Increasing competitive pressure from other RCEP countries

Alongside the expected opportunities, RCEP also poses certain challenges for Vietnam, especially in terms of competitive pressure in the Indonesian market. This is because RCEP creates opportunities for all member countries - not only Vietnam - to access the Indonesian market under preferential tariffs and rules of origin. This means that Vietnamese exports in the Indonesian market will face tougher competition from many regional rivals, particularly countries with export structures similar to and directly competing with Vietnam, such as China and some ASEAN members.

Other recurring challenges

In addition to the challenges specifically associated with RCEP, Vietnam's exports to Indonesia also face many other ongoing challenges, especially non-tariff measures (NTMs).

Non-tariff measures are measures other than tariffs that countries apply to goods crossing their borders. In theory, these measures are used for legitimate regulatory objectives of each country, such as protecting human health and life, ensuring food safety, and protecting the environment. However, in many cases, NTMs may be misused as a means of restricting imports.

Indonesia's NTMs applied to imported goods in general - not only those from Vietnam - are not directly related to RCEP. However, tariff reductions and more flexible rules of origin may act as a catalyst for an increase in NTMs, causing Vietnamese exports to face more stringent requirements and higher standards in the Indonesian market.

Source: Center for WTO and International Trade - VCCI

• Indonesia's tariff commitments for imported goods under RCEP
• Indonesia's additional rules of origin under RCEP
• Indonesia's goods origin certification mechanism under RCEP
• Indonesia's commitments on services market liberalization under RCEP
• Opportunities from RCEP for Vietnam's exports to the Indonesian market