HANOI – When in place the Trans-Pacific Partnership (TPP) trade pact will help Vietnam save around US$1.1 billion from U.S. tariffs a year, said Luong Hoang Thai, head of the Multilateral Trade Policy Department under the Ministry of Industry and Trade.

Last year Vietnam completed negotiations over four key free trade agreements (FTAs), Thai said at a review conference of the ministry in Hanoi last week, which was attended by Prime Minister Nguyen Tan Dung.

Thai, a member of Vietnam’s negotiating teams, said the country could save only US$845 million in U.S. tariff cuts on Vietnamese export goods in the final stage of TPP negotiations. However, the Prime Minister ordered the negotiating team to seek more tariff incentives.

Ultimately, the U.S. pledged to offer tariff incentives totaling US$1.1 billion for Vietnam, compared to US$1.7 billion in export tariffs imposed by the U.S. on Vietnamese goods a year.   

Prime Minister Nguyen Tan Dung said at the conference that the U.S. tariff reductions of US$1.1 billion are huge compared to revenue from Vietnam’s shipments to America. The sum could help create jobs for 200,000 people, he noted.

He said the high-standard TPP agreement has been sent to the Politburo and is expected to be signed on February 4.

According to the Ministry of Industry and Trade, 2015 was a successful year for Vietnam in terms of international integration. Despite many complicated developments worldwide, Vietnam was relentlessly trying to integrate into the global economy to fuel growth.

With negotiations completed over four FTAs, namely Vietnam-South Korea, Vietnam-European Union, Vietnam-Eurasian Economic Union and the TPP, Vietnam can boost exports to member states of these deals that account for 65% of global gross domestic product (GDP).

Thai of the Industry and Trade Ministry said these four FTAs would allow goods that make up more than 70% of Vietnam’s export turnover to enjoy tariff exemptions.

The ministry emphasized that Vietnam is the first nation to sign an FTA with the Eurasian Economic Union and the second ASEAN country after Singapore to enter into FTAs with both the U.S. and the EU.

However, Thai noted, to make the most of the FTAs, Vietnam must improve policies and create favorable conditions for domestic businesses to expand production.

The Prime Minister said Vietnam’s economy is now opened up to more nations, so technical barriers should be weighed in line with the nation’s commitments to those FTAs to protect domestic firms.

Source: SaigonTimes