Impact Assessment

TPP seen putting VN agriculture at stake

HANOI – Vietnam’s agricultural sector must be prepared to confront competition right on the domestic market when the Trans-Pacific Partnership (TPP) trade pact comes into force, experts told a conference in Hanoi last week.

Speaking at the conference on the efficiency of cooperation in the agricultural sector given Vietnam’s accelerated international integration, these experts said the sector is holding strong growth potential but it would face challenges.

Production methods must be improved while farmers and enterprises will have to coordinate. In addition, farm produce must be promoted via modern distribution channels like e-commerce.

Tran Cong Thang, deputy head of the Institute for Policy and Strategy of Agriculture and Rural Development (IPSARD), told the conference that import tariffs on several agricultural products in TPP will fall to zero, thus clearing the way for key Vietnamese farm items like rubber, wood, coffee, cocoa, cashew, pepper, rice and fruit to enter huge foreign markets.

Vietnam can import animal feed and veterinary medicines, among other materials, from Pacific Rim nations at lower prices thanks to import tax exemptions.

Nonetheless, Vietnamese producers of beef, chicken and pork will have to face fierce competition with rivals from other TPP member nations despite a road map for import tariff cuts.

“Imports of these products may not be big as Vietnamese consumers prefer fresh meat. But if food safety and hygiene are not guaranteed, consumers could shift to using frozen meat, which has already become an item of choice for young shoppers at supermarkets,” Thang said.

Although import tax on beef remains high, beef imports into Vietnam have grown swiftly over the past decade, from around US$3 million in 2005 to US$100 million in 2014.

Nguyen Huu Xuan, director of the Dong Thap Department for External Affairs, said Dong Thap is facing a number of hindrances like small-scale production, inconsistent quality, unstable consumption markets and poor technology.

Nagai Katsuro at the Embassy of Japan in Vietnam said Vietnam’s agricultural sector should change production, processing and distribution models apart from ensuring food hygiene and safety.

With some 0.62 hectare allocated for each household, it is extremely hard for farmers to add value to their farm produce, he said, adding intermediaries between farmers and enterprises benefit most.

Björn Koslowski, deputy chief representative of the German Chamber of Industry and Commerce in Vietnam, said Vietnamese exporters of agri-aqua-forestry products should pay attention to e-commerce. They are advised to develop websites with clear and adequate information in English to promote their products.

He said on some occasions, German companies wanted to cooperate with Vietnamese partners but they could not find information about them, so they had to go through intermediaries, which is quite inconvenient. Moreover, Vietnamese enterprises should connect to international trade websites like Alibaba and participate in trade fairs to promote their products.

When orders come, firms must response to customers in a timely manner, he said, adding this is a basic thing which businesses should do to integrate into the global economy efficiently. 

Source: SaigonTimes

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