Without TPP, the commercial position of Vietnam is still strong

Vietnam has young workforce with low wages and workmanship. Photo: N.Hiền

It is an assertion that was given in the report of Vietnam Economic Outlook 12-2016 with the topic “ Caution optimistic in commerce” announced by HSBC bank.

Accordingly, the export activities of Vietnam have lots of potential. Increasing costs lead to Vietnam becomes a formidable competitor as China is no longer the most attractive destination for investment. Furthermore, the geographical location of Vietnam has strategic importance for foreign enterprises that are operating in Southeast Asia. Thus, Vietnam has become the ideal export center in order to reach the market in ASEAN. Another advantage is that Vietnam has a large young workforce, with low wages and skillful.

Therefore, in Asia, Vietnam is one of the few countries still maintaining the positive export result in the context of low global demand.

The report of HSBC also pointed out that, currently, Vietnam is chasing a couple of different trade agreements in order to facilitate Vietnam to have many good opportunities to access the international markets. These agreements include EU free trade agreement that has recently negotiated and the other trade agreements through the Association of Southeast Asian Nations (ASEAN).

"Although the failure of the TPP is certainly an obstacle for Vietnam, Vietnam still hahs many potentials for growth" - the report indicated. Vietnam still has a highly competitive advantage and continues to benefit from China's move rapidly up the value chain, and can take more opportunities for valuable export goods in the lower cost goods to other countries that were hard to achieve previously.

Therefore, the commercial position of Vietnam temporarily remains relatively strong. However, it does not mean the Government has enough capacity to abandon the reforms, such as TPP requires extensive changes of behavior of State enterprises, labor, environment and intellectual property regulations. Consistently doing things even without TPP will help Vietnam's economy, has huge interests in the long term.

"The fact that the TPP could not be implemented is a loss, but that is exactly what Vietnam needs to overcome its competitive position based on its impressive economic perfromance" - ​​the experts of HSBC stressed.