Opportunities and challenges for Vietnam in TPP

The Trans-Pacific Partnership (TPP) agreement undertook 20 official mid-term negotiation sessions with the final session expected in early 2015.

According to Mr. Vo Tri Thanh, Deputy Head of the Central Institute for Economic Management (CIEM), Vietnam’s TPP participation will help steer the country towards intensifying the production process.

“In general, TPP commitments are ensuring consistency and homogeneity with the intention of restructuring Vietnam’s economy. This is the most decisive factor distributing our human resources effectively in order to contribute to economic growth. More importantly, the TPP helps reform economic institutions in accordance with international rules,” he said.

Clearly, together with benefits along the TPP track, Vietnam’s economy is ready to transform in combination with its current and future competitive capacity. The country should consider natural resources expenses, environmental protection spending and social welfare issues. With the country’s TPP participation, macroeconomics category is very important. Macroeconomic instability could hurt economic activities, harm confidence of investors and cause negative impacts on vulnerable subjects in the community.

Mr. Thanh added that Vietnam’s main benefits from the TPP agreement could be the improvement of the export and import market structure, joining regional and international production value chains, perfecting the institutional environment, increasing attraction to both domestic and foreign investment, creating new production competence and generating more jobs for workers. However, it also increases competition between domestic enterprises which will have a social impact on the country resulting in a need to adjust the legal system, management thought and capacity.

On the threshold of the TPP, domestic enterprises and the business community urgently need assistance in acquiring the appropriate information, legal instructions and practical orientations in order to take full advantage of investment and business opportunities.

Assessing benefits and risks to Vietnam’s joining the TPP as well as analyzing the impacts from the agreement to the economy are necessary preparations for domestic enterprises to effectively take advantage of the potential benefits.

(Source: CPV)