The Trans-Pacific Partnership (TPP) agreement has great significance for Vietnamese enterprises in increasing access to markets and promoting exports, especially products for the US market. However, “Vietnamese enterprises will face many challenges once the agreement is signed” is the information given at the workshop “Vietnam-US Trade Relations and TPP: Major Prospects and Challenges” held by the Trade Promotion Agency (Export Promotion Centre) in collaboration with the US Embassy in Hanoi in Hanoi on November 18th.
According to information at the conference, the TPP agreement will create favourable conditions for enterprises to Vietnam such as: Expanding market access especially to the US market for Vietnam’s exports products such as textiles, seafood, footwear, wood products etc; Increasing access to market for new products such as automotive parts and seafood processing; Boosting investment from the US and other countries into Vietnam; Enhancing the international position of Vietnam and Promoting relationships with key partners. Once the TPP is signed, Vietnam's exports can increase by US$68 billion in 2025, while Vietnam will gain US$28 billion more from attracting foreign investment.
In addition, TPP increases access and reduces market tariffs in other TPP countries - for example: the US tax rates for electronics, appliances, and countless low-end products are low, but the prices in many other TPP countries (or potential TPP countries) are high. This is also an opportunity for Vietnam to access market, especially when removing 100 percent of tariff, many of Vietnam’s items will have a better competitive advantage, enhancing access to new items. For example, canned seafood is currently taxed at 35 percent but when the TPP is concluded, the tax will be removed. Similarly, the rate of fruit commodities, agricultural tax which is now 30-130 percent will be reduced to 0 percent.
Mr Vu Hong Duong, Deputy Director of the American Market Department, the Ministry of Industry and Trade, said the United States is the single export market of Vietnam with major growth pace. With the stable trade relations between Vietnam and the United States as the current, even if the TPP has not been signed yet, Vietnam still has plenty of opportunities to increase the US trade surplus because exports from Vietnam to the United States currently accounts for only 0.98 percent of the total imports of the United States. As of 2001, Vietnam exported only US$1.05 billion worth of goods to the US, but in 2013 this figure had risen to US$23 billion. In the first 10 months of 2014, Vietnam has a trade surplus of US$18.7 billion with the US.
About the competitiveness of Vietnam exports, it can be seen that some commodities have good competitiveness in the market include garments, furniture, bags, wallets and umbrellas, seafood and shoes. Industrial goods with high added value, such as electrical machinery and equipment and parts are considered potential export commodities and have high competitiveness in the market in the near future.
However, export growth opportunities are not easily achieved because the TPP poses significant challenges for Vietnamese enterprises. The delegates recommended that in the upcoming time, Vietnam goods will be subject to many trade barriers when exporting goods to the US market. In particular, this barrier will relate to process. Therefore, businesses need to invest in better technology for production, environment and labour to overcome the barriers.
Stuart Schaag, Commercial Counsellor, Embassy of the United States in Vietnam, stressed that businesses wanting to invest as well as sell products in the US market must first learn about the tariffs of the United States, then identify the needs, as well as competitors to their products. On finding customers, Stuart Schaag also advised Vietnamese businesses to start searching through the association's website. Almost all sectors / products join associations. Members of the Association will be potential customers.
In addition, Stuart Schaag recommended that through trade and industrial fairs, businesses can also find potential customers such as: The industrial trade show in the US; Business information; and Electronic data interchange (EDI).
In addition, businesses need to proactively enhance competitiveness, improve technology, improve employee productivity, actively engage in the production and supply chains in the region and globally, and review and adjust their legal compliance in accordance with the TPP. Enterprises should also proactively implement fully the obligations in the agreement, to avoid violating the provisions of the agreement (investment, labour, environment, SOEs, IP, etc). Especially, businesses have to attach production and trading with social responsibility of business and sustainable development, the protection of workers and environmental protection because it is the tendency to develop sustainably in the future.
Thu Ha
Vietnamese
