Vietnam confident and strong in integration

Sunday, 2016-02-07 11:13:19
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NDO - After five years of negotiations, 12 countries joined the Trans-Pacific Partnership (TPP) finally reaching an important agreement for the signing of a free trade agreement (FTA) in October 2015 in Atlanta, Georgia, USA. This is one of the most ambitious agreements ever formed in the world’s history.

From being a guest

TPP has been considered a model for regional economic cooperation in the early 21st century, consisting of 30 chapters, and covering not only traditional areas, such as goods, services, investment, but also covers other areas, such as e-commerce, supply chain and state-owned enterprises (SOEs), etc. The agreement has the strongest commitment and global influence, worthy of being a revered document of the new century.
Initially, TPP has four member countries namely Australia, Brunei, Chile and New Zealand, and was referred to as the P4 Agreement. Since 22 September, 2008, the US announced its participation, not with the P4 Agreement, but a new agreement with all parties.

Vietnam was invited to join the TPP negotiations from the beginning as an associate member and guest. After attending three sessions of negotiations, Vietnam officially joined the TPP on 11 January, 2010.
With high standards that outperform traditional FTAs in both scope and depth of commitments, the TPP brings freedom of trade to a higher level, with greater tax cuts, covering not only tax cuts, but also guaranteeing the lowest restrictive non-tariff barriers, forming rules for sensitive issues that are often bottlenecks in global economic integration such as agriculture; service; intellectual property rights and establishing the framework for new issues such as labour, SOEs, government procurement.

According to Professor Peter A. Petri, Brandeis University (USA), the TPP will boost global incomes by 0.7% (equivalent to US$223 billion), exports by 4.6% (equivalent to US$305 billion), US$315 billion increase in imports (4.2%), and foreign direct investment (FDI) to increase by US$255 billion (2.5%).

Efforts to affirm Vietnam’s position

International integration in general and international economic integration, in particular, is always accompanied by risks and challenges. However, Vietnam’s international experience and the experience of 30 years of reforms have shown various new opportunities, and affirmed that risks and challenges can be controlled.

Minister of Industry and Trade Vu Huy Hoang affirmed that when joining the TPP, Vietnam and other developing countries need more time to catch up to the high standards by improving and amending the laws, procedures, processes, and provide training and capacity building to enforcement officers. Vietnam will need a certain amount of time to transform so as to guarantee that it will be ready to apply equal standards with other TPP countries. The guidelines and policies of the Party and State are designed towards an effective public administration, with transparency, predictability, and compliance to the basic principles of all international agreements. Vietnam's participation TPP is entirely consistent with the principles of international economic integration of the Party and State. Participation in the TPP also helps accelerate the restructuring of economic entities, and promoting market economy orientation and the restructuring of SOEs.

Recalling the TPP negotiations in Atlanta (US), Deputy Minister of Industry and Trade Tran Quoc Khanh said the ministers met in Atlanta to handle the remaining problems from the Ministers’ meeting in Hawaii on January 7, 2015. On the last day of this round of negotiations, Vietnam made efforts with all countries to find a common voice on multilateral issues. Minister of Industry and Trade Vu Huy Hoang attended important meetings with the Ministers of the United States, Mexico, and US Trade Representative M. Froma. Thereby, Vietnam and its partners have identified and agreed on the major principles for further negotiations. At 3:30 AM on October 5th, 2015 (Hanoi time), the last bilateral negotiations between the United States and Japan concluded, marking the conclusion of the TPP negotiations.

Actively engaged in a common game

With the results of the negotiations, the TPP will be a comprehensive agreement, on the basis of mutual benefits of all participating countries, with considerations of the countries’ different level of development, and is expected to promote economic growth in all countries apart of the TPP; to create jobs, reduce poverty and improve the living standards of the people; to promote transparency, good governance, and strengthen labour standards and the environment.

For Vietnam, according to a study by the Peterson Institute for International Economics (PIIE), after the signing of TPP, Vietnam will have the largest income and exports increase among the 12 TPP countries, with a growth rate of 13.6% and 31.7% respectively. The TPP can potentially help increase Vietnam's GDP by US$23.5 billion in 2020 and 33.5 billion in 2025, with exports to increase by US$68 billion in 2025. It will have a strong impact on global and regional trade linkages, such as the World Trade Organisation (WTO), Regional Comprehensive Economic Partnership (RCEP), Trans-Atlantic Trade and Investment Partnership, the Free Trade Area of Asia - Pacific (FTAAP). Especially, when import tariffs from major markets like the US and Japan are reduced to 0% for goods from Vietnam, it will surely be a huge success.

TPP commitments in service and investment will have a positive effect in improving the investment environment and contribute to attracting FDI. Also, companies providing services will have easier access to markets of the TPP member countries. Participation in the TPP will also create opportunities to enhance growth, increase employment, raise incomes and contribute to poverty reduction.

With regards to institutional reforms, the TPP with its high standards of governance, transparency and behaviour of the state apparatus will help us to improve the socialist law-governed State; promote a streamlined, clean and strong organisational structure; boost administrative reform; strengthen accountability, discipline and prevention of corruption, wastefulness and bureaucracy.

President of the Central Institute for Economic Management, Ministry of Planning and Investment, Nguyen Dinh Cung comments that in general, the TPP has no specific requirement for authorities and businesses to change. However, the TPP will create a rigorous and healthy game. A game in which, winners will be those who actively learn the rules and make bold reforms to adapt to the new environment.

Vietnam is negotiating and signing FTAs with 55 countries and key trade partners around the world. According to Deputy Minister of Industry and Trade Tran Quoc Khanh, with proactive policies and active integration, Vietnam has not only participated in the common global game, but also actively contributed to the rules of the game. Joining the TPP is not the first time for us to further our international economic integration. I believe that Vietnam is confident and strong in integration, Deputy Minister Khanh said.

In the framework of the 23rd APEC Economic Cooperation Forum in Manila last November, leaders of the Asia - Pacific region participating in the TPP held a meeting to exchange opinions and agree on the official signing ceremony and define the roadmap for the Agreement to come into force. The meeting agreed to hold the signing ceremony on February 4th, 2016 in New Zealand; and provide a roadmap for the Agreement to be effective two years after the signing.