Speaking at the seminar themed “TPP negotiation updates - Requirements from apparel, leather shoe and agriculture” organized by Thoi bao Kinh te Sai Gon Online and WTO Center under the Vietnam Chamber of Commerce and Industry (VCCI), Diep Thanh Kiet, vice chairman of the Vietnam Leather and Footwear Association (Lefaso), said that enterprises should understand benefits and disadvantages brought about by TPP.

“It means that local enterprises should watch developments of TPP negotiations,” Kiet said.

Information the crucial factor

Luong Van Ly, head of trade and investment department of the law firm Viet Long Thang, said that enterprises should learn about results of each round of negotiations and anticipate the trend.

For instance, some sectors will see impacts from TPP quickly and vice versa but finally, TPP will influence all sectors.

Besides, environmental issues are no longer indirect factors for enterprises in making trading decisions. Given TPP, customers will base on environmental factors to decide whether they will buy goods from Vietnamese companies.

In addition, the ‘yarn forward’ rule of origin (ROO), which requires the TPP nation to use a TPP member-produced yarn in textiles to receive duty-free access, will become a big challenge to local enterprises when TPP is translated into reality.

However, businesses wondered how they could learn about TPP information while negotiations keep taking place. Some information is not reliable and TPP nations still keep it confidential.

Concerning the problem, Ly said that enterprises should go back to commitments to the World Trade Organization (WTO) and the U.S.-Vietnam Bilateral Trade Agreement (BTA). Basically, TPP must respect what has been committed to WTO and TPP rules will be equal to or higher than WTO.

If the State fails to act as an information provider for enterprises, VCCI should organize training courses and give enterprises information of what they will have to face in the future, Ly added.

Le Quang Hung, chairman of Garmex Saigon Company, said that a TPP forum should be organized to provide information for enterprises and create connection among them.

Meanwhile, some experts said that capability of businesses is the most important factor. When TPP begins effect, the business environment will turn transparent, forcing enterprises to improve their capability instead of using tricks to gain profits like before.

Government’s assistance needed

Besides enterprises’ effort, the State plays an important role in helping them enjoy benefits from TPP. For apparel and leather footwear, the two key export sectors of Vietnam, it is necessary to develop material and accessory supplies right in the country to enjoy TPP interests.

Kiet of Lefaso said that the TPP agreement must be ratified by national assemblies after negotiations finish. The process will take around one year and a half. As the U.S. will give Vietnam three years before application of the ‘yarn forward’ ROO, Vietnam will have several years to build up domestic material supplies.

Some enterprises said that it is too late for Vietnam to build material supplies while others said success depends on determination of the Government. For instance, the Government right now should assign the Ministry of Industry and Trade to build up apparel and footwear material clusters in a specific period instead of letting local authorities to decide the plan.

Source: SaigonTimes.