Vietnam’s determination to implement TPP

(Vietnam Logistics Review) According to government’s evaluation, TPP plays an important role in Vietnam, both in economic, politics and society, as a result of 7- year negotiation process. To date, although this agreement has not yet become effective, it starts bringing some real benefits for Vietnam.

Unique advantage

As shown in the report of World Bank (WB), TPP will possibly add 8% GDP, 17% current export values and 12% capital stock for Vietnam over the next 20 years.

Among the current TPP signatories, Vietnam, as the economic with the lowest GDP, may have unique comparative advantages compared to other countries, especially in labor-intensive manufacturing field and industrial fields subjected to high-tax rates, like textiles. WB also suggested that TPP might increase FDI flowing into Vietnam and enhance export capacity, including upstream suppliers in some industrial fields which are strictly supervised under rules of origin (eg. Textiles).

Besides, elimination of non-tariff solutions will contribute significantly to Vietnam’s economic growth. Investment predicted will rise over 20% when TPP is implemented, particularly an increase in investment budget and long term growth rate. Incomes in 5 sector groups are also expected to upturn from 2020 – 2035, with fastest growth for the labor group having low level qualification.

Another impact of TPP would be creating conditions for Vietnam to increase integration capacity into the global market and widen export opportunities. Most of tariff and non-tariff rates applied on industrial products will be eliminated or quickly reduced while tariffs levels or other restrictive rules for agricultural products will be cleared or gradually decreased. Information from the TPP topic of WB asserted that approaching the markets of US and Japan will be very important to Vietnam.

Therefore, the early signing of TPP has an important meaning which confirms politically strong determination of Vietnam, presenting a proactive role of Vietnam in TPP signatories and contributing to institutional completion for the modern market economy as well as the national legislation towards effective implementation of all commitments. In addition, this also gives Vietnam’s enterprises, citizens and all economic sectors enough time to prepare well before TPP application.

An effort of government

Currently, Vietnamese Government has much improved administration procedures along with policy system to make institutional environment clearer and stronger, this is one of the first prioritized task to create better investment environment and bring favorable condition for foreign enterprises and businesspersons who have operated successfully business in Vietnam.

With these efforts, Vietnamese Government hope to set up basic background to implement TPP effectively and help enterprise community in Vietnam to take advantages from opportunities offered by this agreement. The Prime minister confirmed the determination of Vietnam’s Government on official approval of TPP. At this moment, the government has finished all proposed documents, which will be quickly sent to the meeting of National Assembly of Vietnam in October 2016 for consideration of its approval. The National Assembly will accept TPP by a resolution, in which they confirm the participant role of Vietnam in TPP and admit the time for TPP coming into effect to implement all commitments of Vietnam.

To examine and ratify TPP in late 2016, some ministries and sectors have been required to coordinate firmly with Committee for External Affair and other agencies belonging to National Assembly of Vietnam in order to quickly complete all steps in approving TPP.

Particularly, Ministry of Industry and Trade needs to provide and disseminate comprehensive information about TPP to members of the National Assembly; revise and assess the constitutionality and the compatibility of TPP with other legal documents of the National Assembly and the Standing Committee of Assembly for an implementation of TPP. Also, evaluating impacts of TPP on different fields, different sectors, especially focusing on challenges of TPP and its solutions, is needed to take advantages from opportunities and boost up economic benefits of Vietnam when joining TPP.

Along with that, all organizations, individuals or enterprise communities will be widely investigated to record their comments or opinions about any direct impacts of TPP. This can help consultant agencies to build process and plan to implement TPP after it becomes effective in Vietnam.