14:03 | 24/04/2015 Trade
A recent survey from the Vietnam Chamber of Commerce and Industry (VCCI) found that 66% of domestic enterprises have expressed support for the Trans Pacific Partnership Agreement (TPP) to go forward.
However for transnational enterprises operating in Vietnam the survey found much less support and that only 30% of them were in favour of the 12 member Pacific Rim trade pact.
“There is still a surprising group of small and medium sized businesses that are not well informed about Vietnam’s negotiations to join theTPP,” said Professor Edmund Malesky from Duke University.
Professor Malesky added that the survey results surprisingly showed that 31.5% of domestic enterprises and 29.8% of transnational enterprises said they were completely unaware of the trade negotiations.
Even more interesting is the fact that transnational enterprises from non TPP member nations were better informed and knew more about the status of negotiations than those from TPP member countries, he added.
These negotiations have been conducted in secret and no official draft of the document has been released so it’s understandable that no one in the general public knows the specifics of the agreement.
What we are talking about here is simply the general awareness of the Vietnam business community to stay abreast of current events and have a broad understanding that negotiations for, maybe the largest trade agreement in history, are coming to a close.
Overall 50% of all domestic and transnational enterprises operating in Vietnam said they were reasonably informed about the TPP. Meanwhile only 20% of businesses said they possessed an in-depth understanding of the issues surrounding the negotiations.
Malesky said most transnational enterprises were not concerned with Vietnam’s joining the TPP as they thought that they wouldn’t be affected.
Exporters should benefit from expanded export markets, Malesky suggested, adding that on the reverse side the TPP should also stimulate imports into Vietnam.
However, it should be pointed out that because the specific terms of the agreement have yet to be made public, all of the representations by Malesky are simply his opinion at this point.
TPP negotiators have announced that negotiations are entering their final stages and should be concluded in the next couple of months. If they are successful the TPP will affect trade among the 12 member countries, making up nearly 40% of the global economy.
According to the VCCI, the TPP negotiators are making progress and only a few differences remain to be resolved.
Many experts view the TPP an important opportunity for Vietnam to persify its economy, expand export markets, and reduce its economic dependence on any one country and increase its import surplus in some markets.
Currently, Vietnam is the lowest developed country among the TPP members. However, the country should get much more benefit from the huge expanded market brought about by the agreement.
Some economists have speculated that after TPP comes into effect Vietnam would get a stimulus of US$46 billion and a growth of 13%.
To turn TPP advantages into reality however, enterprises must be pioneers in grasping opportunities, said VCCI President Vu Tien Loc, adding that the survey results showed that most support Vietnam’s entry into the TPP.
Despite the positive evaluation of the TPP, a number of concerns still remain, said Malesky. As one example he said the question of whether the garment industry will benefit from tariff reductions is not cut and dry.
The answer depends on the origin of the raw materials. Tariff reduction only applies if they were imported from a TPP member country.Source VOV News