The Trans-Pacific Partnership (TPP) was signed on February 4, 2016 by 12 countries, namely Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Viet Nam, representing 40% of global GDP and 30% of global trade. This is a new-generation free trade agreement (FTA) which is expected to become a model for regional and international trade development with higher standards in the context of fast production force development, increasingly deep and wide international integration.
Prime Minister Nguyen Tan Dung
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Viet Nam’s signing of the TPP was not merely the outcome of the five-year persevering negotiations under the spirit of both cooperation and struggle, based on the top objective of national interest. More profoundly, this is the fruit of the 30-year renovation, in which economic integration is a vital component which has been strongly asserted and clearly interpreted in the resolutions of the Party. This is also experience withdrawn from the country’s international integration realities following the signing and implementation of the Viet Nam-US bilateral trade agreement; the participation in the ASEAN free trade area, FTAs between ASEAN and its partners, and the accession to the World Trade Organization, etc. Economic integration is also an important content of the modern socialist-oriented market economy institutions that are under construction.
I
In pursuance of the orientation of proactive and active international integration, Politburo (tenures 10th and 11th) approved the Government’s proposal of joining talks on several new FTAs. These are the agreements with higher commitments to market access compared to the commitments of the World Trade Organization and other FTAs inked earlier. Especially, the TPP and the Viet Nam-EU FTA are the comprehensive and balanced trade pacts featured with higher commitments on market access to trade in goods and services, investement, protection of intellectual property rights as well as commitments on market economy institution, State-owned enterprises, public procurement, etc in order to create a transparent business environment and equal competition. These agreements also cover trade related issues like environment and labor. The aforesaid contents make the TPP and the Viet Nam-EU FTA the new-generation FTAs.
The TPP is the comprehensive market access agreement, which ensures the free movement of goods, services, capital and technology at a higher level through fast elimination of import-export tariffs and non-tariff barriers to trade and investment; formation of equal and non-discriminatory business environment; facilitation of trade and investment, thereby bringing more benefits to businesses, laborers and consumers.
The TPP respects the political regime of each country; recognizes the requirement of full compliance of national laws in accordance with international commitments, and excludes contents related to national defense and security. The agreement is also expected to create a new foundation for economic integration in the region as well as opportunities for other countries on the Asia-Pacific belt to join.
II
The TPP along with the Viet Nam-EU FTA will bring back a lot of opportunities but challenges and difficulties are also numerous.
These agreements will add more impulses for socio-economic development, particularly in investment attraction and export acceleration with the world’s biggest economies, in which the 28-member EU has a combined GDP of US$18 trillion and the TPP currently comprising of 12 members has a combined GDP of more than US$20 trillion. These economies have source technologies and remain the major importers and the biggest investors of Viet Nam over the past consecutive years. Taking into account of the resonant effects of the two agreements and the FTAs under negotiations or have been signed, opportunities are greater as our country has established free trade relations with 55 countries, including 15 members of the G20.
Beside opportunities, these agreements also roll out huge challenges and difficulties, including fiecier competition among the TPP members as well as within each of the markets in all three levels: product, business and national levels – especially the competition in terms of the quality of institutions and business environment. In the face of competition pressure, some enterprises, after being transformed or restructured may be dissolved or go bankrupt if they fail to better themselves, and part of laborers will loose job; agriculture sector and farmers will be vulnerable; the poor-rich gap will be bigger if we can not effectively realize the strategy on fast and sustainable development and or can not ensure that all people benefit from the growth fruits. Challenges in terms of implementation are also huge, ranging from perfection of the legal system to workforce training, capacity building for cadres, technical and legal experts. The labor and union issues also generate new challenges and requirements for the operation of the Viet Nam General Confederation of Labor and the whole political system of our country.
III
To fully take advantage of opportunities and overcome challenges, improving the competitiveness of the whole economy becomes an urgent matter, in which, the role and actions of the stakeholders to perform this vital task need to be clarified.
Businesses are the subject that decides the micro competitiveness, reflecting the strength and the competitiveness of the economy. Businesses must be brave to accept competition and implement solutions proactively and creatively to unceaselessly sharpen the competitiveness of their goods and services, not just in domestic market but also in regional and global markets. However, businesses themselves can not decide all. They must perform in a defined institutional framework and business environment and this totally depends on the State.
The market decides the mobilization, allocation and effective use of resources. Businesses are free to decide the business lines that are not prohibited by law and must raise high their social responsibility and corporate culture. The society contributes constructive ideas, comments and supervises the implementation of policies via through citizens and organizations, professional associations, experts and independent researchers in order to mitigate shortcomings of the market and the State.
The TPP as well as the Viet Nam-EU FTA requires open and transparent operations of State-owned enterprises and their equal competition with enterprises of other economic sectors. It needs to beef up the process of restructuring, improving the effectiveness of State-owned enterprises along with encouraging the development of Vietnamese business circle, especially private ones, as the driving force for improving the competitiveness and self-reliance of the economy.
To ensure the success of international integration and effective implementation of the FTAs, especially the TPP and the Viet Nam-EU FTA, there must be resolutions of the Party and the National Assembly as well as the action plans of the Govenrment, sectors and the business community. Communication work needs to be carried out well to create awareness consensus and unity in action, strive to raise competitiveness for fast and sustainable development.
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We are living in the era of very fast movement and development where the world is entering the 4th industrial wave, thus the industrialization process becomes shorter. With great determination and strong will to better themselves, creativity spirit and proper growth strategies, countries with lower development levels can catch up with and surpass countries with higher level of development and new small-sized enterprises could become big ones quickly.
Joining these agreements opens more opportunities for Viet Nam to improve economic effectiveness thanks to the expansion of the scope and create favorable conditions for the establishment of big enterprises in association with individualization of businesses. This is also an opportunity to nuture the spirit of innovation and creativity, encourage business startup movement among all people and improve the development level of the economy.
The whole Party, people, army and business community should raise high the national pride and join hands and minds to proactively exploit and bring into full play opportunities, strive to overcome difficulties an challenges emerged in the integration process to strengthen the national aggregate power, firmly protect national independence, sovereignty, territorial integrity, strive to build Viet Nam into a strong country with wealthy people, democratic, just an civilized society, being able walk abreast with powers as President Ho Chi Minh ever wished.
