Vietnam is approaching the signing of a Trans-Pacific Partnership (TPP) agreement, which creates both opportunities and challenges for the country’s international integration process. Vietnam has just completed the 18th TPP agreement negotiation round in Malaysia. The country is set to join the 19th round in Brunei from August 24-30. Since November 2010, Vietnam has been involved in official TPP negotiations together with New Zealand, Brunei, Chile, Singapore, Australia, Peru, the US, Malaysia, Canada, and Mexico. The 18th round of negotiation in Malaysia has admitted one nation, Japan, which became the 12th member getting involved in TPP negotiations. Once reaching consensus in November and signing an agreement by the end of 2013, TPP will be established, becoming one of the world’s largest trade regions with a total population of 792 million that contribute nearly 40% to GDP and account for one third of the global trade value. Vietnam is enjoying many favourable conditions to take advantage of the TPP. The country’s participation in the agreement may help increase its GDP by 35.7% in 2025 and reap an export revenue of US$67.9 billion. The garment and footwear sector is expected to receive a boost in export growth from US$133 billion at present to US$165 by 2025, up 45.9% year on year. Tran Viet, head of the External Relations Department of the Vietnam Textile and Garment Association (Vinatas), said Vietnam’s participation in the TPP agreement would help the local garment sector achieve an export turnover of US$55 billion in 2015, generating jobs for nearly 6 million workers. Previously, experts had predicted that Vietnam might face hurdles in joining the TPP agreement. However, positive signs from the US – an initiator and full member of the agreement – showed that the negotiation process is accelerating. In particular, among negotiators the US is always considered the most demanding partner. Vietnamese State President Truong Tan Sang paid a visit to the US at the end of July. He met US President Barack Obama and the two sides also discussed issues related to the TPP agreement. President Obama said: “We are making efforts to complete the TPP agreement in 2013 as it can generate jobs and increase investment in the region, as well as in both countries.” The two leaders then released a joint statement affirming their strong determination to complete negotiations on the TPP agreement in a comprehensive and efficient manner in the earliest time this year. Vietnam is entering the final stage. Vietnam needs to be careful, taking into account opportunities and challenges posed by the TPP agreement, which does not provide any special mechanisms for economies with different development status. The country will face heavy pressure when it joins the agreement, especially when Vietnam still depends much on imported materials from non-TPP members like China and the South Korea. TPP will only offer lower tax rates for products using materials imported from its member countries. TPP is not an absolutely open market as it provides a common list for the opening of the service sector that Vietnam has not perfected. Requirements for employment are also strictly regulated in the TPP agreement. Those businesses that fail to meet these requirements will receive no preferential tax policies when they export their products to TPP member countries. Dr. Le Doang Doanh, former Head of the Central Institute for Economic Management (CIEM), said Vietnam would attract foreign investors thanks to benefits offered by the TPP agreement, such as an expanded export market, low tax rates and low-cost labour force. However, Professor Nguyen Mai, former Deputy Chairman of the State Committee for Cooperation and Investment (SCCI) (now the Ministry of Planning and Investment), voiced his concern over Vietnam’s more open market and its ability to balance export revenue, which was currently higher than GDP. Moreover, he said, Vietnam’s current investment disbursement of US$10-11 billion/year was suitable. Specialists worried about technical problems, the role of State-owned businesses, and organizations of workers. The TPP agreement requires the independent organization of workers which connects to other relevant agencies across the country to protect legitimate rights of employers. At present, Vietnam only has such an organization – the Vietnam General Confederation of Labour (VGCL) with its trade unions members nationwide. Above all challenges, the TPP agreement is considered a good playground for potential economies like Vietnam to boost the development of key sectors such as garments, footwear and farm produce. After joining the agreement, there will be a strong flow of imported goods and foreign direct investment (FDI) into Vietnam, thus providing the country with a fresh impetus for stronger growth. VOV