Download Adverse effects of it on the Vietnamese labor and the competition of

JOURNAL OF TESOL, VOL. 1 (1), 2016
01/30/2016
Adverse effects of it on the Vietnamese labor and the competition of the domestic companies
Pham Bang Chau
Recently, Vietnam government has tried to get Vietnam into the world trade markets by entering
the TPP (Trans-Pacific Strategic Economic Partnership Agreement) among 12 countries. The TPP
agreement was completed in 5th October 2015 and intended to sign in 4th February 2016. Historically, the
TPP is an expansion of the Trans-Pacific Strategic Economic Partnership Agreement (TPSEP or P4), which
was signed by Brunei, Chile, New Zealand, and Singapore in 2005. Beginning in 2008, additional countries
joined the discussion for a broader agreement: Australia, Canada, Japan, Malaysia, Mexico, Peru, the
United States, and Vietnam, bringing the total number of participating countries in the negotiations to
twelve. Current trade agreements between participating countries, such as the North American Free Trade
Agreement, will be reduced to those provisions that do not conflict with the TPP, or that provide greater
trade liberalization than the TPP (Wikipedia, 2015). TPP was predicted it will create a large trade area that
hold 40 percent of global GDP and 30 percent global trade (VTV , 2015). It can give an impulse to trade
and that is also the reason many people are hoping that this event will help increase the Vietnamese
economics as well as enhance the GDP of the nation. However, some people still suspect for the adverse
effects of it on the Vietnamese labor and the competition of the domestic companies.
Firstly, contracting the TPP will have a huge impact not only on the lacking of finding jobs but
also on the GDP of Vietnam. TPP brings the opportunities in finding jobs and increase the GDP of Vietnam.
After TPP agreement, many foreign investors will invest more capital in Vietnam and researchers predicted
it will have a significant rise in the Foreign Direct Investment of Vietnam (FDI). Report from Vietnam
Institute for Economic and Policy Research (VEPR) showed that when Vietnam participated in TPP, the
FDI was predicted to increase approximately 13 billion USD, almost equal the rate of growth in the FDI of
Japan and twice as much as the rate of growth in the FDI of Australia (Quoc Hung, 2015). The increasing
of FDI is an important factor to impulse the labor market. The investors invest more capital, establish
companies, farms in Vietnam and that means they need a big quantity of labor to work at their companies
or their farm. Research proclaimed that when the foreign investment raises, the demanding of manual and
skilled labors will increase approximately 40 percent (Doan, 2015). The demanding of labors will be
manifest increased in textile industry, aquatic industry and footwear industry (Chien, 2015). The rise of the
demanding labors solve the problems of lacking jobs in Vietnam in the recent years and it also create the
work for farmers to produce food. Subsequently, when the problems of lacking jobs were solved, the GDP
of Vietnam will be increased. Report claimed that the GDP of Vietnam will raised 35,7 billion USD in 2025
if we meet the demands of our partners (Lam, 2015).
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Secondly, TPP agreement practically abolish the taxes for 12 countries in the agreement. The
abolishing taxes for 12 countries brings along many advantages for Vietnam such as promote exporting,
importing with a competitive price and expand economic market. Information’s from the Department of
the Treasury claimed that about 78 to 95 percent of taxes will be abolished after TPP agreement take effect
(Ngoc, 2015). For instance, the US commit to practically abolish 100 percent of taxes, specific 55,4 percent
for agriculture (equivalent to the 97,7 percent of the turnover in importing from Vietnam, attain 0,95 billion
USD) (Ngoc, 2015). Abolishing taxes not only help to exporting and importing with a competitive price
but also promote expanding economic market. For instance, before TPP agreement, taxes for footwear to
export to Japan is 22,5 percent the value of the whole bale (Customs Office, 2015). After TPP agreement
takes effect, Japan will abolish taxes for 86 percent products that has been taxed before TPP (Thuy, 2015).
Subsequently, when taxes abolish, the price of the products will decrease and the products from Vietnam
can rival other companies in doing business with competitive prices. Economic market of Vietnam will be
enlarged because companies don’t have to care about taxes or the produce to pay taxes, companies just need
to pay attention on our products to compete with other home companies and foreign companies.
Although TPP agreement brings along many advantages, some people still concern that TPP also
have it challenges. The ability of Vietnamese labors being unemployed still at a high rate and the possibility
of competing in economic market of Vietnam is at the low rate. Research showed that the productivity
proportion of Vietnam is at the lowest group in ASEAN, lower than Singapore 15 times, Japan 11 times,
Korea 10 times, Malaysia 5 times, Thailand 2,5 times (Hang, 2015). As the low productivity of Vietnamese
labors, companies rather hire labors from other countries than hire Vietnamese labors. Thus, the lacking
skills in working and doing teamwork are some other reasons for companies to hire labors from other
countries. Report assert that Vietnam’s human and financial resources may be profuse but lack of skills and
experiences. In 2013, the educated labor force make up 18 percent and two years later the number only
raised 1,5 percent ( (Dung, 2015). Moreover, if labors want to work in foreign companies, they have to
know at least one general language such as English. However, labors from Vietnam are standing at a very
low place in language level. Vietnam only ranked 4th place in the group of 5 countries in the area about
language level. Research about English level of graduated students showed that only 5 percent is confident
speak English fluently but up to 27 percent admitted that they don’t know anything about English (Long,
2015). It is very difficult to Vietnamese labors to compete with their competitor due to their lacking of
skills, languages and low productivity. The other problem need to be concern is that although TPP
abolishing taxes maybe brings along many opportunities yet attach many challenges. First, we have
difficulties in exporting our products because of the quality of the products and the prices haven’t satisfied
our customers. For example, the rice product of Vietnam will be competed very hard when the price is
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higher than India yet the quality is lower than India, Cambodia, Philippine,… (Tam, 2015). Due to the high
prices and the low quality of the products, Vietnam’s companies can hardly compete with their competitor
and the ability that lead to bankrupt could happen in the future. This also result in lacking jobs for farmer
because Vietnam’s farmers not only lack of knowledge about the requirement for quality of the products
but also lack of skills to produce qualified products. Second, when Vietnam abolish the taxes, products
come from 12 countries in TPP agreement will spread over our countries. It makes products of Vietnam
hard to compete due to the low quality of our products. According to VERP, we will be fierce competed in
many field specially in breeding. Vietnam’s breeding at a small scale while other countries in TPP breeding
with higher technique and larger scale (Hiep, 2015). TPP put our country in to a challenges in enhancing
our labors skills and our products to compete with other countries. These challenges will make Vietnam’s
economy stagger if companies and the educating manager do not have any action.
We all know that every opportunity comes along with challenge. The challenges our country have
to face when TPP takes effect can be hard to get over but it also a good lever to impulse Vietnam economy.
Without challenges from TPP, we will never really notice our weakness and shortcoming in many field.
Before the day TPP officially signed, many companies have changed to prepare for facing with the
challenges. For instance, at Nha Be company, Agrimex company, Sai gon 3 company… they have prepared
modern manufacturing technique that reduce 25 – 30 percent labors, reduce funds yet improve the quality
of the products (Ly, 2014). About the problems of labors that are lacking skills and experience, the
educating manager also have strong solutions for the situation. Information showed that they are changing
the educating program and technique to meet the requirement of the companies. In additional, they are
upgrading the skills of the lectures and really care about how they treat with the training labors (Hung,
2015). These information are obvious evidence that we are changing to wait and welcome the day TPP take
effect. Every opportunity comes along with challenge and we can use the challenge to strengthen our
country not only in economy but also in other fields.
TPP is a great concern not only for the government but also for the citizen. TPP has opportunities
and challenges. If we want to be success we have to take advantage of it and developed our country day by
day. The government have to enhance labors skills, change the policy to balance the economic market.
Companies have pay attention on the quality of the products to meet the requirement of the customer so
that we can compete with other country. Moreover, we have to integrate to welcome the opportunities or
challenges and to develop our own country.
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