Opportunities Brought by TPP

 

The 12 countries participating in the TPP negotiations are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam. The countries have completed the 20th round of talks with many group negotiations.

 

The ambition of the TPP is opening comprehensive market, cutting almost 100 percent of the tariff except for a few sensitive commodities handled through bilateral channels, negotiating the removal of restrictions on investment and services on the principle of selection, opening public procurement markets and financial services.

 

The participating countries are working to finalise committed tax packages and are looking for the opening of the market with a number of commodities that have the ability to create more opportunities for businesses and employment in TPP countries. The countries are negotiating the issues related to government procurement, state-owned enterprises, investment and environment.

 

Some issues still under disagreement at this point will be discussed by Ministers in charge of economy of 12 countries to build a plan to work together to promote the negotiation and conclude acceptable results. The parties will focus on the goal of achieving commitment to open high standard markets, ensuring market access in goods between the TPP countries in a comprehensive, substantive way and remove restrictions on many areas.

 

The negotiators hope to continue the efforts so TPP can be concluded in the first half of 2015. The TPP is expected to bring innovation, enhance competitiveness and promote economic growth in the participating countries.

 

Vietnamese Government chief negotiator on TPP Tran Quoc Khanh said that when involved in TPP, Vietnam and other countries have set out the benefits and obligations of each country and agreed that only when all parties gain balance between rights and obligations, can they conclude negotiations.

 

The question of businesses now is how they can take advantage of the TPP to achieve rapid development, and will they also face high competitiveness when the tariff barriers are removed. Once the TPP agreement is signed, those member countries will remove 100 percent of import tariffs, of which 90 percent of tariffs are removed as soon as the agreement takes effect.

 

TPP is expected to promote integration and competitiveness, deepen commitment to the production and supply chain, establish rules to ensure that private enterprise can compete equally with SOEs, support job creation by making it easier for workers and businesses in the large and small scale, towards building ways of enhancing transparency, good governance and strengthening anti-corruption efforts to ensure trade and investment growth in line with the interests of the people.

 

The United States has much influence on the negotiation process as well as when the TPP is officially implemented. The scope of the TPP negotiations is also wider than the bilateral agreement between Vietnam and the US, especially including non-traditional areas.

 

The TPP will boost Vietnam's exports to the countries participating in the agreement, particularly the US, thanks to the commitment to open its market, compared with existing commitments in the area. It is forecast that when TPP is signed, exports from Vietnam to the United States can be raised above 20 percent of total exports, making the country the largest export market of Vietnam.

 

Mr Stuart Schaag, Commercial Counsellor, Embassy of the United States in Hanoi, said that the United States is a potential market for Vietnam. According to Nguyen Hong Duong, Deputy Director of the American Market Department, the Ministry of Industry and Trade, once the TPP is signed, tariffs will be reduced to 0 percent and many items have a better competitive advantage.

 

Since 2009, exports from Vietnam to the United States have doubled, while exports of the United States to Vietnam have grown by 61 percent.

 

The United States is the major investor in Vietnam. TPP can help promote US investment in Vietnam, especially in areas such as the development of high-tech industries, raising the level of the industry, services and agriculture. This makes it possible for Vietnam to better participate in the value chain regionally and globally.

 

The opportunities are great but there are also significant challenges. Vietnamese businesses need to improve their ability to seize opportunities and cope with the risk of trade sanctions. According to Nguyen Hong Duong, property protection for domestic producers in the US market is very high, especially for some commodities such as agricultural products and foodstuffs. The trade and technical barriers of the US are getting more stringent and if they see signs of harming domestic production, they will immediately add new rules and laws to deal with that.