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Two advantages that Vietnam can get when entering the TPP are increasing the Vietnamese
economics and enhancing the GDP of the nation.
Tran Thi Lan Vi
The integration is one of the most important conditions for a country to survive and
develop. Indeed, to develop the country, Vietnam has in turn joined many largest
economic organizations in the world for over 20 years. “Since implementation of the
open-door economic policy, Vietnam has signed cooperative economic and trade
agreements with EU (1992), engaged in ASEAN membership (1995) and AFTA,
ASEAN Free Trade Agreement (2001), gained APEC admission (1998), sealed a USVietnam bilateral trade pact (2001), and won WTO admission as the 150th member of the
organization with official recognition on January 11, 2007” (Overview of Vietnam’s
Economy, nd). Recently, Vietnam government has tried to get Vietnam into the world
trade markets by entering the TPP (Trans-Pacific Strategic Economic Partnership
Agreement) among 12 countries. Many people are happy and hope that this event will
help increase the Vietnamese economics as well as enhance the GDP of the nation.
However, some people still suspect for the adverse effects of it on the Vietnamese
farmers and the competition of the domestic companies. Regardless of these challenges,
we cannot deny the benefits and the tremendous opportunity that Vietnam can get when
joining the TPP. There are two advantages that Vietnam can get when entering the TPP
such as increasing the Vietnamese economics and enhancing the GDP of the nation.
After negotiating, Vietnam eventually joins the TPP Organization for economic
development and integration. So, what are advantages that the TPP agreement will bring
to Vietnam? “The aim of TPP agreement is a high-standard, ambitious, comprehensive,
and balanced agreement that will promote economic growth; support the creation and
retention of jobs; enhance innovation, productivity and competitiveness; raise living
standards; reduce poverty in our countries; and promote transparency, good governance,
and enhanced labor and environmental protections. We envision conclusion of this
agreement, with its new and high standards for trade and investment in the Asia Pacific,
as an important step toward our ultimate goal of open trade and regional integration
across the region.” (Summary of the Trans-Pacific Partnership Agreement, nd). Therefore,
signing this agreement means a lot to Vietnam, especially to Vietnamese economics.
Thank to this agreement, Vietnam will have many benefits to develope the country.
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Firstly, when joining the TPP, Vietnam will have chances to increase the Vietnamese
economics. Along with the participation in the TPP organization, Vietnam will have the
opportunity to gain more profit from the export of goods to developed economies,
especially agricultural products such as rubber and pepper. According to (Hương, 2016),
many members of TPP are the major agricultural product consumption markets of
Vietnam. Therefore, joining the TPP is the great opportunity for the Vietnamese
agricultural products to reach the global market with tax rate of 0% as the US, Australia,
Canada, New Zealand and Japan. When TPP is in effect, Vietnam will have huge
competitive advantage in comparison with other agricultural exporters like India, China
and Thailand (the countries are not TPP) in items like seafood, wooden… Besides,
import tax of many important commodities will decrease when joining the TPP, which
will help the Vietnam economy increase rapidly. “The most important thing is, the import
duty for many commodities will be reduced to 0%, as strong nudge to export, positive
impact on the income of people, improving the competitiveness of exports, enhance
exports” (Cơ hội và thách thức khi Việt Nam gia nhập TPP, 2015). When the import duty
of many commodities reduced, people can have a chance to by goods with reasonable
prize. “Consumers and the manufacturing industry use imported raw materials from these
countries as inputs will benefit from cheap raw materials, reduces costs and production
activities. It can help Vietnamese enhance the competitiveness of the industry”
(thuvienphapluat.vn, 2015). Therefore, joining the TPP will open new directions for the
economic development of Vietnam such as increasing profits from the export of goods
and reducing import taxes of many commodities.
Secondly, Vietnam can have chance to enhance the GDP of the nation when joining the
TPP. Entering the TPP will open opportunities for Vietnam to attract investment and
cooperate with other large countries. Because capital can help promote economic
development of a country, so the emphasis on attracting capital and foreign cooperation is
very important for that country. “Accordingly, GDP is estimated to increase by 35.7% in
2025 compared to the base without TPP.” (Thảo, 2014) ; “On 28-5, Institute of Economic
Research and Policy (VEPR) published Annual Report Economic VN 2015, which
confirmed the VN GDP will rise from 1.03 to 2.11% after participating the Trans-Pacific
partnership agreement (TPP).” (VEPR: GDP của Việt Nam sẽ tăng thêm 1-2% sau khi
gia nhập TPP, 2015). In addition, enhancing the GDP of the nation also means a closer
approach to the world's financial resources to develop the nation. “When join TPP, the
level of open financial service markets of Vietnam will also rise, easing to attract foreign
investment capital. These are good conditions for strengthening the banking system
liquidity and access to international funds with lower costs.” (An, TPP: Cơ hội và thách
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thức cho công nghiệp phụ trợ Việt Nam, 2016). Thank to this agreement, Vietnam can
access to the giant capital of the world more easily. In short, signing the TPP agreement
will bring many big benefits for all members as it increases GDP of every country in TPP
and as a result, Vietnam will increase GDP as well.
Although Vietnam joined the TPP to promote economic development, some people are
still skeptical about its negative impact on farmers and along with that is the competition
of economic companies. Despite being a country with major agricultural industry but the
level of production of the Vietnamese farmers is not high and farming equipments are
still rudimentary. Integration is the desire of many countries, but anything has two sides
of it. “Besides the “gold” opportunity, TPP agreement also creates significant challenges
for Vietnam agriculture.” (TTXVN/Vietnam, 2015). As we all know, the agricultural
sector is still the most affected industry of the nation after TPP. (Ninh, 2016) claims that
firstly, there are now up to 60% of Vietnam's population depends on agriculture but many
farmers, who are vulnerable to "be hurt" in the integration process has yet to be equipped
with more knowledge. This leads to the competitiveness of some commodities in the
sector remains weak, especially for agricultural products. Besides, “When participate in
the TPP, the business will encounter enormous challenges for competition when we must
open markets, which can cause some social consequence. Trade liberalization too
abruptly can lead to bankruptcies and unemployment in the enterprise with weak
competitiveness.” (An, TPP: Cơ hội và thách thức cho công nghiệp phụ trợ Việt Nam,
2016). As we see, the challenge when joining TPP is not less. So Vietnam needs to focus
more investment on the agriculture sector in order to fully exploit the advantages of the
agricultural sector of the country as well as pay more attention to small and medium
businesses all over the country.
If Vietnam accepts to face these challenges, those are actually an opportunity that cannot
to be missed by famous as well as domestic enterprises. Since joining the TPP, Vietnam
will have the opportunity to interact with modern facilities and modern farming methods
from the world’s largest countries. “Mr. Nguyen Dang Vang, chairman of Vietnam
Livestock Association, said the agriculture sector is also attracting foreign capital in
recent years. Nearly 20 French companies came to Vietnam to seek investment
opportunities of cooperation in the field of machinery, experienced technical and
livestock.” (LÀN SÓNG DOANH NGHIỆP NGOẠI ĐỔ VỐN VÀO VIỆT NAM, nd)
Besides, improving quality of products is another issue that needs to be considered. Since
once became a member of the TPP, the requirements on the quality of Vietnam’s
products will be increasingly tougher. “There is high possibility that TPP will apply rules
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of origin "from yarn", demand the textile product must be manufactured from yarns and
fabrics of the TPP countries to ensure the benefits of TPP agreement. Besides, they
ensure that textiles are not eligible from abroad TPP not enjoy privileges reserved for
members TPP” (Ezlaw , nd) explained. If we focus on improving the quality of domestic
products and meet the criteria of foreign consumers, our country will have the
opportunity to increase the rate of domestic GDP, as well as empowering countries in the
international area when becoming one exporter of many high- quality items. “Besides
having to compete with rivals fair "stunned" from abroad in many areas, we will have
access to a new generation of technology, machinery, materials, completely new, is the
huge capital will pour into the economy after the time of signing the agreement.” (Sơn,
2013).
In sum, the promotion of national economic growth and the growth of GDP are two
enormous advantages that we can get when joining the TPP. When joining this
organization, Vietnam’s industries not only export more goods, reduce import commodity
tax but also attract investment for the nation. To integration and development, Vietnam
has decided to join the TPP organization with the advantages and difficulties ahead. But
if we could seize this opportunity well, our country's economy will be growing steadily.
“In summary, the importance of economic and strategy of the TPP along with the
strategies of international economic integration of Vietnam explain the strong political
will of the country to pursue this agreement despite the gap of development between
Vietnam with other members.” (Observer, 2015). Among many economic agreements,
the TPP agreement is considered to be one of the most important agreements to develope
the nation. To achieve that goal, every people in Vietnam have to prepare themselve for
every situation ahead, adapt with new markets and develope our country together.
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