Vietnamesse premier underlines importance of institutions in TPP
The TPP accord, whose members include Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the U.S. and Vietnam, was signed on February 4 in Auckland, New Zealand, after its five-year negotiations were concluded in October 2015 in Atlanta.
In his piece, Prime Minister Dung discussed the opportunities, challenges and actions needed for the trade pact, which represents 40 percent of global GDP and 30 percent of global trade.
“[TPP] is a new-generation free trade agreement which is expected to become a model for regional and international trade development, with higher standards in the context of fast production force development and increasingly deep and wide international integration,” reads an English version of the Vietnamese article published on the government’s website on Monday.
The premier said Vietnam’s signing of the TPP was not merely the outcome of the five-year long negotiations under the spirit of cooperation, with national interests the prime objective, but also “the fruit of a 30-year renovation drive, in which economic integration has been a vital component, strongly asserted and clearly interpreted in the resolutions of the Party.”
PM Dung also explained how important the TPP is to Vietnam’s economic growth, saying it is a comprehensive market access agreement that ensures the free movement of goods, services, capital and technology at a higher level.
The TPP will also speed up the formation of a new production network and supply chain among the 12 member countries, facilitating intra trade development, improving economic effectiveness, accelerating growth, supporting job generation, increasing incomes and improving people’s living conditions, according to the premier.
The trade accord will bring in many opportunities, such as more impulses for socio-economic development, improvement of the modern market economy institution and the acceleration of restructuring and growth model transformation.
However, there are also numerous difficulties, for example competition among the TPP members as well as within each of the markets will become fiercer, while the Vietnamese agriculture sector and farmers will remain vulnerable, with the potential for the poor-rich gap to broaden.
Decisive role of institutions
Prime Minister Dung dedicated a considerable part of his writing to talking about national governance institutions, which he said are “the most decisive factor to macro-competitiveness and economic development.”
“Fast and sustainable development vs. stagnation and lagging behind – what we will achieve relies mainly on the quality of institutions,” he said in the piece.
PM Dung said good institutions and a law-governed state, where people’s right to democracy is ensured and which is on a par with modern market economy rules, will stimulate and strengthen all resources for development to the fullest level, proving the decisive role of institutions in the effectiveness and competitiveness of enterprises.
To have good institutions, the prime minister underscored, it is a must to precisely define the relations between the state, market, businesses and society.
The state must perform well in its role as a development creator, especially in stabilizing the macro-economy and developing the system of laws and policies to create an open, transparent business environment and ensure the right to business freedom and equal competition, he elaborated.
The government should also ensure social security, improve social welfare and living standards, as well as enhancing the national security potential while firmly maintaining political security, social order and safety.
In the meantime, businesses should raise their social responsibility and corporate culture to a higher level, while society in general should contribute constructive ideas and supervise the implementation of policies in order to mitigate shortcomings of the market and of the state, he added.
“We need to quickly improve institutions and the legal system to meet the requirements of a modern market economy, international integration and commitments to the FTAs,” he wrote.
PM Dung also maitained that the improvement of the business environment needs to be part of institutional reform.
“The business environment cannot be considered good without suitable institutions, and advances in institutional reform must be translated into improvements to the business environment,” he said.
“Only by reforming national governance institutions properly can Vietnam improve the quality and effectiveness of the process of restructuring and growth model transformation to enhance the competitiveness of products, businesses and the whole economy."
“And only by properly reforming institutions can we facilitate the accumulation and concentration of land and the formation of large-scale production regions and a clean, high-value added agricultural industry with sustainable supply to quickly raise Vietnam’s global market share,” he said.
“Otherwise, opportunities from the TPP, Vietnam-EU FTA and other new-generation FTAs will not be grasped."
In conclusion, the premier urged the whole Party, people, army and business community to “raise national pride and join hands and minds to proactively exploit and bring into full play opportunities and strive to overcome difficulties and challenges emerging in the integration process to strengthen the national power.”