TPP to make Vietnam attractive agriculture market for US, Canada: data
TPP to make Vietnam attractive agriculture market for US, Canada: data
Vietnam is expected to eliminate the tariffs on many agricultural products for the partner countries of the Trans-Pacific Partnership (TPP) pact in the next few years, but it is unclear if relevant domestic sectors are ready for such a major change.
Several TPP countries have announced fact sheets on how their agriculture industries will benefit from the ambitious trade pact, which was reached by 12 countries in the U.S. on October 7.
Countries like Canada and the U.S. are optimistic that their agriculture exporters can be boosted through the high potential of Vietnam.
The TPP deal, which aims to liberalize commerce in 40 percent of the world's economy, was reached following five years of negotiations between 12 countries, including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the U.S. and Vietnam.
The accord still needs to be ratified by lawmakers in the participating nations.
Tax breaks bring new opportunities
The U.S. Department of Agriculture (USDA) said the trade accord will “provide significant new market opportunities” for U.S. exporters to promote economic growth in the Asia-Pacific region.
The TPP also “provides specific new market access commitments for U.S. agricultural exports to Japan, Malaysia, Vietnam, New Zealand, and Brunei,” the department said in a report.
Under the TPP agreement, all of Vietnam’s tariffs on beef and beef products, currently as high as 34 percent, will be removed in three to eight years, according to the USDA.
The U.S. exported $22.1 million of beef and beef products to Vietnam in 2014, and the coming tax elimination will increase its meat shipments to the Southeast Asian country.
Vietnam also provides significant potential for U.S. pork exporters, who shipped $2.2 million worth of pork and pork products to the country last year, as it will slash the pork tariffs, currently as high as 30 percent, in five to ten years, according to the USDA.
The Southeast Asian country will eliminate tariffs on imports of cheese, milk powder, and whey from the U.S. immediately after its legislature ratifies the TPP.
All of Vietnam’s taxes on other dairy products, currently as high as 20 percent, will also be slashed to zero within five years.
In 2014, the United States exported $264 million of dairy products to Vietnam, more than five times the value a decade ago, according to the USDA.
The duties on U.S. poultry, currently up to 40 percent, will also be eliminated in 13 years, the department said.
As for Canada, the Canadian Department of Foreign Affairs, Trade and Development (DFATD) is also upbeat that its agriculture will find opportunity in Vietnam thanks to the TPP.
The Southeast Asian country will immediately erase 31 percent of tariff lines for Canadian imports after the TPP takes effect, and will zero the other 67 percent within 15 years, the department said in a report.
Vietnam will eliminate the current 31 percent tariff on fresh and frozen beef imports from Canada two years after the TPP takes effect, according to the DFATD.
The country will also reduce the tariffs on pork products, currently as high as 27 percent, to zero within nine years since the effective date of the trade accord.
There's still time for preparation
Vietnamese agriculture experts said the country still has time to prepare for the coming flood of imported products.
Vietnam would possibly not ratify the TPP until 2018, and it will take three to 13 years from that point for all of the tariff eliminations to be implemented.
“But what matters is whether Vietnam bothers to make preparations,” Van Duc Muoi, general director of Vissan, a leading meat processor, told Tuoi Tre (Youth) newspaper.
“Eight or 13 years is meaningless if Vietnam is not determined to make a change.”
Muoi added Vietnam did have strategies to support its agriculture sector when joining the World Trade Organization in 2007.
“But our competitiveness is still weak because these plans were not properly carried out,” Muoi said.
Vietnam is expected to announce the full content of the TPP and what it has committed to other participating countries on Monday, November 2, according to the Ministry of Industry and Trade.
