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US leaves TPP, will export slow down?

​For many years, the US is the largest export market of Dong Nai with the turnover of over $ 4.2 billion / year, accounting for 30% of total export turnover of the province. Therefore, that the US refuses to participate in the Trans Partnership Agreement (TPP), making many businesses stop hoping to expand exports to this market.


 

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 Footwear production at Rubber footwear joint stock company (Bien Hoa city)
 
According to the Department of Industry and Trade, Dong Nai’s major items exported to the US include: footwear, textiles and wood products. These are also three key export items of the province. Therefore, many Dong Nai enterprises expect that if TPP is signed, tax will be 0%, exports to this market will increase and the competitiveness is better.
 
No significant impact
 In fact, TPP is in just at negotiation stage, which means it has not been officially signed yet, enterprises do not have to suffer any direct disadvantage with the orders that are exported to the US market. However, that the US does not participate in the TPP also slightly shocks many enterprises of Dong Nai, because they have already had plans to expand production and increase exports to the US market as well as member countries of the TPP.
 Ms. Nguyen Thi Yen Linh, Head of Import-Export Department of Lovetex Industrial Vietnam Co., Ltd (Amata Industrial Park, Bien Hoa City), said: "The company specializes in producing garment accessories and 70% of our products are exported to other countries. The United States is one of the biggest markets of the company; if the United States joined the TPP, the company could increase exports to this market and other member countries of the TPP. However, that the TPP is discontinued because the US has refused to join has no significant impact on the company." According to Ms. Linh, without TPP, the company still receives export orders from enterprises in this market. However, if the TPP is signed, tax will be reduced to 0%, the cost of products will be lower, which helps to increase the competitiveness with same type of goods from other countries in ASEAN and China…
 According to Mr. Tran Duc Dan, Director of Rubber Footwear Joint Stock Company (Hoa An Commune, Bien Hoa City), once the US left TPP, companies will lose the opportunity to increase exports to this market. But Vietnam has signed Free Trade Agreements with many countries in the world, so businesses can change their plans to increase export to other potential markets that have not been fully exploited. "More than 10 free trade agreements have been signed by our country, so the opportunities have been opened up to big enterprises. Therefore, that the TPP does not bring about the expected results, as well as that the enterprises will not be able to enjoy its benefits will not greatly affect us", Mr. Dan said.
 
Concerns over obstacles still arise
 When The US withdrew from the TPP, what businesses are most worried about is the new president will change some policies by increasing or adjusting the technical barriers toward imported goods. Economic experts said that if the US increases the rigor of technical barriers, many international enterprises are more adaptable than Vietnamese enterprises. Therefore, in the coming time, if the US builds technical barriers to a number of Vietnam's commodities which have large export turnover to the US market, it is likely that Vietnam's exports to this country will decrease, as Vietnamese enterprises will struggle to adjust.
 Director of Industry and Trade Department Duong Minh Dung affirmed: "Dong Nai's exports in Quarter III and IV of 2017 may slow down. The reason is that many of the key products of the province are competing fiercely with the same categories of ASEAN member countries, China and India. Input materials for many items increase but output does not increase, many enterprises find difficulties in expanding production”. Mr. Dung further emphasized that the US will have more technical barriers to imports, which is the biggest difficulty for enterprises. Thus, the goods exported to this market may be stopped by these barriers, Dong Nai enterprises need time to adapt accordingly.
 "The problem that exporting enterprises are concerned about the most is that the technical barriers are adjusted more strictly. This adjustment can be related to the production process and the origin of goods, which causes enterprises to change import orders for raw materials and other processes, "- said Nguyen Thanh Phuong, Head of Foreign Relations of Changshin Vietnam Co., Ltd. (Thanh Phu Industrial Zone, Vinh Cuu District), said.
 
Hương Giang
 

 

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