Industry and Trade Minister Vu Huy Hoang
Economic experts have high hopes for Vietnam's economy after agreement was reached on the Trans-Pacific Partnership deal by trade ministers from 12 countries on October 5.
Sudhir Shetty, chief economist for the East Asia and Pacific region at the World Bank said that under the TPP Vietnamese producers will face tough competition, but this will help boost production.
Shetty said Vietnam will have a chance to access some new markets and improve GDP.
"Vietnam's GDP can increase by 8-10 per cent by 2030," he said. "Some studies say that TPP may bring USD3.7 billion in GDP to Vietnam annually.
Industry and Trade Minister Vu Huy Hoang, said the TPP may bring certain challenges to some sectors but also create favourable conditions for many others to develop.
"The trade deal has eliminated excises on various products including garment and textiles, footware, and aqua products, which are key products in Vietnam's economy," Hoang said. "This will boost exports and create jobs for millions of Vietnamese workers."
Economist Le Dang Doanh said the TPP was a major achievement and a milestone for Vietnam's economy.
"Vietnam is the smallest economy in TPP, and we're now having great opportunities to grow stronger," Doanh said.
"We mostly export agricultural goods, garments and textiles, and footware to the US, while importing aircraft and software. We can boost our exports when excises on many products are lowered or eliminated," he said.
"More foreign investors will, in time, take advantages of the benefits that we have," Doanh said.
But he said local enterprises will face challenges under the TPP.
"Poor-quality products, sub-standard design and packing, and a bad working environment will be among the main problems for Vietnamese enterprises when competing with foreign partners,"
"It is important we improve business conditions for local enterprises to take full advantage of the deal."
Sugar, pharmaceuticals and animal-breeding are among sectors facing the most immediate challenges under the TPP due to high production costs.
Hoang Thanh Van, head of the Animal Breeding Department, told Kinh Te and Do Thi (The Economy and City Newspaper) that high prices, low quality and out-dated technologies are the main obstacles for the local animal breeding sector to compete in the world market.
"The Ministry of Agriculture and Rural Development has recently approved a project on restructuring the animal-breeding sector for sustainable development," Van said.
"The restructuring has helped the sector increase the quantity of animal herds and products," she said. "To take advantage of the TPP, I think the restructuring should be expanded. It should be adjusted to fit the specifications of different areas."
The World Bank has estimated Vietnam's garment and textile production will increase by 21 per cent and export growth to US market may reach a record 90 per cent by 2020.
Hoang said the 11 other countries in the TPP are all important partners of Vietnam, especially the US and Japan.
"As much as 40 per cent of our export value are from these 11 countries, and garment and textile, and footware products make up 31 per cent," he said. "Vietnam is the second and third largest garment and textile exporter to the US and Japan, respectively.
The TPP aims to overhaul trade and investment rules, and intellectual property rights, and improve labour standards for the 21st century, and was agreed to on October 5 by Australia, Brunei, Canada, Chile, Japan, Mexico, Malaysia, New Zealand, Peru, Singapore, the US and Vietnam. It took five years to negotiate and encompasses 40 per cent of the global economy.