The Trans-Pacific Partnership (TPP) is a game Vietnam can afford to play, as it has 20 years of experience in economic integration with the world, the lead Vietnamese negotiator of the trade deal said on Tuesday.
Deputy Minister of Industry and Trade Tran Quoc Khanh was surrounded by reporters shortly after his arrival at Noi Bai International Airport from the U.S. city of Atlanta, where 12 countries concluded negotiations on the historic TPP pact on Monday.
Khanh, who led the Vietnamese delegation at the five-day, around-the-clock talks, said the trade accord will bring both benefits and difficulties for Vietnam.
“One of the biggest challenges is the competition pressure,” he told reporters at the airport in Hanoi.
“However, this is not the first time we’ll integrate with the world.
“We have 20 years of experience, and a similar amount of time for preparation, so I believe we are strong enough to play this game.”
Negotiations for the TPP had been ongoing for five years before Monday’s conclusion.
The agreement must still be ratified by lawmakers in the TPP nations, which include Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the U.S. and Vietnam, before it can take effect.
Khanh said Vietnam’s apparel and footwear industries will have the biggest opportunities because the import tariffs in major markets such as the U.S. are set to be zeroed.
“Vietnam also has chances to boost export, join the supply chain to be established among the TPP countries, attract more foreign investment, generate more jobs and diversify export markets,” Khanh told reporters.
The TPP would liberalize trade in 40 percent of the world economy for a region stretching from Vietnam to Canada.
Vietnam will thus no longer have to rely too much on the East Asian market for its exports, but can grab opportunities to sell its goods to North America, especially the U.S., according to the deputy minister.
The agriculture and livestock sectors, however, will face challenges thanks to stricter requirements and technical barriers set by the TPP, Khanh noted.
The deputy minister expressed his hope that the Vietnamese agriculture sector will be improved and restructured in a way that makes it strong enough to “win on home soil.”
Vietnam will have around ten years to prepare, before agriculture taxes are cut to zero, he added.
“There is no reason why we should lose to foreign competitors on home turf,” he asserted.
Vietnam among the biggest winners
Vietnam is said to be among the biggest winners after the TPP talks were concluded, according to Eurasia Group.
The political risk consultancy firm said in a report that the trade deal is likely to boost Vietnam’s GDP by 11 percent to 2025, with exports growing 28 percent in the period as companies move factories to the low-wage country.
Vietnam’s seafood sector will benefit from the elimination of import tax on shrimp, squid and tuna, now averaging 6.4 - 7.2 percent, while Vietnamese apparel manufacturers will enjoy reduced import duties in the U.S. and Japan.
Vietnam will be able to grab orders from China thanks to its low labor costs, but the impact may be limited as the Southeast Asian country will still face strict rules-of-origin on materials, according to the Eurasia Group report.
On the other hand, eliminating import taxes on pharmaceutical products from the current average of about 2.5 percent will lead to tougher competition between Vietnamese domestic companies and foreign firms, the consultancy noted.
The TPP accord will also increase patent protection, restricting Vietnamese companies’ access to new products as well as their ability to produce new drugs, according to Eurasia Group.