Expected reform in anticipation of TPP deal hinh anh 1A factory of the Thai Nguyen Iron and Steel Joint Stock Corporation (Photo: VNA)

Economists have called for improving the business climate, fine-tuning market economy regulations and increasing dialogues with businesses in anticipation of the Trans-Pacific Partnership (TPP) reached by 12 member states on October 5.

The TPP is expected to lift Vietnam’s exports and gross domestic product to 68 billion USD and 36 billion USD by 2025, respectively, or 28.4 percent and 10.5 percent, said Deputy Director of the Central Institute for Economic Management (CIEM) Vo Tri Thanh.

However, he also warned of lessons drawn from Vietnam’s entry into the World Trade Organisation eight years ago, saying that opportunities could become challenges in the absence of appropriate policy and reform.

Economist Can Van Luc said Vietnam is forecast to be the TPP’s biggest beneficiary, because the deal will enable the country to navigate previously inaccessible markets and its trade openness index is the highest among the 12 member countries.

The World Bank predicted that the Vietnamese economy is likely to expand by 6 percent this year and 6.6 percent following the TPP entry, Luc said, adding that foreign languages and legal regulations are among possible hindrances.

CIEM Director Nguyen Dinh Cung said that as a new-generation deal, the TPP includes chapters on global trade, intellectual property, investment and State-owned enterprises.

Once the deal comes into full effect, it will be easier for Vietnam to export its products, thanks to reduced tariffs and barriers. In reply, the country will also open its door to more foreign investors, which requires improved transparency in the goals, finances and governance of State-owned enterprises.

To make the best of the opportunities brought about by the TPP, Vietnam should change State management mindsets and help firms meet global standards, he said, urging domestic enterprises to adopt technological advances and update the manufacturing process.

Nguyen Duc Thanh, Director of the Vietnam Institute for Economic and Policy Research, said sectors with weak competitiveness, particularly animal breeding, forestry, wooden furniture, mining and industry will be hurt. Therefore, these sectors need restructuring to raise their productivity.

Vietnam should provide legal assistance for sectors with comparative advantages, including garments, fisheries and farm produce, which have been urged to take control of their workforce, land and other resources, he added.

The State should devise appropriate policies to stimulate production and consumption, Thanh said. He stressed the need to conduct institutional reforms and increase trade liberalisation in terms of labour, capital and land.

Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry, said the business community needs to thoroughly grasp the impacts of global integration on its development. Each company should map out an action plan detailing market orientations, partners, manufacturing and governance overhaul, social responsibility and changes to business culture.-VNA