Businesses ready to seize TPP opportunities

09:23 | 14/05/2016 Cooperation

(VEN) - The Trans Pacific Partnership (TPP) Agreement is expected to take effect in 2018. Along with tariff reductions to the zero percent, the TPP will create a vast market for 12 member countries with a total population of 800 million, which contribute 40 percent of global GDP and 30 percent of global trade. As for Vietnamese businesses, they have a better understanding of the TPP and many of them have drawn-up plans and been ready to meet opportunities from the TPP. Vietnam Economic News’ Thu Hang gathered opinions from several businesses.

Businesses ready to seize TPP opportunities

Truong Dinh Hoe, General Secretary of the Vietnam Association of Seafood Exporters and Producers

Truong Dinh Hoe, General Secretary of the Vietnam Association of Seafood Exporters and Producers:

Seafood exports to TPP member countries reached almost US$3 billion in 2015 accounting for 46 percent of Vietnamese total seafood export earnings.

After the TPP takes effect, Vietnamese seafood will have more advantages than Argentina, Ecuador and India which have not signed free trade agreement with Japan.

Vietnamese shrimp will also become more competitive than six major rivals including Argentina, Ecuador, India, Thailand, the Philippines and Indonesia which have not involved in the ASEAN-US Free Trade Agreement.

In addition, as a result of tariff reductions to the zero percent, the TPP will make it more able for businesses to increase their investment in seafood production, processing and exports.

However, the seafood sector will face major challenges in terms of food safety, origin of products, unreported and unregulated (IUU) fishing, anti-dumping tariffs and rules of origin. For this reason, one among major factors to make the most of tariff preferences after the TPP takes effect is the need to have stable and good-quality material resources.

Kajiwara Junichi, General Director of the Acecook Vietnam Joint Stock Company:

Acecook instant noodles are currently available in 46 countries, of which 18 percent are in TPP countries. Our next plan is to strongly develop sales to countries, particularly the US, Australia and Canada. We hope that after the TPP takes effect, we will have many more opportunities to export our products.

I think the Ministry of Industry and Trade needs to work with Vietnamese counselors in TPP countries and thoroughly understand technical barriers for Vietnamese exports posed by each and every country, in order to share their knowledge with business associations and businesses to help them be prepared for new mechanisms. The ministry also needs to organize fairs to show Vietnamese companies and goods abroad such as in Chile, Peru and Mexico in order for Vietnamese businesses to learn and promote their exports to these markets.

As for the food industry, one of important requirements for joining agreements including the TPP is to meet regulations on food safety and hygiene. Once TPP countries have a common voice on regulations on food safety and hygiene and apply the same standard on each kind of food, businesses will save time having to learn about food import law in each country.

Le Phuoc Vu, Chairman of the Hoa Sen Group:

The TPP will bring about both opportunities and challenges to the Hoa Sen Group. It is one of major engines to boost our exports and open up advantages for us to persify export markets, particularly the markets in South America such as Chile and Mexico which offer multiple preferences in terms of tariff and customs procedures.

Currently, Hoa Sen’s products are present in the US, and we have recently sold 20,000 tonnes of iron sheet to this market. With the possibility to expand our market to South America, Hoa Sen will likely consider more creative and more flexible solutions to ship our products in order to save transportation costs and increase our competitive advantages.

The TPP will also pose many new challenges for us, including increasing competition in the domestic market. Hoa Sen will face massive imports of steel products from TPP member countries which will have big advantages in terms of price and quality.

Tran Khanh Hoang, Deputy General Director of the Saigon New Port Corporation:

To make the most of the opportunities posed by the TPP, the Saigon New Port Corporation, which is the largest container port service provider in Vietnam, has made necessary investments in recent years to meet TPP opportunities and contribute to international integration of the Vietnamese business community.

 

The corporation scheduled to begin work on construction of the Hai Phong International Container Port - the first deep-water container port project in the north in May 2016. The project is expected for operation in three years connecting two existing ports and the ICD Tan Cang - Hai Phong to create a large infrastructure system to facilitate exports and imports. Prior to that, the corporation completed the first phase of construction of the Tan Cang - Petro Cam Ranh Deep-water Port and put it into operation on March 8, 2016.

Doan Van Luc, Director of Lien Anh Rubber:

Lien Anh currently has clients across the continents including TPP countries. The company has exported products to the US, Malaysia, Australia, Mexico, New Zealand and Canada, of which the US and Malaysia are our major markets where our export revenues keep increasing, although Malaysia is one of the largest rubber exporters in the world.

Last year Lien Anh sold 11,414 tonnes of rubber to the US and 3,553 tonnes to Malaysia.Vietnam’s TPP membership will make it more possible for Lien Anh to export our products to TPP countries. The potential to sell rubber to TPP countries is equal for both Vietnam and Malaysia. However, Vietnamese rubber exports will be more competitive than Malaysia in terms of price but less competitive in terms of quality. 

 

Thu Hang






 



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