Trade, investment, growth, and job creation to do well under agreement, workshop hears.
The TPP is expected to generate considerable benefits for Vietnam in trade, investment, growth and job creation, Ms. Victoria Kwakwa, the World Bank’s Country Director for Vietnam, told a workshop organized by the Academy of Policy and Development on the impacts of the agreement on Vietnam, in Hanoi on November 26.
|The TPP includes provisions that focus on procedures to ensure fair, transparent and non-discriminatory treatment of suppliers in government. This requires Vietnam to apply best practice and internationally-accepted regulations on government procurement.|
Vietnam is the smallest country among the TPP members but has strong trade and investment links with other members. Members account for 38.8 per cent of exports, 22.2 per cent of imports, and 38.3 per cent of FDI in Vietnam. “The TPP offers significant opportunities for the country,” she said.
Vietnam’s GDP will increase 3.6 per cent by 2020 thanks to the TPP, with exports, imports, investment and capital stock rising by 5, 7.6, 13.6, and 3.1 per cent, respectively, by 2020.
She forecast that the TPP would facilitate market access and improve export opportunities for Vietnam. “The TPP is expected to reinforce the further diversification of Vietnam’s export basket towards manufacturing,” she said. “It will also boost the country’s imports, reflecting integration into the global value chain.”
Moreover, domestic reforms are also expected to stem from the TPP. Structural reform in Vietnam will be anchored and accelerated. She explained that the agriculture sector would reduce in size, with a shift to manufacturing, pushing the country’s industrialization process.
“The TPP not only removes trade barriers and enhances access to key export markets, it will also have a tangible impact on regulatory quality, intellectual property rights, investor protection, competition, SOE management, labor and environmental standards, financial services, and telecommunications,” she said.
The workshop also heard of the challenges in reaping the potential benefits from the TPP, such as rule of origin, technical barriers to trade, SOEs, government procurement, and labor and environmental issues.
GDP of Vietnam compared with some other countries
Mr. Le Van Tang, Director of the Public Procurement Agency under the Ministry of Planning and Investment, noted that the challenges and opportunities from the TPP are related. “If Vietnam cannot utilize the opportunities from the TPP then they become challenges,” he explained: “If they can be utilized, challenges become greater opportunities.”
For example, in government procurement, the TPP will enhance the competitive capacity of Vietnamese enterprises if they understand they must improve to participate in global procurement, using IT to bid online and reducing product prices while guaranteeing quality. If enterprises don’t understand this, Mr. Tang noted, the TPP will be a major challenge because of the competition among the 12 members. Vietnam would also struggle to compete with the 28 countries of the EU when the EU-Vietnam FTA comes into being.
- World Bank
- Victoria KwaKwa