A workshop recently took place in Da Nang to discuss the impact of the recently-signed Trans-Pacific Partnership (TPP) agreement on FDI attraction and trade development in Vietnamese localities and their businesses.

Economic experts from the American Chamber of Commerce (AmCham) Viet Nam suggested that localities nationwide should accelerate their administrative reforms and improve the quality of their public administration services.  As for domestic businesses, they should gain a thorough grasp of TPP in order to make full use of the benefits of the biggest trade deal in a generation.

Workers at a local textiles and garments company

According to municipal People’s Committee Vice Chairman Phung Tan Viet, although Da Nang plays a vital role in accelerating the progress of the whole central region, the quality of production and export activities at local businesses has still been modest.  He remarked that TPP is expected to bring both opportunities and challenges for Vietnamese businesses in general, and those from Da Nang in particular.  The city leader also vowed that the city authorities would create the most favourable conditions for local businesses to access information about the international signed agreement and issue additional incentives for attracting more FDI inflow into the city.

So far, over 80% of Vietnamese businesses have yet to become fully aware of the opportunities and challenges which will arise when the agreement comes into effect in the near future.  Therefore, Ms Le Thi Nam Phuong from the city’s Young Enterprises’ Association stressed the need for the central government to open more information channels to further publicise the articles of the agreement.  Meanwhile, local relevant economic organisations should become more actively involved in helping local businesses to train high-quality human resources and provide them with legal consultancy services.

The exemption on tariffs for some export commodities is among the many opportunities for Viet Nam which will come from TPP.  The agreement will also increase Viet Nam’s exports from the expected 'baseline' in 2025 of 239 billion USD to about 307 billion USD.  By 2050, Viet Nam’s GDP may also be 10.5% higher than it would be without TPP.  In particular, TPP will offer the opportunity for Da Nang to increase the value of its key export items, attract more FDI inflow, and boost the development of local logistics services.

Most notably, the export turnover generated by FDI companies operating in Viet Nam now accounts for over 70% of the country’s total exports.  Therefore, the Executive Director of AmCham Viet Nam, Mr Herb Cochran, proposed that Vietnamese businesses should make more effort to become international-standard suppliers of goods to the USA, and to the world as a whole.

The Head of AmCham Viet Nam’s Customs and Trade Facilitation Working Group, Mr Nestor Scherbey, suggested that the city should improve its trade infrastructure with a focus on simplifying import and export procedures.  The city should also ask permission from the central government to establish a free trade area under the supervision of the regional custom forces.  The zone would play a vital role in boosting local production activities as tariffs for many import commodities, including raw materials, machinery and industrial spare parts, will be exempt.

Other participating experts also remarked that importance should be attached to encouraging local businesses to get involved in such highly competitive aspects as travel services, banking and finance, health, education and hi-tech.