Wokers produce steel at the Viet Duc Steel Co in the northern province of Vinh Phuc. — VNA/VNS Photo Huy Hung

HA NOI (Biz Hub) — Domestic businesses should be more closely associated with each other to take advantage of the Trans-Pacific Partnership agreement (TPP), Tran Quoc Khanh, deputy minister of Industry and Trade, said.

Khanh told the conference on TPP – Opportunities and Challenges for development of industrial sectors in Viet Nam held in Ha Noi on Tuesday that all economic sectors would be competing equally while participating into the trade pact. However, small scale businesses could be removed, creating conditions for the restructuring of production sectors.

"Local enterprises should be active in seeking information relating to trade pacts while improving their human resources," he said.

The deputy minister urged firms to closely follow the road map and regulations on the market open in the TPP to build their own production plans as well as improving competitiveness in joining supply chain in the region.

Sharing the ideas, Nguyen Van Sua, vice chairman of Viet Nam Steel Association said the number of small scale businesses in terms of financial resources, technology and management skill in several industries was big.

Businesses should improve their product quality while connecting with each other to compete with foreign firms in a big market with strict regulations on origin and quality.

"Management agencies should support firms in trade defence and provide them information to access the market," Sua added.

The ministry's Heavy Industry Department also urged close co-ordination between State agencies and businesses to expand operation and export and minimise adverse impacts of market opening.

State agencies need to assess the TPP's possible impacts on local goods, investment and services areas so as to fine-tune policies designed for TPP-benefiting industries.

Meanwhile, companies should also acquire an in-depth knowledge of free trade agreements to grasp opportunities, the department added.

Vo Tri Thanh, former director of the Central Institute for Economics Management (CIEM) said Vietnamese enterprises should co-operate with multinational groups to join the global production chain.

Thanh forecast that the country's advantage of cheap labour cost may not exist in the next 15 to 20 years due to the rapid development of automation.

Viet Nam would not find it easy to take advantage of the TPP if the knowledge of Vietnamese businesses about the pact is still limited, and when they lack a support mechanism, he added.

He said local firms should pass the barriers of technical standards and hygienic safety regulations.

In addition, the government should have policies for the development of the exporter. Viet Nam has seen a shortage of immediate companies which have adequate information and professionals to bring Vietnamese goods to the foreign markets.

Businesses were also urged to increase the localisation rate to enjoy preferential in TPP. — VNS