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TPP and impact on Viet Nam
Transcript of TPP and impact on Viet Nam
Tran bao khanh
Nguyen thi Hong Lan
Pham Bui diem hang
Bang Ngoc Xuan Quynh
Huynh Pham MiNH Thu
Tran Nguyen Phuong Uyen
Definition of TPP
Content of TPP
How TPP effect to large countries
Comparision to WTO
Impact on Viet Nam
Solution for VN enterprises
Impact on Vietnamese banks
Definition of TPP
the economies of
the Asia Pacific
Content of TPP
Trade in goods
Technical Barriers to Trade (TBT)
Textiles and Apparel
Temporary Entry for
Compare to WTO
80% of export tax
Several majors will be protected from competition among the goods of other countries
Up to now...
Now and then...
80 billion dollars
45% car components which is produced by 12 countries participating in TPP will be reduced tax
Washington accepted to repeal 2,5 % tax for over 80% car parts exported from Japan
export car 48% in Pacific area
car parts 40%
=> the more remarkable benefit Japan receive
According to Mr.Biswas - Political science professor Koichi Nakano of Sophia University in Tokyo:
"The industry will benefit by logistics, warehousing,distribution, tourism, food - beverages."
will have to compete with cheaper beef from allied nations 5 cows ( FNBA ) including New Zealand , Australia , Canada and the United States.
Japan agricultural production
Protection of intellectual property rights for pharmaceuticals decrease to 8 years instead of 12 years as the US wants
Farmers will be drastically cut taxes in areas such as beef , dairy products , wine , sugar , rice , vegetables and seafood in some markets.
The beef production will also be cut by 9 % tax.
The sugarcane growers will double the amount of sugar exported to the US market from 107,000 tons to 207,000 tons.
Solutions for VN enterprises
1. Competing capability
Competitiveness: the decisive factor in the " playground TPP ".
Important thing is improve the competitiveness of their enterprises to compete with foreign enterprises.
2. Changing straterging
VN businesses can not compete with foreign companies.
VN enterprises instead of direct confrontation on the major markets , the select niche markets, small markets with " blue ocean ".
3. Intellectual property and
4. Big organizations
TPP when executed will cause impacts , directly to the operation of businesses . Therefore , enterprises must speak , through the association or Chamber of Commerce and Industry of Vietnam for the benefit of their businesses , make recommendations to the Government to negotiate the conditions conducive to domestic enterprises
5. State-owned Enterprises
VN companies now need to move the business and market.
VN enterprises gradually reform the operation of their businesses to conform to the trend of the times.
“Agriculture” - The most vulnerable industry when VN joins TPP
Reduce tax rates but they will increase non-tariff barriers.
Technical barriers and food safety
VN’s products should pass through the technical barriers to trade and sanitary and phytosanitary measures for food safety.
VN is still limited in the copyright protection, labor issues and traceability.
VietNam needs to change.
Difficulties of livestock sector
The risk of intense competition
Among Vietnam, Australia and New Zealand
between the US and Vietnam.
LET'S ENJOY IT
Deeper integration will increase Vietnam’s export performance.
After the 2007-08 Global Financial Crisis broke out => VN should participate in TPP to improve export.
Having a greater inflow of foreign direct investment.
Using the TPP as a measure to balance against China’s economic influence.
- Vietnam may even emerge as the “biggest winner” among TPP member countries.
- Improve Vietnam’s position in the network by expanding its production base.
TRADE IN GOODS AND SERVICES
- The tariffs on Vietnamese garment products could be lowered to nearly zero from the current 17.5% => the Vietnamese textile and garment enterprises to increase their export market share
TEXTILE AND GARMENT
- Transporting, supplying and warehousing and will lead to the development of logistics services.
Vietnamese banking system has made innovation to meet the integration requirements.
Before participating in TPP
Foreign banks have medium and long term capital
Expand the market for credit institutions and reduce the paper work in operational management.
After participating in TPP
Participate in TPP is a huge opportunity for Vietnamese banks.The specific advantages for Vietnamese banks are :
Although having a lot of advantages, participate in TPP will also bring major challenges to Vietnamese finance – banking field.
All these challenges will increasingly be duplicated when Vietnam's banking system still remains inadequate. Firstly, access to banking services remains limited. Compared to some countries in the region and the world in general, the ability to access banking services in Vietnam are not high. This will increase the change to access to local clients for international banks and threaten the domestic banks.
For example, experts from the World Bank estimate that by 2030 the TPP would cumulatively add about 8% to Vietnam’s GDP.
-Vietnam’s GDP can grow at its fastest pace if the tariff barriers are removed.
For example, GDP could increase by $35.7 billion in 2025 if the domestic manufacturing sector overcomes technical barriers from others.
- Vietnam expand its exports by $68 billion within a decade.
- Greater access to major markets, especially the US and Japan.
- Raising Vietnam’s annual garment and footwear exports to $16.5 billion by 2025.
- Vietnam’s export revenues and GDP increase to $68 billion and $36 billion.
- Having the unanimity of the local enterprises and the great assistance of the US Association of Importers and Consumers.
- Textile exports from Vietnam to the US could grow by 13 percent to 20 percent per year in 2013-2017.
- Solving the unemployment problem.
- Approaching larger logistic market => boost up the consuming and the using of products and services.
- Making good use of geographical-political advantages in developing logistics infrastructures.
- Profit of enterprises in seaport and warehousing sector is predicted to be promising.
- Higher foreign capital in Vietnam will allow the banking systems to increase the liquidity and increase business opportunities.
- TPP will create prospects for Vietnam's commercial grow strongly, and more opportunities for Vietnam commercial banks’ provide services and capital for exporters in future.
- The finance – banking field will be expanded according to the agreement.
- With the participation of foreign banks, especially the financial institutions from the US, Japan and Australia, the pressure from the competition will be more intense.
- The competing strategy of foreign banks with strengths in products and services, technology and skill may cause local banks losing important segments in the financial market.
- The expanding room may help domestic banks could receive more capital from foreign investors but the risk of being acquired and governed would also increase.
A higher commitment and demand require to join in TPP
Vietnamese banks’ services are still monotonous.
The technology of our banking system is still behind from the world
Vietnamese banks are also short of medium and long term capital.
Vietnamese credit ranking, according to the international credit ranking organization, is much lower than other members in TPP.
Foreign banks’ retail strategy, the advantage of products and services diversity, especially electronic banking services, modern banking technologies, professional customer service skill.
Viet Nam ‘s law for foreign investment in general and for banking system is still hasn’t clear and has a lot of loophole.
Viet Nam is facing a brain drain.
Form a financial services council to keep track and solve conflict between Vietnamese banks and foreign banks.
Focus on internal restructuring, especially improving business management and risk management quality.
Vietnamese banks could merge with each other to become a strong bank.
Increase investment in people, related to issues such as recruitment, training, remuneration policies...
Increasing the strong competiveness between Vietnam and other countries, especially in agriculture – livestock sector.
TRADE IN GOODS AND SERVICES
The textile and garment industry of Vietnam largely depends on imported materials and accessories.
Labour supply for the industry may start drying up at some point => labour costs increase.
- differences in legal system, cargo clearance, and administrative procedures.
Limitations of the logistics sector in Vietnam:
- weak and non-synchronous infrastructure.
- higher logistic cost.
- small-sized enterprises operating unprofessionally.
- inadequate legal environment;
- lack of qualified human resources.
=> Local logistics enterprises mainly supply services to certain stages of supply chains and they will still be agencies for foreign ones.
Weak capital and facilities as warehouses, means of transportations, IT…
=> Vietnam logistics enterprises has been facing is losing the market share.
Foreign enterprises dominate Vietnam’s logistics market .
=> Vietnam will have to adjust, modify some provisions of the law on trade, investment, procurement, intellectual property, labor, environment...
LAWS AND POLICIES
To implement the commitments in the TPP
Rising the competitiveness dramatically
VIETNAMESE FIRM’S DIFFICULTIES
=> Some firms which still rely on subsidies from the State may fall into the difficult situation.
Increasing the possibility of unemployment in a part of labor.
With the TPP, importing tax will be 0%
=> Effect on revenue of Vietnam’s budget
TPP brings large benefits for multinational corporations
Impact on Vietnamese banks