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Take advantage of RCEP to increase Vietnamese goods and brands in Indonesia

04:07 - 08/11/2023

The Regional Comprehensive Economic Partnership (RCEP) is an agreement between member states consisting of 10 member countries of the Association of Southeast Asian Nations (ASEAN): Brunay, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam along with Australia, China, Japan, New Zealand and South Korea. India also participated in negotiations for the accord but announced its withdrawal in 2019.

For Indonesia, it was a relatively late ratification of the agreement. On August 30, 2022, Indonesia has just ratified the RCEP Agreement and until January 2, 2023, this Agreement will officially enter into force. With RCEP, Indonesia will have the opportunity to expand and increase regional value chains, Indonesian export companies will derive greater value from export activities, encourage foreign investment in Indonesia, and help remove many barriers to trade in services.

Indonesia also expects that RCEP will increase market access opportunities for agricultural products, fisheries, automobiles, electronics, food and beverages, chemicals and machinery equipment in 3 key markets: China, Japan and Korea.

In bilateral trade relations with Vietnam, leaders of the two sides have affirmed that Indonesia always recognizes Vietnam as one of the important economic and trade partners in Southeast Asia. In recent years, trade relations between the two countries have developed positively. Vietnam and Indonesia also have a lot of potential for cooperation, especially in the field of fisheries and electric car industry, especially when the RCEP Agreement comes into effect, bilateral trade turnover is expected to increase significantly.

Sharing exclusively with Industry and Trade Newspaper about the impacts of RCEP Agreement on goods export results as well as the presence of Vietnamese brands in the Indonesian market since the beginning of the year, Mr. Pham The Cuong - Commercial Counselor, Vietnam Trade Office in Indonesia - said, to be able to fully assess the effectiveness of this Agreement on Vietnam's exports to the Indonesian market, it takes more time.

"Howeversince the RCEP Agreement came into effect, Vietnamese exports have more opportunities to choose the most favorable tariff preferences, enjoy trade facilitation and rules of origin of the Agreement" - Mr. Pham The Cuong informed, adding, Non-ASEAN members in RCEP are all important sources of input materials for Vietnamese exports such as China, South Korea, Japan and these countries are also Vietnam's leading foreign investors, opening many factories to produce and export goods.

In the first 9 months of 2023, Vietnam's goods export turnover to the Indonesian market reached a value of 3.79 billion USD, up 11% over the same period in 2023, in the context of Vietnam's goods exports to most key markets declined.

"This increase in export turnover is a combination of many factors, including preferential tariffs and rules of origin from FTAs including RCEP," said Counsellor Pham The Cuong.

Over the past time, Vietnamese exports have increased their presence in the Indonesian market, especially for agricultural products such as rice, coffee...

According to the Trade Deal, over the past time, Vietnam's export goods have increased their presence in the Indonesian market, which is reflected in the export turnover of goods between Vietnam and Indonesia in the period of 2020 - 2022 increasing by an average of 27.5% per year, with the export value of Vietnam increasing from 2.82 billion USD in 2020 to 4.53 billion USD in 2022.

Counsellor Pham The Cuong affirmed that the increase in exports of goods has contributed to affirming the position of Vietnamese goods in the Indonesian market. "When it comes to rice, Indonesian people remember and know Vietnamese rice brands. In particular, Indonesian people are very fond of Vietnamese coffee" - Counsellor Pham The Cuong cited and said, besides agricultural products, Vietnamese household appliance brands such as Kangaroo, Sunhouse ... has also boosted exports of goods to this market. And currently, large and leading enterprises of Vietnam such as FPT, Vinfast, Mobile World ... has also started business investment in the Indonesian market.

In the coming time, the Vietnam Trade Counsellor in Indonesia said that with a population of over 272 million people, the 4th largest in the world and the largest economy in Southeast Asia - Indonesia will continue to be a potential market for Vietnamese goods if the Vietnamese business community makes good use of it, fully exploit the benefits brought by ASEAN FTAs and RCEP as well as other potentials of the Indonesian market.