Effort to educate firms ratchets up a notch ahead of TPP launch

Many senators and even some US presidential candidates do not approve of the Trans-Pacific Partnership (TPP). If the US Senate does not approve it, will the TPP be a lost cause?

To my knowledge, some US senators do not want the Senate to ratify the TPP, some want to delay the application, while others want to renegotiate certain points. This is their right. National Assembly members in Vietnam and equivalents in other countries have the same right to ask the governments to re-negotiate some points or just veto the ratification of international commitments. In order for the TPP to take effect, the legislators of all 12 countries have to ratify them. However, in case some do not, the TPP has this clause that says that when at least six member countries, accounting for 85 per cent of the combined GDP of the whole 12 countries, ratify the agreement, the TPP is going to take effect and there’s no need for renegotiation. If the national assemblies of some countries do not ratify the agreement the TPP is still effective for countries that ratify it.

So when do you think the TPP will be made effective?

Each country has a different procedure in ratifying international agreements. In some, it takes between three and six months. In others it takes about one or two years. I expect the TPP to come into effect in 2018.

Many economists have said that when the TPP comes into effect, Vietnam will be the country that benefits the most. What is your opinion?

I’ve heard many international economists and financial institutions make this remark. But in my opinion, the benefit is going to be equal among member countries. Vietnam may be the country to whom the partnership offers the most opportunities, such as the opening of export markets, and the opportunity to improve administrative procedures, but Vietnam has to grab these opportunities.

For example, in the Japan-Vietnam Economic Partnership Agreement, Japan didn’t open the market completely to many goods where Vietnam has a competitive advantage. But when Japan and Vietnam both join the TPP, Japan, one of the world’s biggest economies, will be fully opened for these goods. The opportunity is there but the question is how Vietnamese goods meet the demand of Japanese consumers, How do they meet Japan’s food safety and origin requirements? How will they compete?

What can Vietnam do to make use of these opportunities?

To make use of these opportunities, the government, government agencies, localities, associations, and businesses have to make a concerted effort. Educating companies on the contents of the TPP is very important. Only then can companies know the opportunities and challenges involved in exporting their goods and services and competing with goods and services from other countries in the TPP.

This time it looks like the government is doing a good job in educating companies about the TPP, better than for all the previous agreements. Moreover, after the implementation of previous agreements such as the Asean Free Trade Area (AFTA), the Vietnam-US Bilateral Trade Agreement (BTA), and Vietnam’s commitments to the WTO, companies are more proactive in seeking out information.

Government agencies have issued many documents related to investment and business, raising the competitiveness of the economy and improving the investment environment. This is the evidence of the government’s readiness. In terms of tax, customs, and insurance, the prime minister has asked government agencies to improve administrative procedures to save time for companies, with a clear target that Vietnam can be part of ASEAN 4 in this respect by the end of this year.