09:16 | 27/02/2016 Cooperation
(VEN) - The Trans-Pacific Partnership (TPP) was officially signed by 12 member countries on February 4 in Auckland, New Zealand. As a founding member, Vietnam has joined other TPP member countries in writing rules for global trade.
The TPP is expected to contribute to increasing the global popularity of Vietnamese goods
The signing of the TPP marked the completion of negotiations among all member countries for the ratification process to begin in each country. Each member country would have about two years to persuade their parliaments to ratify the trade deal. At a press conference held after the signing ceremony, Minister of Industry and Trade Vu Huy Hoang said the Vietnamese government would submit the deal to the President and the National Assembly for ratification. He said Vietnam needed less than two years to complete the ratification process. The TPP will take effect after it is ratified by at least six member countries accounting for 85 percent of total gross domestic product (GDP) of the 12 member countries. This means the deal would need to be ratified by the legislatures of the two largest member economies, the US Congress and the Japanese Diet, before it takes effect.
All other TPP member countries believed Vietnam was a reliable partner, making significant contributions throughout the negotiation process, Minister Hoang said. “Vietnam will do exactly what it has pledged and has been highly appreciated for the serious implementation of commitments,” he added.
TPP founding members will be able to write the rules for new members. Luong Hoang Thai, Director of the Multilateral Trade Policy Department under the Ministry of Industry and Trade, Deputy Head of the Vietnamese delegation to TPP negotiations, said that in the past Vietnam was behind other countries on the path to joining the global economy. It joined ASEAN and the World Trade Organization (WTO) later than other member countries and therefore had to accept all rules set by founding members. “Vietnam joined new-generation trade agreements such as the TPP as a founding member and took part in writing the rules. Therefore, we could try and defend our national interests right from the beginning of the negotiation process,” Thai said.
At their 14th conference, the 11th tenure Central Committee of the Communist Party of Vietnam claimed that Vietnam’s decision to join the TPP as one of its first members allowed Vietnam to show its important role as well as geopolitical position, creating new opportunities for the country to develop rapidly and in a sustainable manner. In the context of complicated and hard-to-predict changes in the global and regional situation, the TPP will create opportunities for Vietnam to make the most of external resources to accelerate its development. It will also help Vietnam increase GDP and exports, attract more foreign investment, join global and regional production and consumption chains, create more jobs to raise people’s incomes, ensure social security, and reduce poverty.
Promoting Vietnamese goods
The TPP is expected to take effect in 2018 and contribute to increasing the popularity of Vietnamese goods throughout the trade area that accounts for 40 percent of global GDP. Most of the other 11 TPP member countries are large economies which already trade with Vietnam. However, many kinds of Vietnamese exports are subject to high tax rates when accessing large markets such as the US, Japan, and Mexico. The TPP will gradually eliminate these hindrances to Vietnamese exports.
Vietnamese Commercial Counselor in Mexico Hoang Tuan Viet said Mexico pledged to open its market to non-sensitive goods. For sensitive goods, Mexico will reduce taxes under a 10-16 year roadmap. For Vietnam, Mexico is committed to reducing 77.2 percent of tariff lines to zero percent when the TPP takes effect. For sensitive Vietnamese exports such as textiles, garments, and Robusta coffee beans, Mexico will reduce taxes to zero percent under a 16 year roadmap. Taxes applied to Vietnamese tra and basa fish will be reduced to zero percent within three years.
The TPP will introduce lots of common rules and regulations of its member countries in fields such as intellectual property, food quality, and labor safety. The trade deal consists of 30 chapters referring to not only traditional aspects such as goods, services, and investment, but also new matters such as e-commerce, supply chain facilitation, and state-owned enterprises.
In his recent article entitled The TPP, Opportunities and Challenges - Our Action, Prime Minister Nguyen Tan Dung wrote the TPP and Vietnam’s free trade agreement with the EU would bring Vietnam lots of opportunities but also requires it to cope with numerous challenges and difficulties.
“Competition will be fierce not only in TPP member markets but also in the domestic market at three levels: products, businesses, and at a national level, especially competition in terms of institutional quality and business environment. Businesses which are unable to improve themselves after reorganization and restructuring will possibly have to close or go bankrupt, and their workers will become unemployed; the agricultural sector and farmers will be vulnerable; the gap between the rich and the poor will increase if we ineffectively implement the rapid and sustainable development strategy to ensure that all people can benefit from economic growth. Vietnam will have to improve its legal system and increase human resource training to enhance the capability of state officials as well as technical and legal experts. The TPP will also require Vietnam to improve the operations of the Vietnam General Confederation of Labor and the entire political system,” PM Dung wrote.
To make the most of opportunities and overcome the challenges, Vietnam needs to enhance the competitiveness of the entire economy. It is necessary to identify the role of organizations and inpiduals that are responsible for implementing these important tasks, the PM said./.