Vietnamese seafood exports to benefit from Trans-Pacific Partnership
The Trans-Pacific Partnership is one of the most ambitious free trade agreements ever crafted and could create a new single market something like that of the E.U. When it comes to seafood, with nearly half of its exports going to Trans-Pacific Partnership (TPP) member nations, probable TPP member-state Vietnam is expected to be one of the biggest beneficiaries from the treaty.
In 2015, seafood exports to TPP countries were worth USD 3 billion (EUR 2.61 billion), or 46 percent of the country’s total, according to Trương Đình Hòe, general secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP). Hòe was speaking at a seminar entitled, “TPP – Opportunities and Challenges to Vietnam’s Import-Export Activities” in Ho Chi Minh City in mid-April, as reported by VietnamNet.
The United States and Japan were the two largest importers, with a total value of more than USD 2 billion (EUR 1.74 billion) last year, he said.
The TPP involves 12 countries: the U.S., Japan, Malaysia, Vietnam, Singapore, Brunei, Australia, New Zealand, Canada, Mexico, Chile and Peru. The treaty was signed on 4 February but has not yet been ratified by all 12 signatories. If and when that happens and the treaty goes into effect, Vietnamese seafood exporters will stand to benefit from the deal, said Hòe.
“It seeks to reduce or eliminate 90 percent of import taxes between the 12 countries, raising the country’s [Vietnam’s] competitiveness vis-à-vis other exporting nations,” Hòe said.
For instance, Japan, the second largest buyer of Vietnamese tuna after the U.S., has for a long time imposed higher taxes on Vietnamese products than those from other ASEAN (Association of South East Asian Nations) member countries.
Argentina, Ecuador and India, the other main exporters to Japan, do not have a free trade agreement with that country, said Hòe. The TPP would make Vietnamese shrimp more competitive in the U.S. than that from Argentina, Ecuador, India, Thailand, the Philippines or Indonesia, enabling Vietnam to significantly increase exports to that country, he added.
When the TPP comes into force, which is expected sometime later this year (there is has been a change of government in Vietnam, but it is expected that the new administration will follow up on the agreement and ratify it by the end of this year), export tariffs would be eliminated, creating an incentive for seafood firms to invest in their supply chain from farming to processing and export, bringing them higher economic value. Vietnamese processors, who face a raw materials shortage, also expect to import these materials at cheaper rates once the TPP takes effect.
But to enjoy the export tariff benefits, firms must meet the strict requirements related to origin of products, Hòe said.
“Besides, the seafood sector would face challenges as Vietnam integrates, including more trade barriers and anti-dumping and anti-subsidy lawsuits,” he said.
During the past decade, the seafood sector has developed to become one of Vietnam’s key industries. According to Hòe, the country is ranked third globally in seafood production after China and India, and fourth in seafood exports (after China, Norway and Thailand).
Vietnam has 612 seafood processing factories meeting national hygiene and food safety standards, including 461 that meet European Union market standards. Its seafood exports were worth USD 6.57 billion (EUR 5.72 billion) last year and are expected to top USD 7 billion (EUR 6.09 billion) this year, said Hòe.
However, the TPP is no sure thing. Opposition is growing in several countries, and nowhere more so than the U.S., where those against the agreement fear it could mean jobs moving from the U.S. to developing countries. They also do not like the fact that the five-year talks that crafted the treaty were held largely in secret.