Taking the Shortest Way to the Highest Benefit

According to the Ministry of Industry and Trade, the TPP will create a new model of regional economic integration and cooperation, further facilitate flows of trade and investment and, if possible, turn TPP into a nucleus to form a free trade area for Asia - Pacific region.

 

As the TPP free trade area creates huge values (its GDP exceeds US$28,000 billion, accounting for 40 percent of global GDP and over 30 percent of global trade), supply chains will be motivated to translate into this area and create great advantages and economic benefits for all countries involved.

 

Countries which do not have FTA relations with the United States like Japan, New Zealand, Malaysia and Vietnam all want to establish FTAs ​​with the United States and access to this huge market through the TPP.

 

Joining the TPP as one of the first members will help improve the position of Vietnam in the regional and international arenas, and help Vietnam implement its foreign policy of independence, self-reliance, multilateralisation and diversification in international relations.

 

Deputy Minister Tran Quoc Khanh said, according to studies, Vietnam may be the biggest beneficiary among 12 signatories to the TPP. In economic terms, as calculated by independent economic experts, the TPP may help Vietnam increase its GDP value by US$23.5 billion in 2020 and US$33.5 billion in 2025. Exports may increase by US$68 billion by 2025.

 

Vietnam’s exports will be given a strong boost when major markets like the US, Japan and Canada will slash their import tariffs to zero on goods from Vietnam. The garment and textile export turnover may jump high. According to calculations, if the garment and textile industry earn US$1 billion from garment and textile exports, it will need 250,000 jobs. Thus, this industry will generate more jobs for local people when its export value rises. Besides, with its big scale, Vietnam will attract dyeing, textile and material manufacturers. This is the positive side of “from yarn” rules of origin, enabling Vietnam to add local values in exports and to strengthen sustainable development before potential competitors.

 

Former Trade Minister Truong Dinh Tuyen, former WTO chief negotiator of Vietnam, said, "Joining the TPP, I feel worried for businesses. I even feel more worried for the State. Now, there are so many rising export figures and growing GDP value but they do not reflect world market developments as well as attitudes and responses of the Government.”

 

He thought that Vietnam may run a trade deficit shortly after it joins the TPP but this is not necessarily bad.

 

Entering the TPP will help Vietnam and other countries with a lot of new opportunities from new supply chains, formed after the effective date of TPP. TPP countries now constitute 40 percent of global GDP and 30 percent of global trade. With the inclusion of the US and Japan, many opportunities of setting up supply chains will certainly open up. Some big foreign corporations have considered investing in Vietnam and turning Vietnam into their important production bases in their production chains.

 

TPP commitments to services and investment are expected to generate positive effects in improving the investment environment and attract foreign investment. Many studies have confirmed that foreign investment will increase after the TPP takes effect. In addition, our services providers can easily access TPP markets although our impacts will not heavy because of limited competitiveness of our companies in foreign markets.

 

Our businesses will have the chance to enter public procurement markets in the US, Japan, Canada and others. According to statistics, public procurement of office things used by US governmental bodies values US$10-12 billion a year. This is also an attractive consumption market for Vietnam’s exports.

 

Like entering the World Trade Organisation (WTO), joining the TPP, a new-generation free trade agreement, will be an opportunity for Vietnam to continue perfecting its institutions, including market economy institutions, one of three strategic breakthroughs that our Party has defined, supporting the process of changing growth model and economic restructuring, and improving the business environment. In particular, the improvement and strengthening of intellectual property rights (IPR) protection will open up opportunities for attracting investment into sectors using high knowledge content such as pharmaceutical manufacturing, including bio-medicine and vaccines.