Prime Minister Nguyen Tan Dung
The Trans-Pacific Partnership (TPP) was signed on February 4, 2016 by
12 countries -Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico,
New Zealand, Peru, Singapore, the US and Vietnam - representing 40% of
global GDP and 30% of global trade. This is a new-generation free trade
agreement (FTA) which is expected to become a model for regional and
international trade development with higher standards in the context of
fast production force development, and increasingly deep and wide
international integration.
Vietnam’s signing of the TPP was the outcome of the five-year
negotiations under the spirit of both co-operation and struggle, based
on the top objective of national interest. More importantly, this is the
fruit of the 30-year renovation process, in which economic integration
is a vital component which has been strongly asserted and clearly
interpreted in the resolutions of the Party. This is also experience
withdrawn from the country’s international integration realities
following the signing and implementation of the Vietnam-US bilateral
trade agreement; the participation in the ASEAN free trade area, FTAs
between ASEAN and its partners, the accession to the World Trade
Organisation, and others. Economic integration is also an important
aspect of the modern socialist-oriented market economy institutions that
are under construction.
I.
In pursuant of the orientation of proactive and active international
integration, the Politburo (tenures 10th and 11th) approved the
government’s proposal of joining talks on several new FTAs. These are
agreements with higher commitments to market access compared to the
commitments of the World Trade Organisation and other FTAs inked
earlier. The TPP and the Vietnam-EU FTA are comprehensive and balanced
trade pacts featuring higher commitments on market access to trade in
goods and services, investment, protection of intellectual property
rights as well as commitments on market economy institutions,
State-owned enterprises, public procurement, and others in order to
create a transparent business environment and equal competition. These
agreements also cover trade related issues like the environment and
labour. The aforementioned contents make the TPP and the Vietnam-EU FTA
new-generation FTAs.
The TPP is a comprehensive market access agreement, which ensures the
free movement of goods, services, capital and technology at a higher
level through fast elimination of import-export tariffs and non-tariff
barriers to trade and investment; formation of an equal and
non-discriminatory business environment; and facilitation of trade and
investment, thereby bringing more benefits to businesses, labourers and
consumers.
The TPP will speed up the formation of a new production network and
supply chain among 12 member countries; facilitate intra trade
development; improve economic effectiveness; accelerate growth; support
job generation; increase incomes and improve people’s living conditions;
contribute to handling challenges of the current economy; encourage
innovation, creativity and development of the digital economy; establish
competition policies and operation rules of State-owned enterprises;
and protect of the basic rights of labourers and environment. The
agreement also includes regulations to guarantee that member economies
with different development levels and enterprises of all sizes can gain
benefits; and helps small and medium-sized enterprises to overcome
challenges and make the best of opportunities for development. The TPP
also includes commitments on technical assistance, capacity building,
and flexibilities in terms of the implementation roadmap according to
the levels of development for signatories to satisfy commitments and
take full advantage of the benefits of the agreement. At the same time,
it includes regulations on implementation supervision mechanisms and
sanctions.
The TPP respects the political system of each country; recognizes the
requirement of full compliance of national laws in accordance with
international commitments, and excludes contents related to national
defence and security. The agreement is also expected to create a new
foundation for economic integration in the region as well as
opportunities for other countries on the Asia-Pacific belt to join.
Despite the low development level of the economy and numerous
difficulties, the decision to actively participate in the new-generation
FTAs, especially the TPP, with the spirit to accept competition,
surmount challenges, and grasp opportunities for fast and sustainable
development demonstrates the timely vision of our Party and State. This
is also evidence of the belief in the will, ability and power of the
Vietnamese people and nation.
II.
The TPP along with the Vietnam-EU FTA will bring a lot of opportunities along with numerous challenges and difficulties.
These agreements will add more force to socio-economic development,
particularly in investment attraction and export acceleration with the
world’s biggest economies. In comparison of size, the 28-member EU has a
combined GDP of US$18 trillion and the TPP, currently comprising 12
members, has a combined GDP of more than US$20 trillion. These economies
have source technologies and have been the major importers and the
biggest investors in Vietnam over the past years. Taking into account
the resonant effects of the two agreements and the FTAs still under
negotiation or already signed, opportunities are greater as our country
has established free trade relations with 55 countries, including 15
members of the G20.
Export and investment are of decisive importance to economic growth,
job creation, and improvement of living standards, especially
considering the average income per capita and domestic consumption are
low. The proportion of import/export between Vietnam and these markets
also makes the country’s overall trade relations more balanced. The
commitments of the agreements are the framework and standards which
contribute to the improvement of the modern market economy institution
and acceleration of restructuring and growth model transformation.
Joining these agreements is also a new step forward in the consistent
pursuit of the country’s foreign policy of independence, self-reliance,
diversification and multilateralization of relations, and to the
improvement of Vietnam’s position in the international arena, especially
as strategic competition is becoming increasingly fiercer in the
region.
Beside opportunities, these agreements also bring huge challenges and
difficulties, including fiercer competition among the TPP members as
well as within each of the markets in all three levels – product,
business and national– especially the competition in terms of the
quality of institutions and business environment. In the face of
competition, some enterprises, after being transformed or restructured
may be dissolved or go bankrupt if they fail to better themselves, and
some labourers will lose job; the agriculture sector and farmers will be
vulnerable; and income inequality will be more significant if we cannot
effectively realize the strategy on fast and sustainable development
and ensure that all people benefit from the growth. Challenges in terms
of implementation are also huge, ranging from improving the legal system
to workforce training, and capacity building for cadres, technical and
legal experts. Labour and union issues also present new challenges and
requirements for the operation of the Vietnam General Confederation of
Labour and the whole political system of our country.
It is important to be deeply aware that favourable opportunities cannot
transform themselves into economic power, interests and competitiveness
without the efforts and goal-oriented activities exerted by
stakeholders – the State, people, and enterprises. Difficulties and
challenges will not be minor, but the magnitude of their pressure
depends on response. If opportunities are fully taken, challenges can be
pushed back and new greater opportunities will come. If this is not
done, difficulties and challenges will dominate and we will lose things
we can’t recover. Opportunities generated from FTAs always go hand in
hand with challenges and challenges always contain opportunities – this
is dialectical development.
III.
Against the backdrop of globalisation and increasingly deep and wide
international integration, establishment of the ASEAN Economic
Community, participation in new FTAs, including the TPP and the
Vietnam-EU FTA, information technology and the Internet boom, the rising
proportion of cross-border transactions in global trade and service,
advancement of multimodal transport and logistics services and
flattening the boundary between domestic and foreign markets, the
classic nuances of the export-replacement or export-oriented
industrialisation models are fading. Many countries have shifted to
industrialization models based on competitiveness, exploited and
developed comparative advantages, conversed comparative advantages into
competition advantages, joined global production networks and value
chains while striving to control high value added steps of such value
chain.
To fully take advantage of opportunities and overcome challenges,
improving the competitiveness of the whole economy becomes an urgent
matter, in which, the role and actions of the stakeholders need to be
clarified.
Businesses determine the micro competitiveness, reflecting the strength
and the competitiveness of the economy. Businesses must be brave to
accept competition and implement solutions proactively and creatively to
ceaselessly sharpen the competitiveness of their goods and services,
not only in the domestic market but also in regional and global markets.
However, businesses themselves cannot decide all. They must perform in a
defined institutional framework and business environment and this
totally depends on the State.
Extensive research and real conditions of different countries show that
national governance institutions are the most decisive factor to the
macro-competitiveness and the development of the economy. Fast and
sustainable development or stagnation and lagging behind are mainly due
to the quality of institutions. Good institutions, law-governed State,
people’s right to democracy and compatibility with modern market economy
rules will stimulate the market to the fullest level and resources for
development. Thus, institutions play a decisive role in the
effectiveness and competitiveness of enterprises.
To have good institutions, it is necessary to precisely define the
relations between the State, market, businesses and society. The State
must perform its role as a development creator, especially in
stabilising the macro-economy; develop the system of laws, policies,
strategies and planning and apparatus organisation to create an open,
transparent business environment to ensure the right to business freedom
and equal competition; use its resources, policies and tools to develop
culture, pursue social equality and progress, ensure social security,
improve social welfare and living standards; protect the environment;
ensure the provision of essential services, develop socio-economic
infrastructure system, train the workforce, enhance national security
potential; and firmly maintain political security, social order and
safety.
The market decides the mobilization, allocation and effective use of
resources. Businesses are free to decide the business lines that are not
prohibited by law and must raise high their social responsibility and
corporate culture. Society contributes constructive ideas, comments and
supervises the implementation of policies through citizens and
organisations, professional associations, experts and independent
researchers in order to mitigate shortcomings of the market and the
State.
Based on understanding of the aforementioned relations, we need to
quickly improve institutions and the legal system to meet the
requirements of a modern market economy, international integration and
commitments to the FTAs, especially new-generation FTAs with the spirit
of comprehensive and synchronous innovation in both economic and
political dimensions; and exert all efforts in building and improving
the law-governed and law-abiding State of the people, by the people and
for the people. Citizens can do whatever the laws do not prohibit.
Cadres and civil servants can only do and must do things prescribed by
law.
Reforms should continue to ensure the compatibility and synchronicity
of laws, structural organisation and contingents of cadres and civil
servants. Overlapping organisation will cause a waste of resources and
hinder development. We must dare to accept innovation, overcome old ways
to perfect the system of leadership and administration, improve
national governance capacity to meet the requirements of national
construction and Fatherland protection in the new stage of development.
The improvement of the business environment needs to be part of the
requirement of institutional reform. Institutions create a framework and
limits for improvement of the business environment. The business
environment cannot be considered good without suitable institutions.
Advances in institutional reform must be translated into improvements of
the business environment. This does not only relate to the apparatus
organisation but also the quality of cadres and civil servants. There is
a need to focus on building a contingent of capable cadres and civil
servants who devote themselves to serving the people. Special attention
is needed in the training of legal staffs, and business administrators
meeting the requirements of international integration, competition and
development.
Only by reforming national governance institutions properly, can we
improve the quality, effectiveness of the process of restructuring and
growth model transformation, accelerate the application of science and
technology, raise productivity, and improve the competitiveness of
products, businesses and the whole economy. And only by properly
reforming institutions can we facilitate the accumulation and
concentration of land and the formation of large-scale production
regions and clean, high-value added agriculture with sustainable supply
to quickly raise global market share. Otherwise, opportunities from the
TPP, Vietnam-EU FTA and other new-generation FTAs will be lost.
The TPP as well as the Vietnam-EU FTA requires open and transparent
operations of State-owned enterprises and their equal competition with
enterprises of other economic sectors. The country needs to beef up the
process of restructuring, improving the effectiveness of State-owned
enterprises along with encouraging the development of Vietnamese
business circles, especially private ones, as the driving force for
improving the competitiveness and self-reliance of the economy.
To ensure the success of international integration and effective
implementation of the FTAs, especially the TPP and the Vietnam-EU FTA,
there must be resolutions of the Party and the National Assembly as well
as the action plans of the government, sectors and the business
community. Communication work needs to be carried out well to create
awareness, consensus and unity in action, and to strive to raise
competitiveness for fast and sustainable development.
*
* *
We are living in the era of rapid development as the world is entering
the 4th industrial wave, making the industrialization process shorter.
With great determination and a strong will to better themselves,
creativity and proper growth strategies, countries with lower
development levels can catch up with and surpass countries with higher
levels of development and new small-sized enterprises could become big
ones quickly.Joining these agreements opens more opportunities for
Vietnam to improve economic effectiveness and create favourable
conditions for the establishment of big enterprises in association with
individualization of businesses. This is also an opportunity to nurture
the spirit of innovation and creativity, encourage the business start-up
movement among all people and improve the development of the economy.
The whole Party, people, army and business community should raise high
the national pride and work together to proactively bring opportunities
into full play, and strive to overcome difficulties and challenges
emerging in the integration process to strengthen the nation.
Source: Nhandan.com