Prime Minister Nguyen Xuan Phuc has reiterated that Vietnam will continue to integrate into the global economy at a rapid pace regardless of whether the long-awaited TPP comes into effect or not.
Vietnam continues to integrate into the world, with a wide range of trade pacts signed and to be signed,” he told the National Assembly (NA)’s Q&A session on November 17.
His comments come at a time when doubts are being expressed around the world over the future of the US-led TPP following the election of Donald Trump, who previously spoke out against it.
Vietnam has prepared the necessities to join the TPP and is ready to submit it to the NA for ratification. “For now, it is not appropriate to submit the TPP to the NA,” he told the Q&A session.
He also noted that Vietnam views the ASEAN market as being important since the region ranked third in trade behind the EU and the US. “Vietnam will continue pushing cooperation with the ASEAN market, especially in terms of exports,” PM Phuc said.
Minister of Industry and Trade Tran Tuan Anh also said that the country’s stance is to diversify multi-faceted trade relations. “The TPP is among the trade pacts Vietnam has been pursuing, given the fact that its benefits are significant,” Minister Anh said on the sidelines of the ongoing NA session.
“The economy will benefit from expanding trade markets if the TPP is adopted by all parties. But Vietnamese companies will have to face fiercer competition and more thoroughly integrate in the global economy if the TPP fails.”
Vietnam is expected to benefit greatly from the TPP, with $33 billion perhaps being added to the economy’s GDP annually. This figure could even rise to $68 billion by 2025, according to reports released at a June seminar on the TPP co-organized by the NA Committee for External Relations and USAID in southern Ba Ria Vung Tau province.
“Of the free trade agreements Vietnam has signed with different countries and economic regions, the commitments to eliminate tariffs in the TPP are the most aggressive,” said Mr. Bui Ngoc Tuan, Tax Partner at Deloitte Vietnam. “Vietnam is considered to be one of the most advantaged members in providing opportunities to manufacturing exporters, both foreign and domestic, to put more investment into making qualified ‘Made in Vietnam’ products and utilizing low or zero tariffs under the TPP to export to the US, Japan and other TPP members.”
Two of Vietnam’s largest partners, the US and Japan, have committed to eliminating 71 per cent of tariff lines when the agreement takes effect, which represent 75.3 per cent of Vietnam’s export turnover to the two markets, and at the same time committed to remove 95-100 per cent of tariff lines within the following ten years, Mr. Tuan added.
Knowledge about the TPP among Vietnamese enterprises is on the rise and so is the positive perception of the agreement, with 72 per cent in favor last year, up from 62 per cent in 2014, according to a survey by the Vietnam Chamber of Commerce and Industry (VCCI).
The TPP brings together Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam. Their economic ministers signed the trade pact in New Zealand in February.