The impact of the CPTPP on Vietnam's economy depends largely on Vietnam's ability to seize opportunities and overcome challenges.Its predecessor is former President Obama's trade "legacy" : the trans-pacific partnership (TPP).But US President trump, who favours a unilateralist trade model, pulled out of the TPP at the start of his presidency.The CPTPP has phased out 98% of tariffs on agricultural and industrial products, eased investment regulations and strengthened protection of intellectual property rights.Joining CPTPP brings unprecedented market to Vietnam, and "made in Vietnam" may become the biggest winner.
In the textile sector, Made in Vietnam is quietly gaining market share in Made in China.In 2009, Nike's Vietnam contract factories completed the full capacity of China;In 2012, adidas closed its last factory in China, in suzhou.In April 2018, uniqlo announced a shift of Chinese production capacity to southeast Asia, with Vietnam taking 40 percent of the total.
Foreign brands are not the only ones. Under the attraction of cheap labor, many private enterprises of shoes, hats and clothing, which had their roots in guangdong and fujian provinces in China, started a upsurge of moving their factories to Vietnam.Chinese textile and garment enterprises have also accelerated the pace of transfer to Vietnam.Chinese down jacket manufacturer and seller bosideng will also expand production in southeast Asia.With the help of its capital partnership with itochu, bosideng has started pilot production at itochu's textile factory in Vietnam, with plans to expand production further depending on production trends.
The reason for the transfer is not complicated, because the labor cost to Vietnam can be nearly 50 percent cheaper.Production workers in Vietnam earn an average of $216 a month.And, according to the world bank, Vietnam has one of the largest workforces in southeast Asia, with 57.5 million workers, compared with 15.4 million in Malaysia and 44.6 million in the Philippines.
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