic Benefits and
9 http://cptpp.moit.gov.vn/ (18/12/2020) CPTPP: Viet Nam’s commitments in some key areas.
10 http://cptpp.moit.gov.vn/?page=overview&category_id9337b7-18f7-463d- 8016-7c56827c143a.
11 https://sites.google.com/ (18/12/2020) “Vietnam and CPTPP”, https://sites.google.com/site/ibwvietnam/vietnam-and-tpp download by : skknchat@gmail.com
APPENDIXES https://drive.google.com/file/d/1Nt6CUq2X- pU1vX4riEANg3IBxSQOsGYs/view?usp=sharing
(Investment relation) download by : skknchat@gmail.com https://drive.google.com/file/d/1YlhdAWHB2LosU77A72RX5NC9sN2b-
(Trade relation) download by : skknchat@gmail.com download by : skknchat@gmail.com