Key export industries like textiles and garments, footwear, seafood, wood furniture and agricultural products are expected to benefit from the more liberal trade environment. — Photo VNA

HCM CITY (Biz Hub) — Companies in HCM City are devising new strategies and focusing on product research and development to prepare for the Trans-Pacific Partnership (TPP) trade agreement, which will take effect by 2017.

Because of lower tariffs in TPP-member countries, Vietnamese exports will have more competitive advantages.

Key export industries like textiles and garments, footwear, seafood, wood furniture and agricultural products are expected to benefit from the more liberal trade environment.

The TPP is expected to narrow Viet Nam's trade deficit and reduce dependence on larger markets in countries that are signatories to the TPP.

It will also help Viet Nam increase its GDP by an estimated US$23.5 billion by 2020 and $33.5 billion by 2025.

Foreign investment attraction, especially from developed nations like the US, Canada and Japan, will bring more modern technology and management expertise to the country.

And small- and medium-sized enterprises are expected to have more opportunities to join the global supply chain.

The TPP is also expected to create a more market-oriented economy and management.

Because of international pressure, state-owned companies will be expected to have more transparent governance.

Challenges

Viet Nam, however, is the least developed nation among TPP members, and as such, will face competitive pressure, particularly in agricultural products from the US, Australia and New Zealand.

Most agricultural producers in the city's price stabilisation programme are preparing for severe competition. They have expanded their distribution networks, conducted research on new high-quality products and developed and tailored products for Vietnamese consumers in different market segments.

All agricultural products are expected to be part of the city's Safe Food Supply Chain project, which requires safety, hygiene and traceability.

To support enterprises, central and local government authorities have organised programmes to promote locally made agricultural products.

This has allowed enterprises to borrow loans for technology; increase their product quality; develop distribution networks; create their own raw material areas; and promote closed production processes from farm to table.

Fifty enterprises in HCM City and other neighbouring provinces are part of the Safe Food Supply Chain with 100 kinds of products.

They produce 16,000 tonnes of fruits and vegetables, 8,600 tonnes of pork, 7,700 tonnes of chicken, 140 tonnes of tea, 36 tonnes of seafood and nearly 35 million eggs a year.

Many other enterprises are completing their investment and procedure to join the programme. Wholesale and retail enterprises like Co.op Mart and Satra, for example, are expanding and making their own products. — VNS