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TPP offers driving force to restructure Vietnam’s agriculture
28 | 07 | 2014
Vietnam’s negotiations to join the Trans-Pacific Partnership are entering the final stages. Participating in this deal will create many opportunities for Vietnamese agriculture.

 

Economists say if Vietnam joins the Trans-Pacific Partnership, the value of its agricultural exports will double. Vietnam is currently one of the 15 biggest exporters of farm produce to the US. Its exports include coffee, cashew nuts, pepper, rice, and tea. Japan, one of the TPP negotiators, is Vietnam’s third biggest importer. Major imports include coffee, fruits and vegetables. Australia and Mexico are two other TPP big export markets of Vietnam. 
 
Doctor Dang Kim Son, Director of the Institute of Policy and Strategy for Agriculture and Rural Development, says that in order to grasp TPP opportunities, Vietnam’s agriculture sector needs to radically restructure to give its products a solid foothold in the global market. 
 
The sector needs breakthroughs in management and agricultural investment, and a strategy for each export item. Doctor Son proposes: “The best way to support the agricultural sector is to shift the resources of disadvantageous areas to advantageous ones. In addition, we should determine which products are least competitive in the region and the world and replace them with products which are more competitive.”
 
Comparing Vietnam’s competitiveness with other TPP negotiators shows that Vietnam has advantages in seafood, coffee, and rice. But after joining the TPP, it will face challenges. For example, Vietnam will have to open its domestic markets and remove all import tariffs imposed on agricultural produce. Highly-competitive foreign agricultural produce will flood the domestic market - cotton, cooking oil, cattle-feed, fruits and vegetables. According to economist Truong Dinh Tuyen, Vietnamese agriculture must restructure to improve its competitiveness. Tuyen comments: “Vietnam will suffer serious competition from agricultural powers like the US and Denmark. When Vietnam joins the tariff on pork will be reduced to 0%. This means pork products will overwhelm local markets through the system of supermarkets and cold storage, thus pressuring domestic husbandry. We should start right now to restructure agricultural production by applying science and technology to create breakthroughs.”
 
Vietnam has many advantages in farm exports but some disadvantages in cattle-breeding. Under the TPP, Vietnam will only import products in which it doesn’t have an advantage and the growth of these imports will create growth opportunities for Vietnam’s agriculture
 
 
 


Source: Son Lam
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