Virginia Foote: What’s the big vision for Vietnam in all Free Trade Agreements (FTAs)?
Tran Quoc Khanh: Vietnam is a member of ASEAN, so the country has access to a market of more than 600 million people without import tariffs. If we are able to enter big markets like Japan, China, Russia, the EU and the U.S without tax barriers, then the country will become an attractive destination for domestic investors as well as foreign ones.
After joining the World Trade Organization (WTO), we realized that FTAs can play a part in changing our management policies. When the country changes to become part of these FTAs, our economic climate will also change a lot.
They’re the two reasons why Vietnam decided to join the TPP and sign an FTA with the EU (EVFTA).
Foote: It seems to many of us who are working and doing business here that FTAs have been of benefit to Vietnam. Do you agree that’s the common perception as well?
Khanh: Our top leaders have considered the content of the TPP and seen that many requirements coincide with the targets Vietnam is aiming at.
Take the problem of state-owned enterprises, for example. All Vietnamese citizens and the government want these companies to be run in a more efficient and transparent way. That’s why we agreed to negotiate the specific requirements for state-owned companies under the TPP.
Our people also hope that the fight against corruption will come to an end. Local companies will no longer endure harassment from authorities. That’s why Vietnam agreed to talk about corruption in the TPP talks.
Vietnamese people want a more transparent public procurement process, so we agreed to talk about that as well.
Foote: I think in the U.S., Congress only wants to hear about U.S exports, they don’t want to hear about imports. Those of us who are investing here or who are in SMEs here, we’re interested in all the pieces of this puzzle. We’re interested in imports. We’re interested in exports. We’re interested in selling products to Vietnamese consumers. We are interested in manufacturing here. Would you comment on that?
Khanh: I assure you that the TPP will not only benefit Vietnam but also bring big opportunities for American exports.
When Vietnam negotiated its bilateral trade agreement with the U.S. from 1996-2000, Vietnam did not agree to bring the tax applied on imported beef, pork and poultry down to 0 percent as demanded by the U.S. When negotiating to join the WTO, despite pressure from the U.S., Vietnam also refused to remove import taxes on those meats as well as other important American products.
However, Vietnam has basically agreed to remove the import tax on American meat products, including beef and poultry, during the negotiations for the TPP, though it will be a long process.
This is a meaningful agreement between Vietnamese and American manufacturers. I hope that after the TPP comes into effect, both of us will benefit from the deal.
Foote: One other question about the role of the TPP that is somewhat new is the environment and labor commitments. What do you think about these issues?
Khanh: Vietnam is a responsible member of the international community and the International Labor Organization. We want to deliver a message through the TPP and the FTA signed with EU that, while aiming for economic development, Vietnam will not forget about the environmental issues and the protection of labor rights.
Secondly, we understand that if Vietnam’s products want to reach higher standards, manufacturers must think about the consumption tastes in the U.S. and EU. We all know that consumers in these big markets are very concerned with the environment as well as labor issues. The Vietnamese government’s decision to sign these trade deals will help the country’s businesses to access big markets.
Foote: We were talking about the value and supply chains. This should help Vietnam in the supply chain but also to work up the value chain to bring more value to Vietnamese exports.
Khanh: I think after 10 or 15 years, Vietnam will continue to develop its textile industry, but with less export turnover. Negotiating FTAs with big markets will create a special position for Vietnam as the country will be connected to every market in the world. I hope that Vietnam will become an important link in the regional and international supply chains through the presence of big corporations in Vietnam, which will help the country to connect to these chains.
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