The Trans-Pacific Partnership (TPP) agreement, once approved by its member countries, is expected to benefit trade ties between Vietnam and Mexico thanks to tax preferences and the removal of tariff barriers, said Ambassador to Mexico Le Linh Lan.

Vietnam will eliminate 65 percent of import taxes imposed on Mexican products right after the pact takes effect and 95 percent of the duties within 10 years, the ambassador told Mexico’s Trade and Investment Promotion Agency (ProMexico).

In response, Mexico has committed to lifting 77.2 percent of taxes on Vietnamese goods, making up 36.5 percent of Vietnam’s total export revenue to the Latin American country, she said.

Photo for illustration: Reuters

To observe the commitments and maximize opportunities brought about by the agreement, Lan suggested the two countries enhance their cooperation, exchange information and experience, support each other and raise competitiveness of their small-and medium-sized enterprises, helping them gain a firm niche in the domestic market while expanding the export market.

However, she stressed, the deal is also predicted to pose a range of challenges to both countries such as higher competitiveness and stricter regulations regarding technologies, environment, product safety, hygiene and origin.

During the first eight months of this year, Vietnam imported USD 312 million worth of goods from Mexico, a drop of 2.5 percent year-on-year, while exporting more than USD 1.2 trillion to the country, up 20 percent against the same period last year.

Vietnam’s key exports to Mexico include phones, footwear, electronic equipment and components, garments, aquatic products and coffee. It imports computers, electronic products and parts, machines, tools and cattle feed from the country.

The TPP started out as P-4 with Chile, New Zealand, Singapore and Mexico. The US joined in September 2008 and Vietnam in early 2009. The deal now brings together 12 countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam.

The pact aims to break down trade and investment barriers between these countries of 800 million people, which constitute 30 percent of global trade and about 40 percent of the world’s economy.

TPP negotiations began in March 2010 and concluded in October 2015 after 19 rounds. The full-text of the deal was released a month later. Most contents of the agreement have remained unchanged by members apart from some technical aspects.

Source: VNA