Businesses should not miss TPP opportunities

09:24 | 17/12/2013 Trade

(VEN) - The Trans-Pacific Partnership (TPP) Agreement is expected to bring major benefits to Vietnam. However, how to make the most of opportunities from the agreement remains to be a question for many Vietnamese businesses.

A workshop on businesses after they join the Trans-Pacific Partnership (TPP)

Lessons from the WTO

Vietnam Economic Institute Director Dr Tran Dinh Thien said that after the World Trade Organization (WTO), the TPP Agreement is considered to be Vietnam’s most important step towards international integration. The TPP is also expected to provide tremendous opportunities for the country, regarding the vast market with a population of 800 million (contributing 40 percent of the global Gross Domestic Product, GDP) and the participation of Vietnam’s most important trade partners like the US, Japan, Australia and Singapore.

However, Vietnamese businesses will face a different situation compared to when Vietnam became a member of the WTO. Since 2007 when Vietnam became a member of the WTO, the economy has developed strongly and businesses have received opportunities from the WTO. With the TPP, Vietnamese businesses could face difficulties and risks as a result of the global economic crisis and TPP commitments are much higher than the WTO, requiring businesses to be able to resolve trade liberalization problems.

“The Vietnamese economy and businesses are recovering slowly. How can the country make the most of opportunities from the TPP? The question should be considered seriously,” said Tran Dinh Thien.

Opportunities should not be missed

So far TPP Agreement major negotiations have been completed, and partner countries have entered a decisive stage of negotiations on specific areas, including opening up commodity markets, principles on origin of products, governmental procurement, state-owned businesses and e-commerce. In consideration of this, Vietnamese businesses need to keep abreast of TPP negotiations.

Tran Dinh Thien said that of all the TPP countries, Vietnam would benefit the most. Increased trade with the US, the largest market in the TPP, would become the most important factor for economic development in Vietnam.

Increased foreign investment would also become one of key factors for the Vietnamese economy.

In addition, import tariffs of TPP countries would be slashed considerably, and Vietnam would increase its exports, particularly clothing, footwear and seafood. Vietnamese businesses would not have to compete with Chinese goods in the TPP market.

However, joining the TPP would not automatically mean that Vietnamese businesses would gain immediate opportunities. The TPP would only provide one more opportunity and also challenge for Vietnamese businesses to overcome and grow. Tran Dinh Thien said that although TPP negotiations had not yet been completed and the commitments not been made public, great pressure for businesses had already been visible.

The TPP would terminate most tariffs, open the market, tighten standards on intellectual property protection, labor, technical issues and government transparency, and break barriers to ease goods, service and capital circulation within the region.

In order not to miss opportunities like with the WTO, Vietnam needs to improve its economic institution, laws and sanctions to realize its TPP commitments, firstly including restoring and building trust among investors. Business sectors and businesses have to make careful preparations and stay abreast of specific commitments related to their sector and products. They must also change from price competition to non-price competition and learn to link up with each other. As for now, they are in a dire need of information and dialogue with ministries, sectors and the government about the TPP, said Tran Dinh Thien./.

By Hung Cuong