TPP agreement to have substantial impact on Vietnamese economy hinh anh 1Tra fish processing for exports. (Source: VNA)

Can Tho (VNA) - The Trans-Pacific Partnership (TPP) agreement, which is awaiting ratification by 12 member countries, will have a substantial impact on the Vietnamese economy once it is implemented, according to economic experts.

They said the TPP deal would have a large amount of influence on the export sector, gross domestic product (GDP), the business environment and the labour market.

Vo Tri Thanh, deputy head of the Central Institute for Economic Management (CIEM), said joining the TPP deal would increase Vietnam’s exports and GDP by 68 billion USD and 36 billion USD, or 28.4 percent and 10.5 percent, respectively, by 2025.

There are three reasons for those increases. First, Vietnam have many big trade partners in the TTP such as the US, Japan and Australia, which have already imported a huge amount of Vietnam’s main commodities, such as garment, shoes, wood products and agro-products. These countries will still have more room for Vietnamese goods when taxes are reduced to zero.

The second reason is the increase in foreign direct investment inflows into Vietnam, which will benefit Vietnam in terms of technology and managerial skills.

Third, joining the TPP deal will force Vietnam to implement commitments that would create a more transparent, appealing, competitive business environment, laying the foundation for more effective distribution of resources.

According to Herb Cochran, general director of AmCham in HCM City, Vietnamese businesses would become partners and quality suppliers for multinational corporations from the US and other countries.

According to Associate Professor Nguyen Anh Tuan, chief editor of the International Research Review at the Diplomatic Academy under the Ministry of Foreign Affairs, although the requirements in the TPP deal are higher than those of the World Trade Organisation (WTO), the TPP will not replace the WTO. It will only complement and promote multilateral trade systems.

Joining the TPP would help Vietnamese consumers, who will have more opportunities to buy imported goods at cheaper prices due to the reduction or removal of tariffs, Tuan said.

From experience gained from joining the WTO after nine years, experts emphasised that TPP opportunities could become challenges if the Government does not have suitable policies and make necessary reforms. Industries currently enjoying protection and enterprises with low competition capacity will be affected the most.-VNA