Vietnam will exempt some state firms from a Pacific trade pact agreed this week and has negotiated to keep export taxes on its crude oil and coal to support an overstretched state budget, its chief negotiator said on Friday.
The communist nation is seen as one of the biggest winners from the Trans-Pacific Partnership (TPP), with a surge of investment expected into its US$186 billion economy, especially in low-cost manufacturing. Vietnam has kept secret until now the details of what it negotiated.
In areas touching national security, Vietnam can exclude unspecified state-owned enterprises from the TPP, and does not have to reveal those sectors, Vietnamese Vice Minister of Industry and Trade Tran Quoc Khanh said.
Export taxes on coal, crude and some ores would stay, and other countries had negotiated similar exemptions, Khanh said. Vietnam earned US$7.2 billion from exports of crude oil, and US$554.5 million from coal last year.
“The impact on the state budget will be minimal,” Khanh told a news conference.
He said certain materials of specialist nature, or in short supply, would be permitted from outside the TPP area while still qualifying for “yarn forward” rules of origin on garments.
Vietnam’s textiles and footwear would gain strongly from the TPP, after exports of US$31 billion last year for brands such as Nike, Adidas, H&M, Gap, Zara, Armani and Lacoste.
The country makes a tenth of the world’s shoes and is the US’ second-largest source of footwear after China.
Although Vietnam’s TPP gains would outweigh losses, experts say requirements for independent labor unions and fair competition and transparency with state firms have been concerns.
Khanh said Vietnam had got some latitude.
It would follow International Labor Organization principles on unions “on the basis of respecting its political institutions,” he said, and would use its right to have carve-outs for state firms in areas of national security.
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