An Australian diplomat has discussed the chances and challenges brought by the Trans-Pacific Partnership accord, to which both Vietnam and Australia are party, with Tuoi Tre(Youth) newspaper, shortly after the trade pact was reached last week.

The ambitious TPP, which aims to liberalize commerce in 40 percent of the world's economy, was struck by 12 nations in the U.S. city of Atlanta on October 5.

The other ten TPP nations include Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and the U.S.

Tuoi Tre asked for comment from the Australian Embassy in Hanoi on the historic trade deal and was responded by Chargé d’Affaires Layton Pike on October 7.

What are the advantages for Vietnam after the TPP pact was closed?

A number of studies have shown that Vietnam will be the single biggest winner from the TPP with GDP expected to increase by up to ten percent by 2030.

Vietnamese consumers will also benefit as prices will be reduced across a range of products including food, transport services and electrical products.

What kind of industry or product in Vietnam that the TPP benefits most?

Vietnam’s world-class clothing and textiles industry is likely to be the biggest winner from reductions in tariffs.

Experts suggest that as a result of the reductions in tariffs, Vietnam will export an additional US$6 billion in clothing and textile products per year.

In anticipation of the TPP agreement, investment in this sector has already reached $4.18 billion over the first six months of the year.

This new investment will also help to create millions of new jobs.

How does the TPP accord help attract more FDI, particularly from Australia, to Vietnam?

One of the key benefits from the new agreement is that it will help Vietnam to further participate in global value chains.

For example, the TPP establishes one new set of rules and one set of documentation to claim preferential tariff treatment to goods exported to other TPP member countries.

This will create new incentives for foreign investors, including those from Australia, to set up operations in Vietnam in preference to investing in other non-TPP member countries.

For Australia, one of the most important benefits will be improved access to the Vietnamese education market, which is already Australia’s third largest.

Under the TPP, Australia’s education institutions will be able to offer a wider range of higher education courses directly to Vietnamese students.

This will offer more choice to Vietnamese students and encourage more Australian educational institutions to expand their operations in Vietnam.

What should Vietnam do or improve in order to benefit from the TPP agreement although the country is the least developed among the 12 members?

The challenge for Vietnam will be to ensure there is flexibility in the economy to allow it to take maximum advantage of the new opportunities presented by the TPP.

This means that there need to be simpler regulations on both starting and closing a business, as well as placing fewer conditions on firms wishing to enter new industries.

Vietnam will also need to ensure that its labor market can meet the changing demands in the economy.

This will require investments to build new skills as well as free up labor movement to ensure that people are able to take advantage of new employment opportunities.

Australia is providing assistance to Vietnam in both of these areas.

We are helping to improve the business environment through our ‘Restructuring for a More Competitive Vietnam’ program.

We are also helping to build a more highly skilled workforce in Vietnam through our new AUD40 million Human Resource Development Facility and by supporting technical and English language skills in Vietnam’s tourism and hospitality industry.

How does the deal impact on Australia-Vietnam bilateral trade?

Two-way trade between Australia and Vietnam is already substantial, valued at more than AUD8 billion in 2014. Under the TPP, we expect this will grow even further.

Australia has already agreed to eliminate or significantly reduce many of its tariffs under the current ASEAN, Australia and New Zealand Trade Agreement and so there will be fewer new benefits for Vietnamese exporters from the TPP agreement.

However, there will still be clear benefits for Vietnamese consumers and businesses.

For example, consumers will benefit from the elimination of tariffs on Australian wine and from improved access to education services.

Producers will also have greater access to Australia’s leading mining equipment, technology and services which should improve competitiveness in this important industry.

Thank you!