VietNamNet Bridge – The Trans-Pacific Partnership (TPP) will push Viet Nam to complete its market orientation targets, and improve its business environment and competitive ability, delegates heard at a recent workshop held in HCM City.

Catfish is processed for export at Hung Ca Company in Cao Lanh City of southern Dong Thap Province. TPP is said to bring great opportunities for Viet Nam's economy by promoting trade between Viet Nam and the EU, the US and other TPP member nations; diversifying export markets; improving the investment environment. — Photo: VNA/VNS

"Viet Nam is seen as the country that will benefit the most to get the biggest benefits from TPP, compared with other participating nations, and this will be a great chance for the country to boost its exports, and join the global supply chain," said Dr Nguyen Tien Dung, principal of the Law–Economics University, during his speech at the workshop.

"However, Viet Nam has the lowest level of development in 12 TPP nations and the country will face great challenges," he added.

Ngo Chung Khanh, deputy head of the Ministry of Industry and Trade's Multilateral Trade Policy Department, said: "TPP is the new model of regional economic co-operation with the aim of solving problems emerging in 21st century like labour, State-owned enterprises and environmental protection," he said.

"TPP is expected to create favourable conditions for promoting trade and investment by cutting nearly 100 per cent of tax," he added.

Khanh said that TPP's benefits would be even greater than Viet Nam's membership in the World Trade Organisation (WTO).

Viet Nam should be focused on garments and textiles, labour and intellectual property protection, he said.

"Garments and textiles are the core benefit for Viet Nam. At present with tax level of 17 – 25 per cent, Vietnamese textiles and garments will strengthen its foothold in the US market with 20 per cent market share and rank second," Khanh said.

If taxes stand at zero level, the turnover and volume of Vietnamese textile and garment industry would rocket.

"But to take full advantage of TPP, Viet Nam must improve the situation of US$15 billion of the total of $19 billion in export revenue that has to be spent on imported materials," he said.

As for the labour field, the TPP will apply economic sanctions if Viet Nam violates the International Labour Organisation's regulations, which has been applied in the country within World Trade Organisation (WTO), but only for reference.

"Within the TPP, labourers will have the right to set up their own organisations that protect their rights, and the organisation would not be able to join the Viet Nam Labour Federation," he said.

Protection of intellectual property will be tightened under the TPP as well.

"TPP will bring great opportunities for Viet Nam's economy by promoting trade between Viet Nam and the EU, the US and other TPP member nations; diversifying export markets; improving investment environment and attracting high-quality investment; and opportunities to join the global supply chain," he said.

"However, TPP will bring pressure in agricultural competitiveness, such as milk products," he added.

TPP will promote the market economy but high standards in administrative management will create challenges for State management.

A series of laws will be released to implement TPP commitments.

"TPP will increase the speed of economic growth, create more jobs, improve income and eradicate hunger but increase competitiveness. It would cause local enterprises to collapse and go bankrupt," Khanh added.

As for the State budget, he also pointed out that the State budget would be affected but not as much as feared as the portion of the State budget from imported tax has been falling year on year.

VNS