Opportunities for agricultural exports when TPP comes into effect

(Baonghean) - TPP comes into effect, agriculture is the industry that benefits a lot and also faces fierce competition.

Production line of passion fruit juice for export of Nafoods Company. Photo from Internet

Our country's agricultural sector is generating about 20% of GDP and attracting over 55% of the country's workforce. Vietnam currently has dozens of key agricultural export products of world stature, of which pepper ranks first, rice, coffee, cassava ranks second, rubber ranks fourth, seafood ranks fifth, tea ranks seventh in the world and many other products.

In 2010, Vietnam had only 18 export markets with over 1 billion USD, but by 2016, it had increased to 28 markets. The total export turnover of goods from markets with over 1 billion USD accounted for nearly 90% of the country's total export turnover. In particular, there has been an improvement in the structure towards increasing the proportion of high-end finished products and applying high technology in the production and preservation of agricultural products for export.

When TPP comes into effect, agricultural, forestry and fishery exports will have more opportunities to improve due to increased market demand, improved product structure, expanded application of high technology, promotion of business linkages and investment in agriculture and more incentives from tax incentives according to the roadmap for implementing international integration commitments... Although there are still many difficulties, many products will increase exports such as: rice, cashew nuts, pepper, wood, cassava and vegetables and fruits. An advantage for the cashew industry is that most of the 11 TPP member countries have high demand for importing cashews from Vietnam. If following the commitment, when TPP comes into effect, the import tax on cashews to these markets will decrease from 2-5% to 0%, which will make Vietnamese cashews more competitive...

Market orientation when TPP comes into effect will be adjusted to focus more on the markets of TPP member countries and other FTAs, especially key markets such as the United States, European markets, ASEAN, Russia and Eastern European countries, China, Africa. The United States and the EU will be the leading markets for importing Vietnamese agricultural products (wood and wood products, cashew nuts, pepper, coffee and rattan and bamboo products, sedge mats, rubber, tea and vegetables...).

The attractiveness of these markets also means that Vietnam is under high competitive pressure to export to this market from China, Thailand, Indonesia - countries similar to Vietnam in terms of export products; in addition, there are technical barriers, especially in terms of quality, food safety for tea, vegetables, seafood, origin for wood and high anti-dumping tax on pangasius, requirements of the catfish inspection program...

In particular, the implementation of the AEC Economic Community in ASEAN is and will create conditions and challenges for goods from countries in the region to penetrate each other's markets, directly increasing competition in the export market in ASEAN and right in the domestic market.

Illustrative photo of tuna exports. Photo: VNA

In most major markets, pangasius exports will continue to face many difficulties due to slow consumption and import demand, no increase in selling prices, and stricter requirements on quality and food safety. According to the US Catfish Monitoring Program, from September 2017, if countries do not submit a list of exporting enterprises to the US and evidence of national food safety programs as required by the US Food Safety and Inspection Service, they will not be allowed to continue exporting.

To develop and export agriculture successfully, Vietnam needs to promote research on foreign markets, especially climate characteristics, market size, consumption characteristics and culture; improve the quality of exported goods to meet the standards and quality regulations of importing countries; promote trade promotion, build a smooth information network, connecting markets with Vietnam; improve the capacity to update and overcome technical barriers, information on the implementation of integration commitments in the agricultural sector of Vietnam with bilateral and multilateral partners.

In particular, it is necessary to invest in electricity, road and water infrastructure and encourage forms of cooperation, linking production organizations associated with processing, building, promoting brands and consuming products between producers, farms, cooperatives, cooperatives with enterprises in innovating the seed structure and applying advanced production processes, mechanization, automation, biotechnology, information technology to create products with high quality, productivity and added value, environmentally friendly, best meeting technical and commercial standards; proactively dealing with challenges from climate change; reducing dependence on inputs and outputs; Strengthening the application of scientific and technological achievements, especially in varieties, biotechnology, preservation technology, processing, information technology, linking production with processing and consumption, focusing on products that ensure food safety and hygiene, have quality, and high economic value, the main subjects are vegetables, flowers, fruits, livestock, aquaculture, etc., in line with the policy of restructuring agricultural production, the process of industrialization and modernization of agriculture and rural areas.

Dr. Nguyen Minh Phong