VietNamNet Bridge - Joining the 12-member Trans-Pacific Partnership (TPP), Vietnam may see its GDP increase by $35.7 billion by 2025 if the domestic industry meets the technical barrier of partners.

Professor Peter A. Petri of Brandeis University (USA) said Vietnam would benefit most when negotiations for the TPP are finished.

Research by Petri and co-workers showed that Vietnam's GDP has an opportunity to increase by $35.7 billion (equivalent to 10.5%) from now to 2025 if Vietnam joins the TPP.

"Vietnam’s added benefits will almost double with the arrival of the US and Japan because these are the main export markets. Vietnam is in the best position to take advantage of the TPP," Professor Peter A Petri said.

Mr. Pham Binh An, Director of the Integration Support Centre in HCM City, said that the current average tariff for textile items of Vietnam to the US market is 17.3% and it will fall to 0% if Vietnam joins the TPP.

According to the Vietnam Textile and Apparel Association (Vitas), by April 2015, Vietnam accounted for 10.16% of the total market share of imported textiles of the US.

The US is also the major export market of Vietnam, with 55% market share.

With the growth capability in the US, Vietnam’s total garment-textile exports could reach $55 billion in 2025, creating nearly 6 million jobs.

However, these are only theoretical calculations, because Vietnam will still face some barriers when it joins the TPP.

"The supporting industry for the garment-textile sector is very weak so we have to import materials, mainly from the countries that are not TPP members, such as China, South Korea, Taiwan ...," An said.

Footwear and handbags are also having the opportunities for strong growth in the US market, which currently accounts for over 47% of total exports of Vietnam.

Mr. Diep Thanh Kiet, deputy chair of Vietnam Leather and Footwear Association, said TTP is a two-way process that can help increase export but also requires Vietnam to open up the domestic market.

According to experts of the Institute of Strategy and Policy of the Ministry of Finance, the biggest difficulty for Vietnam’s leather and footwear is the low localization rate.

Vietnam currently satisfies 20 - 40% of raw materials and it has to import up to 70% of leather. Of the 10 largest footwear enterprises in Vietnam, only one is domestic. The rest are joint venture or 100% foreign-owned firms.

Meanwhile, the ability to master the domestic footwear market is also limited. The premium segment is almost open, therefore the tax rate of 0% is not really a "gold mine" for Vietnamese enterprises, in the context that they satisfy less than 50% of domestic demand for footwear.

However, leaders of the HCM City Integration Support Center said local enterprises should not be pessimistic, because in negotiations there are always conditions allowing temporary or permanent shortage of the source of supply. This is considered a sensitive and controversial issue, which needs more time to discuss.

In fact, even though that Vietnam is a low-income country, it is very important to the US. "Vietnam is representative of the low income countries and the US wants to reach an agreement with Vietnam, which will set the precedent to apply to many other countries around the world,” said Professor Peter A.Petri.

Nguyen My