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Trans-Pacific Partnership In The Eyes Of Vietnam's Domestic Businesses
The TPP free trade pact is considered a model deal in the 21st century with the participation of Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam.
The TPP has concluded 19 rounds of official negotiations and begun vital negotiations on opening the goods markets, rules of origin, government purchasing, state-owned enterprises, and e-commerce.
According to national radio broadcaster Voice of Vietnam (VOV), Vietnam has completed negotiations with Japan and is pursuing negotiations with South Korea.
Joining the TPP will help Vietnam balance its trade relations with key markets and avoid over-dependence on a particular market.
President of Vietnam Chamber of Commerce and Industry, Vu Tien Loc, said that to effectively take advantage of the TPP, it is necessary to review the economy's strength, identify investment targets, and attract foreign investment.
"The TPP will impact Vietnam's economy and its markets. It will influence institutional reorganisations and business environment reforms. The combined impacts will create new momentum for economic growth.
"We can seize opportunities if we have effective internal reform at the macro level and enterprises make an effort to improve their competitiveness," Loc was quoted by VOV as saying.
Tran Quoc Khanh, Deputy Minister of Industry and Trade and head of the government's negotiation delegation on international economics and trade, said a visible opportunity for Vietnam from the TPP is to access the US market, the world's biggest consumer market at zero tariff.
Besides export benefits, Vietnamese foreign invested service companies will enjoy a more transparent and predictable business environment when Vietnam implements its TPP commitments, Khanh said.
"Our biggest opportunity is to restructure our import and export markets. We can open new foreign markets if the tax rate is zero per cent.
"It will be a strong driving force for Vietnamese exports in some markets and we can get involved in regional and international production chains. TPP accession will create favourable conditions for economic and growth model reform," he said.
VNA reported that besides positive factors, the TPP will also create pressures on market openings and the competitiveness of Vietnamese enterprises.
For example, the garment and textile sector will have opportunities from other TPP member countries including the US, Japan, and Australia.
Deputy general director of Vietnam Garment and Textile Group, Le Tien Truong, said the biggest obstacles are to meet the rules of origin and deal with imbalanced development of the garment support industry.
"This is an opportunity to expand markets with better conditions. There are challenges including how to meet the requirements of the agreement, markets, quality, quantity and other non-tariff issues," he said.
Meanwhile, Industry and Trade Deputy Minister Khanh said that although pressure from competition is unavoidable, Vietnam will attempt to control it under a certain roadmap.
"Vietnamese enterprises can overcome these difficulties because they have prepared in recent years," he said.
Later this year, negotiations are scheduled to end and the TPP will come into effect.
TPP member countries will comprise one of the world's biggest trade areas, making up 40 per cent of global gross domestic product (GDP) and one-third of trade revenue.
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