Three Groups Of Businesses To Meet Difficulties When Vietnam Joins TPP

Three groups of enterprises will be under pressure once the Trans Pacific Partnership Agreement (TPP) takes effect, according to lawyer Tran Huu Huynh, chair of the Vietnam Arbitration Center.

Lawyer Tran Huu Huynh, chair of the Vietnam Arbitration Center.

While the Trans Pacific Partnership Agreement (TPP) is believed to bring great opportunities to develop the economy, it will also bring challenges.

Upon the TPP, Vietnam will have to cut import tariffs and open the domestic market widely to imports from 11 TPP countries. 

Therefore, the businesses which previously enjoyed preferences offered by the State, will suffer.

As the enterprises have been living on preferences, they may be unable to adapt to the new circumstances, under which they have to join a market with healthy competition and with no support from the State.

Three groups of enterprises will be under pressure once the Trans Pacific Partnership Agreement (TPP) takes effect

The second group of businesses to bear negative impacts from TPP will be those in agricultural production. 

A MARD report said that Vietnam now has 10 million households and 23 million farmers living on agricultural production. 

The figure is even higher than the total number of farmers from the other 11 TPP countries (21 million).

Experts all shared the same viewpoint that agriculture would be one of the most vulnerable fields to bear impacts from TPP because of the small agricultural production scale.

Land agglomeration proves to be the prerequisite condition in expanding the agriculture production scale. 

An expert said he had met farmers who use up to 35 hectares of land in Australia. This is impossible in Vietnam.

And the third group comprises enterprises in the sectors which have to strictly comply with regulations on intellectual property, and enterprises related to environmental problems.

Though Vietnam has laid down a legal framework on intellectual property laws, problems still exist in the enforcement. 

Meanwhile, though Vietnam sets very high requirements on intellectual property rights, the requirements in the TPP Agreement are even stricter in many issues.

Huynh said in principle, the businesses operating on a small scale and household businesses would meet bigger difficulties.

However, he said that Vietnam still can overcome difficulties if it can find reasonable solutions.

Though agriculture is considered one of the most vulnerable sectors, vegetable and seafood exports are still believed to have great opportunities with the TPP.

A report of IPSARD, the institute for policies on agriculture development, showed that Vietnam’s vegetable and fruit exports to TPP countries, have been increasing rapidly in recent years. 

Dragon fruit has been exported to New Zealand and Australia, while litchis, longan and mango have entered the US market.

IPSARD believes that Japan, the US and Mexico are markets with the most potential for Vietnam’s vegetables and fruits.

Khoa Le

Source: Vietnamnet.vn