Research on the impact of TPP on vietnams aquaculture export industry and some solutions to promote seafood exports to TPP member countries by 2025 2

NATIONAL ECONOMICS UNIVERSITY INSTITUTE OF ADVANCED TRAINING, HIGH QUALITY, AND POHE INTERNATIONAL ECONOMIC COURSE INTERNATIONAL ECONOMIC PROJECT Topic: Research on the impact of TPP on

NATIONAL ECONOMICS UNIVERSITY INSTITUTE OF ADVANCED TRAINING, HIGH QUALITY,

AND POHE INTERNATIONAL ECONOMIC COURSE

INTERNATIONAL ECONOMIC PROJECT

Topic: Research on the impact of TPP on Vietnam's aquaculture export industry and some solutions to promote seafood exports to TPP member countries by 2025

Student name : Lê Quang Huy

Student code : 11192375

Specialized : International Economic

Class : High Quality International Economic 61A

Teacher : Mr Nguyen Xuan Hung

Phone number : 0903201642

Email : hungnx@neu.edu.vn

Student phone number : 0914996686

Student email : huymap 6501 @gmail.com

Hanoi, 06/2022

TABLE OF CONTENTS

1 Introduction……… 4

2 Research overview, theoretical basis and research methods assist……… 4

2.1 Research overview and related theoretical basis……… 4

2.2 Theoretical framework or analytical framework used in the

article……… 5

2.3 Research Methods 5

3 Research results and discussion……… 6 3.1 Basic contents of the TPP Agreement related to the export aquaculture industry…….6

3.2 Overview of Vietnam's aquaculture export industry……… 7

3.3 Analyzing the impact of TPP on Vietnam's aquaculture export industry……… 9

3.4 Some conclusions and recommendations……….12

3.5 Research and propose solutions to promote Vietnam's seafood exports to TPP member

countries by 2025……….14

4.Reference……… 16

STATUTORY DECLARATION

I hereby declare that this assignment is entirely my own work The quotations and materials used in the exercise are completely honest, are cited and guaranteed to the highest degree of accuracy to the best of my knowledge If it is not as stated above, I take responsibility for my assignment

Student

Le Quang Huy

ACKNOWLEDGEMENTS

To carry out and complete this project, data sources from reputable agencies as well as magazines and newspapers have supported the group a lot The research has been completed based on references, learning experiences and inheriting from related research results, books and specialized journals of many authors at universities, research organizations, political organizations

First of all, I would like to thank the National Economics University in general and the leadership of the Institute of Advanced and High Quality and POHE in particular for creating favorable conditions for us to have a favorable environment learn, gain experience and capture useful information based on providing lectures of subjects related to the research topic

In particular, I would like to thank Mr.Nguyen Xuan Hung, who directly guided

me throughout the course of the exercise During the time working with you, I have not stopped learning to accumulate a lot of useful knowledge for myself, but also have learned a serious and effective working spirit, these are very necessary things for me in my career future study and work

I have tried a lot to complete this research topic, but shortcomings cannot be avoided Therefore, I hope that you and others who are interested in the topic can continue to give suggestions and help to improve the topic

Wishing everyone good health, happiness and success in life!

Hanoi, April 15th 2022

Student

Abstract

The TPP is expected by the world to become a comprehensive, high-quality trade framework that

is a template for 21st century Agreements This Agreement will have a certain effect on the import and export of agricultural products in general and seafood in particular of Vietnam This article focuses on giving an overview of the TPP, analyzing the current situation of Vietnam's seafood import and export into TPP member countries in the past time, clarifying the opportunities and challenges for the seafood industry when Vietnam Nam joined the TPP, and at the same time made a number of proposals and recommendations to take advantage of opportunities, overcome challenges, and contribute to promoting Vietnam's seafood exports to the markets of TPP member countries in the near future

Keywords: TPP, aquaculture, export, tariffs, technical barriers.

Content

1 Introduction

The Trans-Pacific Partnership (TPP) is a new-generation free trade agreement that is expected to have huge impacts on member economies This article analyzes the impacts of TPP on Vietnam's export aquaculture (Aquaculture) industry The TPP will have positive effects on Vietnam's export industry through opportunities in market access, foreign investment, advanced science and technology, and access to international arbitration institutions neutral economy Besides, TPP will also be able to create challenges due to stronger competition in the domestic market, higher requirements for meeting technical standards,for export aquatic products and labor and environmental standards in aquaculture

2 Research overview, theoretical basis and research methods assist:

2.1 Research overview and related theoretical basis

Relating to the theoretical and practical basis on the topic of competitiveness of exported seafood has been studied at home and abroad with different approaches and levels, through research works , publications are published The content of some major research works of domestic and foreign authors in recent years can be mentioned as follows:

The study "Improving the competitiveness of Vietnamese seafood exporters to 2030" This is a doctoral thesis by Tran The Hoang and will be completed in 2021 The thesis has systematized the development of seafood export enterprises To develop competitive theory of enterprises, measure the components of competitiveness, analyze the current situation of strengths and weaknesses, thereby proposing groups of basic solutions to improve the competitiveness of enterprises competitiveness of Vietnamese seafood exporters by 2030

The study "Improving the competitiveness of Vietnam's seafood processing industry", This is the doctoral thesis in economics conducted by Bui Duc Tuan, completed in 2019 The thesis analyzes and evaluates the current state of energy competitiveness of the seafood processing industry in Vietnam, analyzing potential factors and advantages of Vietnam in the process of developing the seafood processing industry, thereby uncovering the problems posed for the seafood processing industry Vietnamese products in terms of world economic integration The thesis has assessed the competitive status of the industry, the barriers that affect the improvement

of the competitiveness of the seafood processing industry in Vietnam, in addition to certain competitive advantages compared to other countries other countries in the world

Research by co-authors Arie Pieter van Duijn, Rik Beukers and Willem van der Pijl, "The VietNamese seafood sector A value chain analysis", published in 2020 The work focuses on analyzing the following contents: characteristics and trends trends of Vietnam's seafood industry; EU demand for Vietnamese seafood; bottlenecks for Vietnam's seafood exports to the

EU The work uses a global value chain tool to analyze four sub-sectors of Vietnam's seafood industry Vietnamese seafood: shrimp, pangasius, tuna and sub-sectors, oysters, mussels Report

“The Fisheries Sector in Vietnam: A Strategic Economic Analysis” by the Embassy of Denmark

in Vietnam in Phase II of Fisheries Sector Support Program, Early 2020 This study was presented to Vietnamese government policymakers, to provide a basis for making the right choices in selecting and designing Government intervention design in Vietnam's fisheries sector The study focuses on the following key issues: Overall assessment on Vietnam's seafood industry; Aquaculture in Vietnam; Fisheries

Although there are many research works related to this problem, none of them really focus on solutions that need to be implemented immediately to be able to improve Therefore, this article will analyze the current situation of seafood import and export of Vietnam into TPP member countries, clarifying opportunities and challenges for the seafood industry when Vietnam joins TPP, At the same time, some proposals and recommendations were made to take advantage of opportunities, overcome challenges, and contribute to promoting Vietnam's seafood exports to the markets of TPP member countries in the coming time

2.2 Theoretical framework or analytical framework used in the article

(do not have)

2.3 Research Methods:

Document Research, Observation

3 Research results and discussion:

3.1 Basic contents of the TPP Agreement related to the export aquaculture industry

The objective of TPP is to facilitate trade by eliminating taxes and barriers for import and export goods and services between member countries… Here are some basic related agreements related

to the aquaculture export industry

* Agreement on trade facilitation in the fisheries sector

Tariff reduction: Member countries will reduce 90% of import and export taxes on goods and

cut them by 0% according to the roadmap Vietnam's seafood exports are entitled to a tax rate of 0% immediately after the Agreement comes into effect or after 3-5 years Specifically, the US, Singapore and Chile committed to eliminate import-export tax on Vietnamese pangasius and shrimp as soon as the Agreement took effect; Canada, Japan, Australia commit to eliminate after 3-5 years For Mexico, Pangasius, Basa, will be eliminated in the 3rd year, Frozen shrimp will be eliminated in the 13th year, Processed shrimp will be eliminated in the 12th year Vietnam is committed to implementing the elimination roadmap tariffs in the 8th year for imported (imported) aquatic products

Simplify border controls: Regulations relating to phytosanitary measures (SPS) apply only to

the extent necessary and are non-discriminatory TPP accepts equivalence, recognizes epidemic-free areas, transparency, permits the application of urgent measures, facilitates inspection process, technical consultation and strengthening between the parties

Rules of Origin for Goods: TPP member countries agree on a common set of rules of origin to

identify a particular good as “originating” and thus enjoy preferential tariffs in the TPP The TPP Agreement also provides for "aggregation" so that input materials from one TPP party are treated like materials from another party if used to produce a product in any of the TPP parties However, for seafood products (except tuna), regulations allow the use of seed and input materials imported outside TPP

Customs procedures: TPP facilitates trade through simplification and harmonization of customs

procedures, application of a common mechanism for certification of origin, self-certification of origin, transparency of financial institutions and animal and plant health and safety (SPS)…

Export subsidies: For agricultural and fishery products, in addition to cutting tariffs according

to the schedule, member countries also loosen other restrictive policies, including: removing export subsidies, regulations on export credits, do not allow the use of special safeguard measures…

* Commitment to facilitation in the field of investment and finance

The TPP agreement provides commitments that allow investors to be unrestricted in the transfer

of capital and assets into and out of a country; except for cases affecting the macroeconomic balance or related to crime, tax evasion The TPP also sets forth principles that require fair and non-discriminatory investment protection and policies to uphold the rule of law, while ensuring the ability of member governments to achieve legitimate public policy goals The TPP provides for the same basic investment protection as in other trade agreements

The Agreement also provides for neutral and transparent international arbitration for investment disputes The procedural safeguard mechanism includes: transparent arbitration process, submissions by interested parties, third party submissions; a review is conducted of insignificant claims and a determination of attorneys' fees; interim review and decision mechanism; binding interpretation of the TPP parties; …

The contents of commitments on financial services include expanding commitments on market opening along with a transparency mechanism, allowing exceptions The TPP provides opportunities to open up investment and cross-border markets while ensuring that TPP members maintain adequate regulatory authority over financial institutions and markets, taking urgent measures in the event of a crisis Accordingly, it allows the cross-border sale of specific financial services to a TPP member from a service supplier of another TPP member without requiring the service supplier to establish a base of operations in another country to sell its services

The TPP Agreement also includes specific commitments on portfolio management, electronic card payment services and information transfer for data processing; The specific provisions on investment disputes relate to minimum standards of treatment based on customary international commercial law, as well as those relating to financial services professionals in arbitration and special sequence mechanism intended to facilitate the application of prudent and other exceptions

* Other commitments

Commitment to harmonize institutions and policies among member countries The TPP is expected to include commitments on cross-cutting issues such as the harmonization of legal regulations, competitiveness, issues of supporting the development of small and medium-sized enterprises, supply chains, and development assistance…

3.2 Overview of Vietnam's aquaculture export industry

According to a report of the Vietnam Directorate of Fisheries, it is estimated that by the end of June, the total fishery production will reach 4.1 million tons, increased 3% over the same period

in 2020 Of which, the fishing yield will reach nearly 2 million tons, increase 1%; aquaculture output reached 2.1 million tons, increase 4%; The value of seafood export turnover in the first 6 months of the year was estimated at 4.1 billion USD, increased 13.6% over the same period and reaching 47.1% of the plan thanks to the recovery of consumer demand in major markets such as the US, the European Union (EU) and other potential markets

Regarding shrimp, in the first 6 months of 2021, shrimp production is estimated at 371 thousand tons, increased 12% over the same period in 2020 In which, the yield of Black Tiger is nearly

113 thousand tons, and the yield of Vannamei is nearly 113 thousand tons Vannamei reached nearly 258 thousand tons Regarding Pangasius, it is estimated that by the end of June 2021, the harvested yield will reach 704.1 thousand tons, increased 0.9% compared the same period; Pangasius export turnover reached 637.9 million USD, increased 14.7% over the same period Compared with the target, the total yields reached 104.3%, of which, the aquaculture production reached 102.3%, the fishing yield reached 106.8 %; compared with the whole year plan target, the total fishery yield reached 47.6%; in which, exploitation yield reached 51.9%, aquaculture production reached 44.2% These results are positive despite many difficulties of Covid-19 pandemic

Source: Statista

Seafood export value has increased healthily

Thanks to the recovery of consumer demand in major markets of Vietnamese seafood such as the

US, EU and other potential markets, Vietnam’s seafood export turnover in June 2021 increased

by 20% compared to the same period last year As a result, seafood export value in the first 6 months of the year reaches 4.1 billion USD

According to Vietnam Association of Seafood Exporters and Producers (VASEP), Pangasius is being consumed well in the US, European, and Chinese markets As of the end of June 2021, Vietnam’s export value of other seafood products reached 1.6 billion USD, increase 16% over the same period in 2020 Seafood sources accounted for nearly 40% of the export proportion in the first 6 months of this year; in which, tuna export value reached 364 million USD, increased 24% over the same period in 2020 Export value of squid and octopus reached 277 million USD, increased 15% compared to the same period last year Other types of fish reached USD 847 million, up 13%

Mr Truong Dinh Hoe, General Secretary of VASEP said that squid, octopus and tuna are all growing in most major markets In recent months, import value of Vietnamese tuna has increased 1.5 times in the US market compared to the same period last year, so in the first half of the year, tuna export value to the US increased by 23% The US is consuming 43% of Vietnam’s tuna When the US market reopens, all segments of tuna products have the opportunity to increase market share Other key markets all have very optimistic signals of growth Typically, Italy increased 122% in the first 6 months, Israel increased 37%, Canada increased 62%

The Chinese market is Vietnam’s fifth largest cephalopod consumption market, accounting for 6% of total exports of squid and octopus In the last 3 years, Vietnam’s export value of squid and octopus to China have tended to grow continuously The export value of squid and octopus in

2020 will increase by nearly 61% compared to 2019 Entering 2021, this growth trend will continue Import value of dried squid and grilled squid into China from Vietnam continued to grow impressively by more than 300% compared to 2020 Besides, Vietnam’s export value of fresh and frozen squid to this market have also increased again

Regarding the Korean market, the largest market for Vietnam’s squid and octopus consumption, accounting for 41% of the total export volume of squid and octopus, is on an increasing trend, with a growth rate of 7-8% The Japanese market, accounting for 20% of Vietnam’s squid and octopus export value, is also showing a good trend At the same time, export value of squid and octopus to Italy have grown sharply by 170% in recent months and increased by nearly 70% in the first half of the year Those are good news for Vietnam’s seafood exports to reach $9 billion

in 2021

3.3 Analyzing the impact of TPP on Vietnam's aquaculture export industry

Positive effects of TPP

* Expanded consumption market

Currently, the member countries participating in the TPP are all strategic partners of Vietnam's seafood The total value of seafood exports to these 11 markets reached over 3 billion USD, accounting for nearly 50% of the total seafood export value In theory, TPP will be an opportunity for Vietnamese seafood enterprises to expand their market Trade barriers are removed forming a larger regional seafood consumption market In addition, Vietnam's seafood products will be more competitive in the TPP market than those outside the bloc because these countries do not enjoy preferential tariffs For example, TPP will make Vietnamese shrimp exports to the Japanese market more competitive than Agentina, Ecuador and India when these three countries do not have a free trade agreement (FTA) with Japan