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VEPR identifies issues for livestock from TPP and AEC

Released at: 14:56, 10/09/2015

VEPR identifies issues for livestock from TPP and AEC

Research shows the difficulties the sector will face from Vietnam's major integration efforts.

by Hung Khanh

On September 9 the Vietnam Institute for Economic and Policy Research (VEPR) released the results of its “Impacts of the Trans-Pacific Partnership (TPP) and the ASEAN Economic Community (AEC) on Vietnam’s Livestock Sector” research.

Because the content of the TPP remains confidential the research was based on scenarios that include tariff removals within TPP and AEC countries and a scenario of +/- 7 per cent reductions in non-tariff barriers in TPP and AEC countries.

The research showed that Vietnam’s livestock sector is characterized by small-scale, a dependence upon imports, a prevalence of disease, environmental issues, and low sanitary standards, and suffers from weak links, resulting in low productivity and competitiveness and a disadvantageous position in trade. It also pointed out the significant impacts on the country’s livestock sector from both the TPP and the AEC. Domestic production will shrink due to competition from TPP partners, especially the meat sector. Customers and importers will benefit from integration while producers and exporters will suffer due to competition from imports. Lastly, trade flows will change depending on the extent of tariff removals, as Vietnam will move away from US milk powder and dairy to New Zealand products and shift towards importing Australian livestock and US meat.

The research analyzed Vietnam’s dairy and beef sector because after Vietnam joins the TPP and the AEC, productivity in the livestock sector will decline and the sector’s workforce will be less in number, moving to other sectors.

The research also suggested certain policy changes, relating to improving production scales, compensating for losses in tax revenue, and supporting research and training to apply technology in the sector.

Those at the press conference for the release of the research acknowledged the results of the research and the difficulties the livestock sector will face from Vietnam’s international integration, but some believed the research sample should have been broadened to increase the reliability of the results.

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