TPP will help raise Vietnam’s global status

The 14th round of talks on the Trans-Pacific Partnership (TPP) agreement ended in Virginia, USA, on September 16, with remarkable progress being made in various areas.

Head of the Vietnamese delegation, Deputy Minister of Trade Tran Quoc Khanh, talked about the results of the round in an exclusive interview with a Washington-based VOV correspondent. VOV online presents the following excerpts from the interview.

Reporter: Could you give us a brief comment on the results of the talks?

Khanh: We have just concluded the talks with eight countries, namely the US, Brunei, Chile, New Zealand, Peru, Singapore, Malaysia, and Australia.

I think the parties concerned made remarkable progress in areas related to the commodity market, customs, rules of origin, technical trade barriers, as well as food safety, services, and investment.

They also exchanged views on other areas, especially the environment, employment, and intellectual property rights.

We were very interested in opening the market for Vietnamese garments to enter the US, because garments are one of our key products on the negotiation table.

The US said it has gradually opened its market for garments from other countries as they are a sensitive commodity.

We are trying to negotiate with the US to work out a solution that is acceptable for both sides, while protecting the interests of Vietnamese garment makers.

We also assured the US that there is no need for specific regulations on the State enterprise sector, because Vietnam has made similar commitments to the World Trade Organisation. However, Vietnam is ready to enter negotiations if necessary.

We reminded negotiating countries to take into account the situation in Vietnam, a country that is still developing. We are trying to maximise Vietnam’s interests in negotiating on other issues in order to strike a balance between interests and obligations in the agreement.

Reporter: What are the opportunities and challenges that the TPP will bring to Vietnam?

Khanh: Our primary goal in joining the TPP is to expand overseas outlets for our products. We have established free trade agreements (FTA) with Japan and the Republic of Korea, but not yet with the US.

TPP membership will pave the way for Vietnam to achieve a similar FTA with the US, which would help increase Vietnamese exports and attract foreign investors.

If we also put forward commitments to amendments of some investment regulations, it will eventually increase investment in Vietnam.

As one of the founders of the TPP, Vietnam’s position will be raised in the region as well as the world. In addition to economic interests, we must weigh the pros and cons of other interests such as political and geo-political issues.

TPP negotiations also present some challenges, one of which is opening the market for TPP member economies. I think this is not a big challenge, because Vietnam has already established FTAs with most of the negotiating countries, except for the US and Peru.

The US export mechanism is supplemental to the Vietnamese export mechanism rather than direct competition. Of course, competition is inevitable, especially for farm products such as beef and chicken.

But I think if we come up with an appropriate roadmap for tax reductions, we will overcome these challenges and be able to seize opportunities in this lucrative market.

Reporter: What are Vietnam’s advantages for overcoming challenges and taking advantage of opportunities?

Khanh: We have drawn some experience from implementing other FTAs. The fact is that over the past two or three years Vietnamese businesses have started to pay due attention to market opportunities available through FTAs. As a result, the number of letters of origin (L/O) granted to businesses exporting goods to China, Japan and the Republic of Korea has increased sharply.

Once an FTA with the US is signed, I believe that Vietnamese businesses will have more opportunities to penetrate this huge market.

Vietnam has been implementing its Doi Moi (Renewal) process in all aspects of life since 1986. It has joined the World Trade Organisation and signed a bilateral trade agreement with the US, as well as FTAs with a number of other countries. Many policies have also been revised to meet WTO commitments. This is an advantage for us to grasp new trends in global trade so we can consider additional commitments to accelerate regional and international economic integration.

However, the competitiveness of several Vietnamese economic sectors and businesses remains weak. The State has realised the situation and introduced a number of programmes to restructure the national economy, and renovate the growth model to improve the country’s competitiveness and that of every business and product.

We hope that economic restructuring will create a healthy competitive environment that will help businesses grow and be able to compete with their foreign counterparts.

Vietnam has entered into fierce competition since it signed the bilateral trade agreement with the US, under which it had to open its market to several US farm products.

Since joining the WTO, Vietnam has reduced import duties, and opened its market to foreign service providers. This fierce competition has helped many Vietnamese businesses grow stronger and stand firm.

However, the market will open even further under the TPP than it did for the WTO and other FTAs. That is why we have to create a roadmap for opening the market at an appropriate level, making it easier for businesses to study the challenges and prepare to face competition when Vietnam lowers its import tax rates to zero percent.

Reporter: Vietnam has successfully exported its seafood to the US, but not key farm products such as dragon fruit. Why is this so?

Khanh: I think one of the reasons is that US consumers are interested in the quality of products. Perhaps we do not meet US criteria at the moment, but when farmers and businesses learn about procedures for foreign markets, they will figure out how to meet those requirements and their farm products will be then available on the shelf.

Reporter: Last week, the countries negotiating the TPP vowed to complete the agreement in the earliest possible time. Do you think that the negotiation process will be concluded by the end of this year?

Khanh: As far as I know the agreement will not be signed this year, because Canada and Mexico are scheduled to take part in negotiations in December. But, we are interested in the quality of the negotiations rather than their deadline. We can only conclude the negotiations when the interest when the interests of all parties concerned are met./.

September 18, 2012

Source: CPV/VOV news