Impact Assessment

VN: Free trade pacts will boost competitiveness

HA NOI (VNS)— Active integration will boost corporate competitiveness, said Nguyen Quynh Nga, a member of Viet Nam's delegation negotiating the Trans-Pacific Partnership (TPP) deal, during a seminar concerning corporate knowledge about the pact, which was held in Ha Noi yesterday.

According to her, difficulties are inevitable at first, thus enterprises ought to design their integration moves carefully.

This deal and a range of new-generation free trade agreements (FTAs) will have a significant impact on the Vietnamese economy as a whole, stressed Vietnam Chamber of Commerce and Industry (VCCI) Chairman Vu Tien Loc.

He continued by saying that domestic enterprises have capitalised on only a fragment of the benefits brought about by FTAs, while the foreign-invested sector, especially manufacturing for export, are earning the most advantages.

Agreed with Loc, economic expert Pham Chi Lan said that Vietnamese firms took advantage of only 30 per cent of benefits from the Free Trade Agreements (FTAs).

"More importantly, those who benefit most from FTAs are foreign direct investment (FDI) enterprises specialising in exports, while Vietnamese firms haven't enjoyed many benefits from FTAs," she said.

Meanwhile, Nguyen Thi Thu Trang, Director of the World Trade Organisation and Integration Centre under the VCCI, noted that updating information on when these pacts take effect and their road maps was key to whether a company succeeds or fails to integrate.

"Businessmen need to ready themselves for relevant trade defence measures as well as quality and copyright regulations," Trang said.

Dang Phuong Dung, Vice Chairwoman of the Vietnam Textile and Garment Association, said firms in her sector face obstacles in terms of materials and capital sources once the TPP agreement officially starts.

Central Institute for Economic Management expert Vo Tri Thanh took note of the confidence of domestic companies in their comparative advantages, which will help them overcome difficulties and gain footholds internationally. He also said that transparent policies and strict implementation of the commitments are needed.

The Trans-Pacific Partnership (TPP) trade deal will be formally signed in New Zealand on February 4.

The TPP negotiations started in 2005 and concluded in late October last year. The 12 members of the agreement are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Viet Nam.

Once it takes effect, the agreement will establish a free trade zone that represents nearly 40 percent of global GDP.

Source: VNS

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