VN doesn’t fear disadvantages of TPP membership: Chief TPP negotiator Tran Quoc Khanh, head of the Vietnamese TPP (Trans-Pacific Partnership) negotiation delegation, who has just returned to Hanoi after the negotiation in Atlanta ended, talked with VietNamNet about the TPP milestones at the Noi Bai International Airport.    Mr. Tran Quoc Khanh (right) at the press conference in Hawaii on July 31, 2015. We heard on October 5 that TPP negotiations were still very tough. But TPP agreement was clinched in Atlanta after marathon talks. What made TPP members reach a consensus at the last minute? We met this time in Atlanta to deal with the problems left after the TPP Ministers’ July meeting in Hawaii. The Hawaii meeting could not settle the problems, because they were all very complicated ones. These included the issues relating to the rules of origin for automobile products and the intellectual property protection for pharmaceuticals. Besides, there were also divisive issues in the market opening for textile & garment, footwear and milk products. The Atlanta meeting focused on handling with existing problems. At first, the meeting was scheduled to last three days. However, on October 2, there was information that Mexico, Japan and the US could reach an agreement on automobile products. Therefore, we decided that the meeting would last two more days. On October 3, we received the news that the countries reached a consensus on automobiles. We then understood that TPP was very near and no one wanted to leave Atlanta without TPP.  On October 4, TPP members reached consensus on pharmaceutical patents. Ministers all decided to continue the negotiations and tried to finish the talks on market opening. On the last night, we finished the negotiations on textiles and garments with the US and Mexico. Later, at 3:30 am, we finished the negotiations with the US on intellectual property. At 4:30 am Atlanta time, the final bilateral talks between the US and Japan ended, and TPP negotiations wrapped up. I am delighted with the successful conclusion of negotiations of the Trans-Pacific Partnership (TPP) Agreement.  With this monumental achievement, the United States and Vietnam are poised to become partners in a trading block that represents nearly 40 percent of global GDP.  TPP is an ambitious, comprehensive, high standard and balanced trade agreement.  It represents another important step forward to strengthen the economic ties between our two countries and further deepen our bilateral relationship in this, its hallmark 20th year of normalized bilateral relations.   We look forward to working with our partners in Vietnam and the other TPP member countries to implement this historic agreement.  This agreement has the power to support jobs, create new opportunities, promote a fair global economic system, and transform the lives of hundreds of millions of individuals to ensure continued peace and stability in a fast changing world.  US Ambassador to Vietnam Ted Osius TPP sets very high requirements, while Vietnam is the poorest country among 12 TPP members. Will we meet many disadvantages in TPP? No problem. This is not the first time Vietnam has taken part in international economic integration. We began this 20 years ago, when we joined ASEAN. Later, in 2000, Vietnam signed the bilateral trade agreement with the US. In 2006, we joined WTO, and now we have signed TPP. We are confident about integrating more deeply into the world. Some analysts noted that Vietnamese businesses remain vague about economic integration, and that TPP is a ‘secret agreement’. How will we handle the problem? The details about negotiations could not be made public under the agreement among TPP countries. However, during the negotiations, we usually consulted business associations and involved parties, including the National Assembly’s committees. Therefore, we can say that the negotiation results reflect Vietnamese businesses’ willingness. Our task in the time to come is quickly checking the signed agreements and publicize the new agreement to people and the business community so that everyone can prepare for the TPP period. CIEM believes that it is institutional reform which must be the most important motivation. What do you think about TPP pressure on the issue? TPP sets up very high requirements on transparency, anti-corruption and creating favorable conditions for businesses’ operations. This will be hard pressure which will force state management agencies to change their viewpoints. Their management work must be based on people’s and enterprises’ benefits. Could you please talk about the role of the Vietnamese delegation in the negotiations and how Vietnam contributed to help end the TPP talks? A: We made great efforts together with the other TPP members to settle multilateral issues, and therefore, helped wrap up the talks. This was our great contribution to the agreement. Here I would like to emphasize the role of Minister of Industry and Trade Vu Huy Hoang.  In Atlanta, Hoang had a lot of meetings with some other trade ministers, including the Mexican minister and the US Ambassador Froman. At the meetings, Hoang and his counterparts discussed to reach agreements on basic principles. And we later negotiated on the basis of the principles. When will the TPP be officially signed? We hope TPP would be officially signed in December or early January 2016. TPP helps small, medium businesses: experts The Trans-Pacific Partnership deal (TPP) will offer more business opportunities for local small- and medium-sized enterprises (SMEs) though many challenges still remain, experts said. The TPP deal encourages SMEs to develop, economic expert Nguyen Minh Phong said. Diversification in the business sectors under the TPP will create large opportunities while seeking new markets at home and abroad for domestic enterprises, including SMEs, Phong said. These business sectors include information technology (IT), e-commerce and financial services that will be suitable for young people, especially those with sound ability in IT and e-commerce. Economic expert Huynh The Du said that it offers good opportunities for young people who have real ability in doing business and want to launch start-ups, Tuoi tre newspaper reported. Meanwhile, according to the Viet Nam Chamber of Commerce and Industry (VCCI), the local private economic sector represents 50 per cent of the national gross domestic product (GDP), but operational efficiency of the sector has not improved much, with 70 per cent of the enterprises running up losses. Of the around 500,000 existing private enterprises at home, 2 per cent are large scale enterprises, another 2 per cent are medium-sized, while the remaining 96 per cent are small-sized firms. Therefore, economist Bui Trinh said, in the eventuality of Viet Nam joining TPP, it needs to develop enterprises in the private economic sector to increase the internal power of the domestic economy. Nguyen Dinh Cung, director of the Central Institute for Economic Management, said that in theory, an economy cannot grow if the private economic sector does not develop. However, there are still many obstacles in the way of development of local private enterprises, Thoi bao Kinh doanh newspaper reported. To promote development of the private economic sector when Viet Nam joins the TPP, private enterprises, including SMEs, need for the State to remove obstacles, continue improving institutions, including an institution of market economy, Cung said. The state should also promote renovation of the economic growth model, restructuring of the local economy and improvement of the business environment. The state should soon issue a law on support for small- and medium-sized enterprises to solve their existing difficulties in investment and business activities, Cao Sy Kiem, chairman of the Viet Nam Small and Medium-sized Enterprise Association said. The Ministry of Planning and Investment has compiled the law and launched meetings to elicit opinions from business communities, associations, and ministries, apart from cities and provinces, he said. He hoped the law will offer support to SMEs in remaining and developing their business after the TPP come into effect, Dau tu newspaper reported.  Real estate pins hopes on TPP Real estate investors in Vietnam are placing much hope on a breakthrough in the market following the announcement that the TPP was signed on October 5. That there will be a turning point in terms of liquidity in the real estate market and in property distribution in Hanoi were common sentiments among investors when asked about the impact of the TPP. Similar to the Law on Housing allowing foreigners to purchase houses in Vietnam, the signing of the TPP is welcome news for real estate investors. If adopted, a number of procedures previously seen as barriers to foreign investment in Vietnam, including real estate investment, will become more straightforward. Vietnam will have to cut or remove many procedures as they relate to the eleven other partners in order to create favorable conditions for their businesses and citizens in the country. Compared with developed countries in the region, home prices in Vietnam are cheaper when measures against income levels in the other member countries. As foreigners are now able to purchase houses in the country, higher housing demand, including purchases for investment and perhaps even speculation, is forecast for the future. According to Ms. Vo Thi Diu Hien, Deputy General Director of the Saigon Thuong Tin Real Estate JSC (Sacomreal), the successful end to the TPP negotiations is expected to continue the opening up of opportunities in the real estate business in general and for Sacomreal in particular. “To seize the opportunities the TPP brings, especially FDI inflows into Vietnam, Sacomreal will launch more than ten large-scale projects in many different segments,” Ms. Hien said. For his part, Mr. Ta Phuc Hai, Director of the Hoang Vuong Real Estate Floor, said that the number of people registering to purchase apartments in the last two days has increased markedly. Not only residential but also the industrial real estate sector is also expected to increase sharply after the TPP comes into effect. According to the latest report from Cushman and Wakefield, more and more industrial occupiers will come to Vietnam to take advantage of the TPP alongside the other free trade agreements that Vietnam has secured. Therefore, demand for industrial property will continue to rise. “In addition, the demand for more roads, railways, seaports, and airports as the logistics market continues to grow will be a feature of the next decade and after in Vietnam,” the report stated. As the demand for any commodity increases the price will also increase. According to some experts, however, this rule may not necessarily hold true in Vietnam’s real estate market. According to Nguyen Manh Ha, Chairman of the Board at the Phu Quy Land Co., the completion of the TPP negotiations will certainly bring practical benefits to Vietnam’s real estate market, especially for homebuyers. Along with the increase in supply, cheaper input materials should result in prices being more in line with the wallets of buyers. Minister of Construction Trinh Dinh Dung has said that people will benefit from lower house prices in the future because more and more businesses now apply new technologies and use new materials, so costs and, therefore, prices will fall significantly. “Land prices in Vietnam are not overly expensive, and neither are house prices,” Minister Dung said. “It is certainly an attractive market for foreign customers, which will stimulate its development.” Businesses urged to raise competitiveness ahead of TPP opportunities Domestic manufacturing firms and exporters are expected to significantly benefit from the freshly-signed Trans-Pacific Partnership (TPP) Agreement, yet they still need to map out plans to enhance their competitiveness and increase the presence of Vietnamese goods in the global market.  Vice Chairman of the Vietnam Steel Association Nguyen Van Sua said the TPP is hoped to create numerous benefits for steel production enterprises, especially in export activities thanks to preferential tariffs.  Nevertheless, businesses should invest in upgrading technologies rather than simply relying on support policies and preferential tariffs to increase productivity, reduce production costs and ensure quality, he advised.  Promoting trade is essential to bring the steel sector to the new markets, he suggested.  President of the Vietnam Foundry and Metallurgy Science & Technology Association Pham Chi Cuong said the nearly zero-percent tariffs under the TPP will create favourable conditions for steel businesses to export their products to the 800-million-strong TPP market.  The conclusion of the TPP is expected to facilitate foreign investment in Vietnam and vice versa while enabling Vietnamese firms to gain access to major markets such as the US, Japan and Australia, he added.  Involvement in the TPP will put pressure on expanding the market and increasing the competitive edge for Vietnamese business players, experts said, warning that difficulties are unavoidable without careful preparations.  Tariff reductions could help increase the flow of goods imported from TPP countries with higher competitive prices.  Started out as P-4 by Chile, New Zealand, Singapore and Mexico, the TPP was joined by the US in September 2008 and Vietnam by early 2009.  The TPP brings together 12 countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam.  The completion of the historic, world’s largest free trade pact on October 5 in Atlanta, the US, has received a positive response from many countries around the world.  After the signing, the document must receive approval from member countries’ governments and parliaments before taking effect.  Once realised, the TPP will become a free trade region of 800-million people, accounting for 30 percent of global trade and about 40 percent of the world’s economy. Vietnam to benefit most among TPP members Vice President of the US Chamber of Commerce Tami Overby said Vietnam will benefit most among TPP member countries. Ms. Overby said the TPP will be a force for change in the world, particularly in its 12 member countries.  She said: “TPP will do for Vietnam, as it literally will transform your country overthe next several decades. And what that means is potential investors and American companies as well will look at the TPP countries, where the most opportunities are, and I think many of them are going to choose Vietnam.  And being a part of TPP will be like a stamp of approval or endorsement that  within,  operating  in  a  TPP country  means  put  more predictable rules, higher standards, and a greater certainty. Business loves to have predictability. That’s what TPP will bring.  I know that many of the companies I talk to, when we talk about “Which country are you most interested in?” they always start with Vietnam.  The economic modeling all shows that Vietnam’s economy will benefit the most.  TPP will  require some changes in Vietnam  but  there  will  be transition  periods or phases to give Vietnam  time and also capacity building to help Vietnam transform its economy.  So I have to say I am excited about all 12 countries but I’m particularly excited about Vietnam because of what it is going to do for your country: Is it going to raise the standard of living, raise the  standard of  your  rules  and make it  more predictable business environment? So I think it’s going to be especially good for the country of Vietnam.” VNS/VNA/VOV/VET Pham Huyen, VNN