Opportunities to Reach Largest Trans-Pacific Partners

This information is given at the conference "Agreement on Trans-Pacific Partnership and the participation of Vietnam" held recently by the Ministry of Industry and Trade in cooperation with the Vietnam Chamber of Commerce and Industry (VCCI).

 

Minister of Industry and Trade Vu Huy Hoang said: "Agreement on the Trans-Pacific Partnership (TPP) is a high-standard free trade agreement (FTA), regarded as the model treaty of the 21st century."

 

The TPP currently has 12 members including Brunei, Canada, Chile, USA, Malaysia, Mexico, Japan, New Zealand, Australia, Peru, Singapore and Vietnam. Mr Tran Quoc Khanh, Deputy Minister of Industry and Trade, Chief Negotiator for the TPP said the TPP has conducted 19 formal sessions and multiple mid-sessions, including two Ministerial sessions. The ministerial negotiations will take place in Singapore in early December this year.

 

According to the statement of the TPP's leaders at a meeting on the sidelines of the APEC summit, held in Indonesia from October 3 to October 8, 2013, the TPP countries are trying their best efforts to promote the basic negotiations to end up the negotiations at the end of 2013.

 

Deputy Minister Tran Quoc Khanh said: Through the negotiations, the participating countries have reached a preliminary agreement on several important issues such as tariff cuts, textiles, liberalisation of services and investment, government procurement, and intellectual property. Besides, nearly 20 other areas in the progress of negotiations include the issues related to the open markets for goods, rules of origins, TBT, SPS, provisions of the cross-border services, financial services, e-commerce, investment, intellectual property, government procurement, labour, environment, and state-owned enterprises, etc.

 

"Participation in TPP would help Vietnam improve export markets structure, open more markets for Vietnamese goods, participate in regional and international production chains, facilitate the economic restructuring and innovate the growth, improve the institutional environment and increase the attractiveness of the foreign and domestic investment, create new production capacity as well as jobs for workers," said Mr Tran Quoc Khanh.

 

The TPP aims to eliminate 100 percent import duty, of which 90 percent will be removed immediately once the agreement takes effect. The opportunities to increase exports and competitive advantages of the Vietnamese goods in major markets such as the U.S. or Japan will be bigger.

 

Mr Le Tien Truong, Vice President of the Vietnam Textile and Apparel Association (VITAS) cum Deputy General Director of Vietnam Textile and Garment Group also pointed out the advantages that this industry will gain after joining TPP. Among the 16,000 tariff lines in the HS 8 digits, the textile imported to the U.S market is regulated under the chapters of 50 to 63 and Vietnam has exported to the United States with approximately 1,000 tariff lines at the average MFN tax of 17-18 percent. The TPP is expected to cut tariffs gradually to 0 percent.

 

According to the calculation, textile exports from Vietnam to the United States could grow by 13 percent to 20 percent per year in the period 2013 to 2017 and may reach from US$25 billion to US$30 billion in 2025.

 

However, Mr Le Tien Truong also analysed: "the TPP will provide both good opportunities and challenges. The challenges may relate to the rules of "yarn forward" origin, tax cuts and the lower competitiveness of the textile industry of Vietnam.

 

The experts also pointed out a number of industries in Vietnam, which will certainly have difficulties joining the TPP. Among those areas, we could list some such as agricultural products, livestock related to chicken, pork, and beef industry, which are known as the advantages of Australia, U.S. Besides, Vietnam's automobile industry will face difficulties when Vietnam fully opens its market to U.S., Japan and some developed markets.