(VOVWORLD) - Vietnam’s economy will likely benefit the most from the Regional Comprehensive Economic Partnership (RCEP) agreement, according to the World Bank’s recent report which offers a thorough analysis of how the RCEP can impact the economic atmosphere of its country members, including Vietnam.
 Imported goods are loaded at Hai Phong seaport. (Photo: VNA) |
The World Bank’s report “Estimating the Economic and Distribution Impacts of the Regional Comprehensive Economic Partnership” constructed four alternative scenarios.
At the baseline or the starting point between 2020 and 2035, the average tariffs imposed by Vietnam are expected to decline from 0.8% to 0.2%, while the tariffs faced by Vietnam are reduced from 0.6% to 0.1%. In this scenario, Vietnam’s income growth is likely to be near zero and exports-imports may even fall.
The fourth scenario is the most optimistic. When all benefits are applied, Vietnam could have the highest gains of all RCEP member countries. Vietnam’s income levels could increase by 4.9% relative to the baseline, higher than other countries, where the income levels increase by 2.5%.
While exports and imports increase for all RCEP member countries, Vietnam is expected to experience the highest surge in exports at 11.4%, mainly in electronic devices, machinery, and garments and textiles.
The RCEP poses some inevitable challenges for Vietnam as the country has to raise its standards to keep up with higher demand and intense competition in production and services.