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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). 22 JOURNAL OF TESOL, VOL. 1 (1), 2016 01/30/2016 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 23 JOURNAL OF TESOL, VOL. 1 (1), 2016 01/30/2016 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. 24 JOURNAL OF TESOL, VOL. 1 (1), 2016 01/30/2016 References Binh, T. T. (n.d.). http://huc.edu.vn. Retrieved from http://huc.edu.vn/vi/spct/id123/DAO-TAO-NHANLUC-O-VIET-NAM/ Chien, T. Q. (2015, 11 16). http://viac.vn/. Retrieved from http://viac.vn/tin-tuc/lao-dong-viec-lam:thuan-loi-va-thach-thuc-sau-khi-tpp-co-hieu-luc-a475.html Customs Office. (2015, 5 20). http://www.customs.gov.vn. Retrieved from http://www.customs.gov.vn/SitePages/Tariff.aspx?portlet=DetailsImportTax&code=09019020&l anguage=vi-VN Doan, T. (2015, 10 15). http://billion.com.vn/. Retrieved from http://billion.com.vn/news/view/Co_hoi_va_thach_thuc_voi_thi_truong_lao_dong_sau_TPP-7 Dung, A. P. (2015, 11 9). http://kinhdoanh.vnexpress.net. Retrieved from http://kinhdoanh.vnexpress.net/tin-tuc/vi-mo/lao-dong-viet-nam-truoc-nguy-co-that-nghiepkhi-tham-gia-tpp-3308840.html Hang, T. (2015, 10 15). http://thanhnien.vn. Retrieved from http://thanhnien.vn/kinh-doanh/nang-suatlao-dong-thap-dang-ho-then-620841.html Hiep, L. (2015, 10 7). http://cand.com.vn. Retrieved from http://cand.com.vn/Kinh-te/TPP-va-co-hoithach-thuc-doi-voi-Viet-Nam-368171/ Hung, D. (2015, 11 5). http://www.nhandan.com.vn. Retrieved from http://www.nhandan.com.vn/tphcm/tin-chung/item/27896202-dao-tao-nguon-nhan-luc-dapung-yeu-cau-phat-trien.html Lam, T. (2015, 10 6). http://www.nhandan.com.vn. Retrieved from http://www.nhandan.com.vn/kinhte/tin-tuc/item/27622002-co-hoi-va-thach-thuc-khi-viet-namgia-nhap-tpp.html Long, M. (2015, 7 24). http://phapluattp.vn. Retrieved from http://phapluattp.vn/kinh-te/lao-dong-vietnam-doi-so-ve-tieng-anh-570189.html Ly, D. (2014, 3 14). http://vtv.vn. Retrieved from http://vtv.vn/kinh-te/det-may-chuyen-minh-don-cohoi-tu-tpp-131520.htm Ngoc, A. (2015, 11 9). http://cafef.vn/. Retrieved from http://cafef.vn/vi-mo-dau-tu/hang-xuat-khauviet-nam-se-duoc-cac-nuoc-trong-tpp-giam-thue-the-nao-20151109160055001.chn Quoc Hung, H. P. (2015, 10 7). thesaigontimes. Retrieved from SaigonTimesGroup: http://www.thesaigontimes.vn/136616/Lieu-co-lan-song-lon-dau-tu-nuoc-ngoai-vao-Viet-Namhau-TPP.html Tam, M. (2015, 11 6). http://thoibaotaichinhvietnam.vn. Retrieved from http://thoibaotaichinhvietnam.vn/pages/kinh-doanh/2015-11-06/chuyen-gia-kinh-te-mo-xediem-yeu-cua-hang-nong-san-viet-truoc-tpp-25943.aspx?google_editors_picks=true 25 JOURNAL OF TESOL, VOL. 1 (1), 2016 01/30/2016 Thuy, D. (2015, 11 10). http://infonet.vn. Retrieved from http://infonet.vn/hang-xuat-khau-viet-nam-seduoc-giam-thue-the-nao-sau-tpp-post181806.info VTV . (2015, 10 6). http://cafef.vn. Retrieved from http://cafef.vn/vi-mo-dau-tu/dam-phan-tpp-thanhcong-ket-qua-khong-bat-ngo-20151006080950958.chn Wikipedia. (2015, 10). https://en.wikipedia.org. Retrieved from https://en.wikipedia.org/wiki/TransPacific_Partnership 26