Trans-Pacific trade deal close to sign-off
When the leaders of 12 nations involved in the Trans-Pacific Partnership (TPP) regional trade talks met on the sidelines of the Asia Pacific Economic Cooperation summit in Beijing late last year they released a statement saying the conclusion of the negotiations is near.
“With the end coming into focus, we have instructed our ministers and negotiators to make concluding this agreement a top priority.”
The Trans-Pacific Partnership will create one market of more than 792 million people. The countries involved are the United States, Vietnam, Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Canada.
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In order to best position themselves for the revolutionary changes that the TPP will bring to Vietnam, local businesses should be proactive and lay out a dynamic business strategy for penetrating foreign markets, said Dr. Vo Tri Thanh, deputy director of Central Institute for Economic Management (CIEM).
Dr. Thanh added that businesses will face stiff international competition in both the global and domestic markets for the goods and services they sell in terms of quality, timeliness and price – therefore it is important to devise a comprehensive plan to increase competitiveness in these three areas.
Opportunities and challenges
Those businesses that think competition is all about price and fail to address the quality and timeliness issues will quickly find themselves closing their doors or filing for bankruptcy protection. Another aspect that the strategy should encompass is compliance with technical regulations set by governments in foreign markets.
Moreover, both the business community and government should stand side by side in facing the challenges of integration brought about by the TPP. Dr. Thanh said adding that a coordinated effort of working together will allow for improved access to foreign markets.
Co-ordination to secure firm foothold in the global market
In 2015, apart from the establishment of the ASEAN Economic Community (AEC), Vietnam is expected to sign six free trade agreements – the TPP, Regional Comprehensive Economic Partnership (RCEP), Vietnam-EU, Vietnam-RoK, Vietnam-Custom Union of Russia, Belarus and Kazakhstan.
The AEC will create a market of 600 million consumers and Vietnam will enjoy export tariff reductions on substantially all of its exports to other member nations. However, to secure a firm foothold in the market, businesses, especially big enterprises should cooperate and strengthen connectivity.
However, leading economists have cautioned that both Vietnamese citizens and the business community in general do not have a clear and sufficient understanding of exactly what integration is and how it will affect them or the nation.
They estimate that as many as 60% to 65% of the business community do not fully comprehend ASEAN and are not adequately preparing, which creates a national dilemma as far too many businesses fail to appreciate the importance and impact of what is set to transpire later this year.
