The Trans-Pacific Partnership (TPP) agreement will benefit Vietnam in not only economic but also institutional and social terms, said Minister of Industry and Trade Vu Huy Hoang.
Minister of Industry and Trade Vu Huy Hoang in Atlanta, the US (Source: VNA)
In an interview granted to the Vietnam News Agency on October 5 following the conclusion of the TPP talks in Atlanta, the US, on the same day, Minister Hoang said the pact is expected to help raise the country’s gross domestic product (GDP) by an additional USD 23.5 billion in 2020 and USD 33.5 billion in 2025.
Under the deal, major markets such as the US, Japan and Canada will eliminate import taxes, creating an impetus for Vietnam’s exports, adding USD 68 billion to the country’s total export earnings in 2025, the official noted.
According to him, the country’s key export sectors such as garment-textiles, footwear and fisheries are bound to see outstanding breakthroughs in these markets.
Vietnam will also have new opportunities afforded by the supply chain formed after the trade deal is put in place, Hoang said, explaining that the TPP countries represent 40 percent of the world’s economy and 30 percent of global trade, and involve major powers such as the US and Japan.
The minister added that TPP commitments in the fields of services and investment are expected to accelerate investment environment improvement and foreign investment attraction in Vietnam.
Joining the trade deal will help Vietnam complete its institutions, including market economic institutions – one of the three strategic breakthroughs set by the Party, while assisting with the renovation of the growth model and restructuring of the economy.
At the same time, Vietnam will have chances to improve the country’s business climate in a more open, transparent and foreseeable manner, boosting both domestic and foreign investment, he said.
The intensification of intellectual property right protection under the pact will help the country lure more investments in intellectually-intensive areas like pharmaceuticals.
With high standards on transparent governance and State apparatus performance, the agreement will motivate Vietnam to keep perfecting the socialist rule of law; speed up administrative reform; and combat corruption, extravagance and bureaucracy.
Socially, accelerated growth thanks to the deal will expand job opportunities, increase income and lower poverty rates.
Economic development will also provide more resources to improve manpower quality and public health care.
Environmental commitments included in the TPP agreement will drive commercial liberalisation and investment attraction in an environmentally friendly fashion, helping Vietnam pursue sustainable growth, Hoang said.
However, he noted the pact will pose a range of challenges to the nation, especially economic competition pressure in livestock.
The minister expounded that husbandry and other farming sectors will face the most difficulties after the deal takes effect as they have limited competitive edge.
The pressure, however, is forecast to only moderately affect other economic sectors since the export structure of TPP economies is more reciprocal than competitive, Hoang said.
Additionally, the agreement may push State-subsidised enterprises and those with out-of-date technologies into difficulty and even bankruptcy, fuelling mass unemployment, the minister warned.
Given this, he suggested Vietnam exert maximum efforts to turn such challenges into opportunities to reform the growth model and restructure the economy with special heed paid to agricultural restructuring, production re-organisation and the application of scientific and technological advancements.
The official stressed the need for the country to adjust and amend regulations on trade, investments, bidding, intellectual property, labour and the environment.
Vietnam must take measures to cope with the possible negative impacts on workforce structure by shifting towards areas of its advantages, he said.
Regarding the noted gap between Vietnam and other TPP member countries, the minister said Vietnam will receive technical support to apply the high standards stipulated in the agreement.
The country needs more time to improve its capacity, amend laws and procedures, and train officials, he said.
He noted that participating in the deal is in line with regulations and orientations on international economic integration set by the Party and the State.
After the finalisation of the TPP negotiations, participating nations will review legal procedures in preparation for the official signing and submit to concerned agencies for approval, Hoang said, adding that the processes often take at least 18 months.
The full text of the deal will be publicised in Vietnam and presented to the Party Central Committee before the ratification process begins, he said.
The TPP brings together 12 countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam.