MINISTRY OF EDUCATION AND TRAINING
FOREIGN TRADE UNIVERSITY

GRADUATION THESIS

The Trans-Pacific Partnership and its effects
on Vietnam seafood exports

Student:

Luong Thanh Tra

Class:

International Trade Law and Policy 3

Supervisor: Assoc. Prof. Dr. Vu Hoang Nam

Hanoi, 2017


ACKNOWLEDGEMENT
On accomplishing this study, first and foremost, I would like to show my deep
gratitude towards my supervisor, Associate Professor Doctor Vu Hoang Nam Director of Department of International Affairs at Foreign Trade University for his
enthusiastic assistance in giving me priceless suggestions as well as instructions.
Secondly, I specifically feel grateful to all my professors of International Trade Law
and Policy program from Foreign Trade University as well as World Trade
Institution for knowledge, lessons and helping me overcome the difficulties in
finishing this study.
Finally, my gratitude also needs offering to my family and my friends at MITPL3
for their valuable support and encouragement during the completion of my

graduation thesis.

COMMITMENT
I hereby confirm that my study is an independent research. The information given in
this paper is true. The findings in this study are analysed honestly and objectively.
This study has not been published in any other research.
Student

Luong Thanh Tra


i

TABLE OF CONTENT

INTRODUCTION ..................................................................................................... 1
LITERATURE REVIEW ......................................................................................... 3
CHAPTER 1. INTRODUCTION OF TPP AND THE POSSIBLE EFFECTS
ON SEAFOOD EXPORT ACTIVITIES IN VIETNAM ...................................... 6
1.1. Overview of the TPP ........................................................................................ 6
1.1.1. Background and negotiation process ..........................................................6
1.1.2. The TPP‟s member countries .....................................................................7
1.1.3. Objectives and main contents ...................................................................9
1.2. The role of seafood export in Vietnam economy ....................................... 11
1.2.1. Contribute to economic growth and development ................................12
1.2.2. An important export source and increase foreign exchange ....................13
1.2.3. Jobs creation, poverty reduction ...............................................................14
1.2.4. Ensure food security .................................................................................15
1.2.5. Ensure water territory, national security and defense ..............................15
1.3. Theoretical framework and indexes .............................................................. 16

1.3.1. Shallow integration...................................................................................17
1.3.2. Deep integration .......................................................................................20
1.3.3. Methodology: Sussex Framework and indexes ........................................23
CHAPTER 2. THE TPP’S EFFECTS ON VIETNAM SEAFOOD EXPORT . 28
2.1. Resources of Vietnam seafood industry ........................................................ 28
2.1.1. Natural resources ......................................................................................28
2.1.2. Social and economic conditions ...............................................................29
2.1.3. Current status of mining, aquaculture, seafood processing ......................30
2.2. Vietnam seafood export situation .................................................................. 32
2.2.1. Overview of Vietnam seafood export activity .........................................32
2.2.2. Seafood exported to TPP member countries ............................................46
2.2.3. Seafood exported to non-TPP member countries .....................................56
2.3. SWOT analysis of Vietnam seafood export in the context of TPP .............. 62
2.3.1. Strengths ...................................................................................................62


ii

2.3.2. Weakness ..................................................................................................63
2.3.3. Opportunities ............................................................................................65
2.3.4. Threatens ..................................................................................................65
2.4. Evaluation on TPP's effects on Vietnam seafood exports ........................... 68
2.4.1. Shallow integration effects .......................................................................68
2.4.2. Deep integration effects............................................................................77
2.5. Review and evaluation ................................................................................... 84
CHAPTER 3. MEASURES TO STRENGTHEN VIETNAM SEAFOOD
EXPORT IN THE CONTEXT OF TPP (2016-2020) .......................................... 85
3.1. Forecast of world seafood demand and Vietnam supply 2020 - 2030 ......... 85
3.1.1. Forecast of global seafood demand ..........................................................85
3.1.2. Forecast of Vietnam seafood production and exports ..............................87

3.1.3. Vietnam government and orientation of fishery development .................88
3.2. Measures to strengthen Vietnam seafood export in TPP context, 2016-2020 ... 90
3.2.1. Measures of government ..........................................................................90
3.2.2. Measures of enterprises ............................................................................94
CONCLUSION ........................................................................................................ 96
REFERENCES ........................................................................................................ 97


iii

LIST OF TABLES
Table 1. TPP members and economic statistics, 2015 ................................................8
Table 2. Contribution of economic sectors to Vietnam economic growth 2011-2015 ....13
Table 3. Fishing vessels with 90 CV capacity or more, 2010-2015E .......................31
Table 4. Vietnam Seafood Exports by Products yearly 2011-2015 ..........................35
Table 5. Vietnam seafood export by products, 2015 ................................................36
Table 6. Value of Vietnamese seafood exported to 11 TPP members, 2010-2015 ..47
Table 7. US per capita consumption of fish and shellfish, 1990-2014 .....................48
Table 8. Seafood importation of the US, 2014-2015 ................................................49
Table 9. Top ten seafood suppliers of the US 2014-2016 .........................................50
Table 10. Top ten seafood suppliers of Japan, 2015 .................................................55
Table 11. Japan‟s seafood importation from Vietnam, 2012-2016 ..........................55
Table 12. Import seafood of China by products, 2014-2015 ....................................58
Table 13. Shrimps exported from Vietnam to China by species, 9M.2016 ..............60
Table 14. Simple average tariffs applying, 2007-2015 .............................................70
Table 15. RCA indexes in HS Codes 03 products by country, 2012-2015 ..............74
Table 16. Trade intensity index of Vietnam‟s export to TPP bloc, 2012-2015 ........75
Table 17. World seafood demand by regions 2020-2030 .........................................86
Table 18. Forecast of Vietnam seafood supply 2020-2030 ......................................88



iv

LIST OF FIRGURES
Figure 1. Top 10 major export products of Vietnam by value, 11 months 2016 ......14
Figure 2. Fishery productions and growth 1995 - 2015 ............................................31
Figure 3. Seafood export value and growth in 2000-2015 ........................................33
Figure 4. Vietnam seafood export structure by products, 2015 ................................36
Figure 5. Vietnam shrimp export value and growth 2005-2015 ...............................37
Figure 6. Vietnam pangasius export 2004-2016E .....................................................39
Figure 7. Vietnam tuna exports, 2015-2016 .............................................................41
Figure 8. Comparison of Vietnam seafood export value to World, TPP and non-TPP
member countries 2010-2015 ....................................................................................45
Figure 9. Vietnam seafood export markets structure by value, 2015 .......................46
Figure 10. Vietnam seafood exported to US by products, 2000-2015......................51
Figure 11. Simple average tariffs (AHS) applying on Vietnam‟s seafood products
by HS Codes, 2012-2015 (%) ...................................................................................71
Figure 12. The GL Index between Vietnam and TPP, HS Codes 03, 2012-2015 ....78


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LIST OF ABBREVIATIONS
ASEAN

The Association of Southeast Asian Nations

FAO

Food and Agriculture Organization of the United Nations


FDI

Foreign Direct Investment

FTA

Free Trade Agreement

GDP

Gross Domestic Product

HS Codes

Harmonized System Codes 2012 by World Customs Organization

HS Codes 03

03 Fish, crustaceans, mollusks, aquatic invertebrates

JPY

Japanese Yen

MARD

Ministry of Agriculture and Rural Development of Vietnam

MFN


Most Favoured Nation

NAFIQAD

National Argo, Forestry, Fisheries Quality Assurance Department
(Ministry of Agriculture and Rural Development of Vietnam)

NAFIQAD

National Argo, Forestry, Fisheries Quality Assurance Department
(Ministry of Agriculture and Rural Development of Vietnam)

NOAA

National Oceanic Atmospheric Administration (The United States
Department of Commerce)

SPS

Sanitary and Phytosanitary

TBT

Technical Barriers to Trade

The US

The United States of America


TPP

Trans-Pacific Partnership

USD

United States Dollar

VASEP

Vietnam Association of Seafood Exports and Producers

VND

Vietnamese Dong


1

INTRODUCTION
1. Rationale of the study
The Trans-Pacific Partnership (TPP) is a new-generation free trade agreement and
also one of the biggest multinational trade deals among twelve economies along two
sides of Pacific Ocean (including Vietnam). With a wide range of commitments and
deep liberalization, the TPP will certainly have strong impact on the whole
economic institutions of member countries as well as import and export activities.
In addition, Vietnam export activities play a very important role in promoting
economic growth; raise capital to industrialize and modernize country; shift the
economic structure towards positive direction. Domestic jobs are largely resolved;
the external economic relations are also open wide. In order to achieve those targets,

one of main solutions is key export commodities construction and development.
Among top ten export commodities of Vietnam, seafood has much potential for
development and has gained many achievements in recent years. Vietnam has good
relative advantages on length of continental coastline and large sea area to develop
fishery sector. However, there are still many restrictions that potential development
can not be fully exploited; especially in complicated economy nowadays.
Many economists says that TPP will bring a “bright picture” for Vietnam‟s
economy in general but whether joining the TPP will bring benefits to seafood
exports of Vietnam or not. Vietnam seafood exports will follow the same direction
as judgment of economists about Vietnam‟s benefits or not? To answer this
question, I choose the title: “The Trans-Pacific Partnership and its effects on
Vietnam seafood exports” for my graduation thesis.
2. Aim of study
Author researches fishery industry and seafood export activity of Vietnam in the
context of TPP in order to answer the question: How TPP affects to Vietnam
seafood export and whether Vietnam seafood exports will get benefits from joining


2

TPP or not as well as which solutions are suitable to promote Vietnam seafood
exports in the context of TPP.
3. Scope of the study
The study research on Vietnam fishery and seafood export situation; mainly in the
markets which are major countries importing Vietnam seafood and focuses on
major export products. This study analyses and focuses on Vietnam seafood export
in the context of TPP and impacts that TPP may bring.
4. Research methodology
Author uses qualitative research methodology and secondary information to achieve
the mentioned purpose. Base on impact analysis of an FTA to an industry which are

shallow and integration as well as the concept of trade creation and trade diversion
in particular, author collects trade data of Vietnam in general and trade data of
Vietnam seafood in specific. Later, author applies rules of thumb from Sussex
Framework in order to identify wherether Vietnam seafood export gains or loses.
Some indexes are used in the thesis to analyse those impacts of TPP to Vietnam
seafood and make rules of thumb more clearly such as revealed comparative
advantage, trade intensity index and Grubel–Lloyd index.
5. Structure of the thesis
Excluding the Introduction and Conclusion, the thesis consists three chapters:
Chapter 1. Introduction of the TPP and the possible effects on seafood export
activities in Vietnam.
Chapter 2. The TPP‟s effects on Vietnam seafood export.
Chapter 3. Measures to strengthen Vietnam seafood exports in the context of TPP.


3

LITERATURE REVIEW
The TPP agreement has been drawing attention from not only Vietnamese but also
foreign economists, researchers and enterprises. Currently, there are a number of
papers, studies and research reports assessing impact of TPP on Vietnam‟s
economy. However, the number of paper and research addressing impact of TPP on
fish and seafood is quite humble. We can find some papers and researches
with different perspectives such as:
“TPP integration – Opportunities and Challenges for Vietnam seafood” by PhD.
Dang Le Hoa from Nong Lam University published in the summary record of TPP
workshop in June 20016: The paper provided a general picture of Vietnam seafood
industry and Vietnam seafood imports and exports with TPP member countries,
especially the US and Japan. The paper also addressed opportunities and challenges
from TPP for Vietnam seafood. However, the paper just provided general comments

and did not use any theoretical framework nor models to analysis TPP‟s impacts. It
also did not provide specific impacts nor recommendations for Vietnam seafood
industry. Similar to this study, the paper “TPP and effects on Vietnam’s tuna
export” by Kim Thu published in March 2015: Author provided very general
evaluation on opportunities and challenges that TPP might bring to Vietnam tuna
export. No specific assessment was addressed.
”Impacts of TPP to trade of products of Vietnam” by Assoc. PhD Hoang Duc Than
from National Economics University published in summary records of National
Science Workshop in 2016: The paper concluded that the labor-intensive industries
and some agricultural products would benefit the most. This stems from the
theoretical advantages of international trade while Vietnam has a lower level than
other countries in the TPP. Footwear, textiles, seafood and agricultural products will
increase their exports to the TPP countries. Fisheries benefit from exports to the
Japanese market while import tariff reduction to 0% in comparison with an average
of 6.4 to 7.2% current import tax.


4
“The Impacts of TPP and AEC on the Vietnamese Economy” by Vietnam institute
for Economic and Policy Research (VEPR) of Vietnam National University
published in August 2015. By using Computable General Equilibrium Model, group
of authors analysed impacts of TPP on Vietnam‟s economy (real GDP, investment,
trade, output, labor demand, economic welfare and tariff revenue reduction). A
quantitative evaluation of potential economic impacts of liberalizing trade in goods
and services under TPP was described. When calculating the reveal comparative
advantage (RCA) index based on trade data classified by SITC, the authors showed
that Vietnam has advantages in labor-intensive goods such as fish and crustaceans,
mollusks (HS Codes 03), with RCA of this commodity in 2012 is 7.77. Percentage
of output change in fishing sector was predicted to decrease in the research with
different scenarios of tariff removal and reduction in non-tariff barriers. For the

economy as the whole, in almost all simulation scenarios, Vietnam is shown to be
the member achieving largest GDP change in percentage term and Vietnam‟s trade
with other TPP countries increases in all case.
“Trans-Pacific Partnership Agreement: Likely Impact on the U.S. Economy and on
Specific Industry Sectors” investigation no. TPA-105-001, USITC Publication
4607. United States International Trade Commission published this report in May
2016. This research gave the principal findings as to the likely economy-wide
effects of TPP to the US, specific sector effects, and the expected effects of TPP‟s
crosscutting rules and other provisions. The research used a dynamic computable
general equilibrium model to determine the impact of TPP relative to a baseline
projection that does not include TPP. The report assessed the impact of TPP on US
agriculture in general and sector-specific analysis for dairy products, beef, pork,
poultry meat products, grains, processed foods, fresh fruits, vegetables, & nuts,
alcoholic beverages and seafood. In the matter of seafood sector of the US, the most
significant TPP provisions for U.S. seafood exporters are the elimination of tariffs
in Japan and Vietnam. The TPP agreement is expected to have a relatively small
impact on U.S. seafood imports as a share of existing trade, despite the fact that
seafood is the second-largest food product group imported from TPP countries, and


5

the fact that TPP partners (mostly Canada, Vietnam, and Chile) supplied an average
of 37 percent of U.S. seafood imports between 2011 and 2015.
In general, there is no quantitative analysis on impacts of TPP to Vietnam seafood.
Most of documents above focused on the overall effects of TPP on Vietnam‟s
economy. They did not cover detailed analysis of possible effects on Vietnam fish
and seafood as well as recommendations for seafood industry to overcome
challenges provided by the TPP to promote Vietnam seafood export or enhance the
position of Vietnam seafood in the world.



6

CHAPTER 1. INTRODUCTION OF TPP AND THE POSSIBLE EFFECTS
ON SEAFOOD EXPORT ACTIVITIES IN VIETNAM
1.1. Overview of the TPP
1.1.1. Background and negotiation process
The Trans-Pacific Partnership Agreement (TPP) is also known as Trans-Pacific
Strategic Economic Partnership Agreement (TPSEP or Pacific Four) which was
started from an agreement signed by Brunei, Chile, New Zealand and Singapore in
June 2005 and entered into force in May 2006 (WTO Center, 2011). One of the
main objectives of the TPSEP is to create a free trade model for the whole of Asia
Pacific region; concurrently expand the accession of related countries belonging to
Asia Pacific Economic Cooperation (APEC) - base on agreed terms among
members. According to TPSEP agreement, its aim was to eliminate about 90
percent of all tariffs among members by year 2006, and reduce all trade tariffs to
zero by year 2015. It is a comprehensive agreement covering a wide range of trade
in goods, trade in services, trade remedies, sanitary and phytosanitary (SPS)
measures, technical barriers to trade (TBT), intellectual property, government
procurement and competition policy.
In September 2008, the United States of America (the US) decided to take part in
negotiation. This event has brought a new look with more attractive expectation in
enhancing economic growth through effective trade activities; opening up new
markets as well as protecting the rights of labor force and competitive environment
in order to ensure sustainable development in long-term for all member countries.
With its attraction, also in year 2008, some more countries have shown their interest
and joined the negotiations such as Australia, Peru and Vietnam during the Summit
of the APEC held in Lima, Peru.
After the three first rounds of negotiation among eight members above, Malaysia

officially presented its application in October 2010 to join the ongoing negotiations
as the ninth member of TPP negotiations. Two years later, Mexico and Canada were


7

invited to join as the tenth and eleventh member after expressing their intent to
enter. The latest member of the TPP is Japan who entered the negotiation in 2013
(SICE, 2016).
Through nineteen official rounds of negotiations and a number of additional
meetings, after more than five years of negotiations, the TPP was concluded in
October 2015 and signed by all twelve members at the signing ceremony held in
Auckland, New Zealand on 4 February 2016 (SICE, 2016). The TPP is expected to
ratified to enter into force in 2018. In the near future, it will still require tough
negotiations before becoming a reality.
The latest updates of TPP negotiation: President-elect of the US, Donald Trump,
who has won the presidential election in November 2016, has claimed against the
ratification of the TPP. He said that he would withdraw the US from the TPP trade
pact on the day he took the office (The Washington Times, 2016). With the biggest
role and position of the US in TPP, the decision of the new President totally
changes the future of TPP. Current TPP members should have preparation for the
scenario of TPP region without the US and Japan takes the lead or the negotiations
will change a lot due to the withdrawal of the US.
1.1.2. The TPP’s member countries
Prior to the withdrawal of the US as the new US President said, there were twelve
negotiating parties in the TPP (including the US). The TPP supported expanding
TPP membership to other economies in the Asia Pacific region. Each prospective
new member must demonstrate commitments to achieve ambitious, comprehensive
outcome. One big target of the US and Japan when joining TPP was to overcome
China and other non-TPP countries. Establishing a unified counterweight economic

zone in the Pacific Rim was paramount important in order to develop regional
economics within their sphere of influence. TPP was also an economical and
political outpost to balance the force and influence of China in the region. Some
countries had shown their interests and intent to join the TPP such as South Korea


8

and Taiwan (East Asia), Indonesia and Thailand (South East Asia), Costa Rica
(Central America) and Colombia (South America).
Table 1. TPP members and economic statistics, 2015

No.

Country

GDP
Population
(USD
(million)
billion)

GDP per
Real GDP
capita
Start of TPP Signature
Growth
(USD
Negotiations of TPP
(%)

at PPP)

1

Singapore

5.5

296

55,841

3.03

Feb 2008

2

Brunei

0.4

11

29,093

-0.47

Feb 2008


3

New Zealand

4.6

192

43,479

2.93

Feb2008

4

Chile

18.0

250

14,366

2.71

Feb 2008

5


United States

321.2

18,125

58,625

3.14

Sep 2008

6

Australia

23.9

1,252

53,052

2.85

Nov 2008

7

Peru


31.9

190

6,242

3.81

Nov 2008

8

Vietnam

91.6

204

2,375

6.00

Nov 2008

9

Malaysia

30.8


328

11,647

4.80

Oct 2010

10

Mexico

121.1

1,232

10,622

3.00

Oct 2012

11

Canada

35.9

1,615


46,528

2.16

Oct 2012

12

Japan

126.7

4,210

34,414

1.04

May 2013

TPP without the US:

490.4

9,782

TPP with the US:

811.6


27,907

7,189.4

73,963

4th
Februar

World total:

y 2016

Source: International Monetary Fund World Economic Outlook, April 2015
TPP was an extremely diverse group of countries, both in terms of level of
development and economic size. The US had the most important role and influence
among TPP member countries. GDP of the US accounted for 65% of the total GDP
of the TPP countries in 2015. TPP countries‟ population (including the US)
accounted for about 11 percent (about 812 million people) of world population but
accounted for 40 percent (about 27,907 billion USD) of global GDP. Without the


9

US, TPP will have only 11 members (including Vietnam), accounted for 7 percent
of world population and 13 percent of global GDP. (Table 1).
The US had shown their interests and joined the negotiations of TPP from 2008
to November 2016. However, the new President of the US, Donald Trump, has
planned to withdraw the US from TPP "on day one" of his presidency in January
2017. The new President of the US has claimed against the TPP: "I'm going to

issue our notification of intent to withdraw from the Trans-Pacific Partnership, a
potential disaster for our country." Instead, he said he would “negotiate fair
bilateral trade deals that bring jobs and industry back”. Hours before Trump‟s
announcement, the Prime Minister of Japan, Shinzo Abe, warned that the “TPP
would be meaningless without US participation” (Ha Thu 2016). The two biggest
members among TPP have opposite opinions on the approval of the TPP. Japan the second biggest countries among TPP members - with its GDP accounted
about 15% of the total GDP of the TPP bloc (Table 1) has approved TPP regardless the TPP withdrawal of the US after the victory of Donald Trump to be
the 45th President of the US.
1.1.3. Objectives and main contents
Prior to the withdrawal of the US, the main objectives and contents of TPP
(including the US) are described shortly as following:
a. Objectives
Being a multilateral free trade agreement with negotiating package approach, the
result of the TPP is an innovative, high standard, ambitious, comprehensive
agreement for trade and investment. The TPP aims to "promote economic
growth; support the creation and retention of jobs; enhance innovation,
productivity and competitiveness; raise living standards; reduce poverty in the
signatories' countries; and promote transparency, good governance, and
enhanced labor and environmental protections."


10
TPP Leaders‟ Statement, November 2011: “…We are confident that this
agreement will be a model for ambition for other free trade agreements in the
future, forging

close linkages among our economies, enhancing our

competitiveness, benefiting our consumers and supporting the creation and
retention of jobs, higher living standards, and the reduction of poverty in our

countries…” The TPP is an open agreement. It allows updates if necessary to
resolve trade problems arising in the future as well environmental problems in
the process of expanding TPP and accepting new members.
The TPP was expected to enhance trade and investment targets among members,
promoted innovation and support economic growth as well as development. In
reporting to Leaders on the achievement of the broad outlines of an agreement,
the Trade Ministers identified five defining features that will make TPP a
landmark, 21st century trade agreement, setting a new standard for global trade
and incorporating next-generation issues that will boost the competitiveness of
TPP countries in the global economy.
b. Main contents
The TPP agreement has 30 chapters covering trade and trade-related issues,
which begins with trade in goods and continues through customs and trade
facilitation; SPS measures; technical barriers to trade; trade remedies;
investment; services and electronic commerce. Others include government
procurement; intellectual property; labor; environment; „horizontal‟ chapters
meant to ensure that the TPP fulfils its potential for development,
competitiveness, and inclusiveness; and dispute settlement, exceptions and
institutional provisions. These include issues related to the Internet and the
digital economy, the participation of state-owned enterprises in international
trade and investment, and the ability of small businesses to take advantage of
trade agreements. Five key-features (USTR, 2015) listed as below:
First, comprehensive market access: The TPP eliminates or reduces tariffs and
non-tariff barriers of all trade in goods and services as well as investment.


11

Second, regional approach to commitments: The TPP facilitates the development
and growth of production as well as supply chains. TPP was expected to enhance

efficiency and create more jobs, raise living standards and facilitate cross-border
integration, as well as opening domestic markets. All of those goals were to
achieve sustainable growth in general.
Third, addressing new trade challenges: The TPP promotes productivity of trade
and investment as well as competitiveness. TPP addresses new issues, including
the development of the digital economy, green technology and the role of stateowned enterprises in the global economy in order to ensure the competitive
environment in the entire TPP region.
Fourth, crosscutting trade issues: The TPP added new elements to make sure
those economies at all levels of development and businesses of all sizes could
benefit from trade. TPP establishes commitments to support small and medium
sized enterprises to take advantage of opportunities as well as proposing
obstacles to the TPP governments.
Fifth, platform for regional integration: The TPP was intended to allow the
updating or adding new economies.
c. New objectives, new contents
In case of withdrawal of the US from TPP, current members will face a big
question: Where will the TPP go? There are scenarios for the future of the TPP:
(i) TPP without the US and Japan is a leader; (ii) TPP will be remained but the
negotiations change significantly. In any scenario, the objectives and contents
will change totally. New objectives will be established as soon as defining who
are members joining the TPP.
1.2. The role of seafood export in Vietnam economy
In general, the fisheries sector is a specific technique economy including wide range
of industrial, agricultural, trade and services activities structured into a unified
system. While the mining industry, building and repairing fishing boats, fishing


12

gear production and processing equipment, trade and many activities such as

logistics services provider transported supplies and special use of the services
sector, the aquaculture carries many characteristics of the agricultural sector.
The fishery sector is considered major source of foreign exchange for many
countries, including Vietnam. In Vietnam, the fishery sector plays an important
role in the national economy, accounting for about 4 to 5 percent of Gross
Domestic Product (GDP) and about 9 to 10 percent of the national export
turnover. This is one of the key economic sectors of Vietnam, with export value
of foreign currencies in the fourth of national economic sector. More than 4
millions of people working in the fishery and the growth in production have
attributed to the fish exports. Vietnam is one of top ten seafood suppliers and
seafood products exporting to nearly 170 markets in the world. Vietnam seafood
industry‟s role is continuously growing in the national economy while its scale is
expanding more and more. For more specific, please take a quick look at some
main roles of Vietnam seafood industry in the next article.
1.2.1. Contribute to economic growth and development
The contribution of fishery in Vietnam economy is considerable. According to
General Statistics Office of Vietnam: GDP of fisheries in 2015 (constant prices
in 2010) reached 91,185 billion VND, accounted for 19.25% of the total GDP of
the agriculture, forestry and fisheries and 3.17% of total GDP of Vietnam. In
2015, GDP of fisheries increased 2.8% in comparison with in 2014, accounted
for 0.09% percentage point to economic growth of agriculture, forestry and
fisheries in particular and nationwide in general. This is the lowest growth rate in
the last five years of fisheries due to many difficulties and challenges of bad
weather, diseases, prices and consuming markets. On average of period 20112015, GDP of fisheries grew 4.64%/year, contributed 0.21% to the economic
growth of agriculture, forestry and fisheries in particular and the Vietnam
economy in general.


13


Table 2. Contribution of economic sectors to Vietnam economic growth 2011-2015
Average
No.

Sectors

2011

2012

2013

2014

2015

ratio of
change
(%/year)

Unit: Billion VND

GDP of economic sectors in Vietnam (constant prices in 2010):

Vietnam
Agriculture,

2,297,220

2,412,778


2,543,596

2,695,796

2,875,856

5.80

418,494

435,414

446,905

462,524

473,671

3.10

327,030

339,048

346,541

355,551

362,769


2.60

1

forestry and fisheries

-

Agriculture

-

Forestry

15,404

16,166

17,101

18,272

19,677

5.86

-

Fisheries


76,060

80,200

83,263

88,701

91,225

4.64

890,331

930,593

981,146

1,051,216

1,152,553

6.44

988,395

1,046,771

1,115,545


1,182,056

1,249,632

6.33

Industry2

Construction

3

Services

Unit: %

Percentage point of economic sectors:

Vietnam
Agriculture,

5.89

5.03

5.42

5.98


6.68

5.80

0.66

0.44

0.48

0.61

0.40

0.52

1

forestry and fisheries

-

Agriculture

0.38

0.10

0.25


0.35

0.26

0.27

-

Forestry

0.03

0.04

0.03

0.05

0.05

0.04

-

Fisheries

0.25

0.30


0.20

0.21

0.09

0.21

2.32

1.89

2.09

2.75

3.20

2.45

2.91

2.70

2.85

2.62

3.08


2.83

Industry2

Construction

3

Services

Source: General Statistics office of Vietnam, period 2011-2015
1.2.2. An important export source and increase foreign exchange
In the past few years, the fisheries sector of Vietnam has affirmed its advantages
and position in the national economy, annually has brought a major source of
foreign exchange to reinvest and implement industrialization and modernization.
Seafood has always been one of the main export items of Vietnam to the world
market. Seafood export has been on Top 10 list of the biggest export turnover
industries of Vietnam. Vietnam has started exporting seafood and the aquaculture


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production since 1994 with an average growth rate of 9.07% per year. Total seafood
export value of Vietnam was only at about 600 million USD in 1994, this figure had
risen to nearly 6.5 billion USD in 2015 and about 6.4 billion USD in 11 months of
2016. The highest value recorded in 2014 at nearly 8 billion USD and seafood
export value ranked no. 5.
Figure 1. Top 10 major export products of Vietnam by value, 11 months 2016

Source: General Department of Vietnam Customs

According to the Preliminary assessment of Vietnam international merchandise
trade performance in 11 months of 2016 (Figure above), total export turnover of
Vietnam reached 160 billion USD (nearly 3 billion USD excess exports over
imports); up 7.8% compared with the same period in 2015. In more details, export
values of 10 major products in 11 months of 2016 generated about 115 billion USD,
accounted for 71.8% of total export turnover of Vietnam; while seafood export
value contributed 6.4 billion USD (up 7%) including 1.33 billion USD to the US,
0.99 billion USD to Japan and 0.61 billion USD to China.
1.2.3. Jobs creation, poverty reduction
It is an economic sector to create jobs for many local especially in rural and coastal
regions. In Vietnam, fishery and aquaculture provide regular jobs for about five


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million people. Fishery is an important source of directly and indirectly income of
labor force who are working with seafood catching, aquaculture, processing and
consumption such as: Port wharves, building and repairing boats, ice production and
supply oil, provide farming equipment, provides packaging… Vietnam government
has established a lot of hunger elimination and poverty reduction programs via
developing the aquaculture models in remote regions. Household economy model
has resolved basic jobs for anglers in coastal areas. Economic smallholder model
and private capitalist economy models have helped to create jobs for many workers,
especially the harvest labors in the Southern and Central regions. Aquaculture in the
Mekong River has created jobs for more than 48 thousands workers at more than
200 riverside communes.
1.2.4. Ensure food security
Seafood industry plays an important role in providing food and ensures food
security. Aquatic foods bring high nutritional and essential value for human
development and provide direct consumed products. At a macro level, it contributes

to ensure food security, meets specific requirements that increase protein and
vitamins in food. In Vietnam, aquaculture is widely developed to remote areas,
contributes to the restructuring of the daily foods as well as provides profuse
nutrition. From the plains to the highlands, all small ponds are used strictly for
aquaculture activities. In the near future, seafood products will be on a high position
in food consumption of Vietnamese.
1.2.5. Ensure water territory, national security and defense
Boosting seafood export and enhancing seafood production as well as productivity
contribute to a more stable development for fishing and aquaculture. In the remote
areas, social stability and economic development of coastal areas and islands will
contribute to the national defense strategy and people's security. The increasing in
quantity of offshore fishing vessels not only exploit the potential of new suppliers of
raw materials for processing seafood but also contribute to protecting national


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security on the seas. Islands and archipelagos have possibilities and conditions to
develop marine and fisheries economics as well as to be outpost system to protect
lands and sea territory. Aquaculture development is to create chances for Vietnam
exploit the resources in the sea, on the islands and continental shelf effectively. This
is the basis to affirm our sovereignty to the sea and the continental shelf around the
islands. At the moment, a lot of important ports are built following the East Sea
islands program, such as: Co To (Quang Ninh), Bach Long Vi and Cat Ba (Hai
Phong), Hon Me (Thanh Hoa), Con Co (Quang Tri), Ly Son (Quang Nam), Phu Qui
(Binh Thuan), Con Dao (Ba Ria-Vung Tau), Nam Du, Tho Chu and Phu Quoc
(Kien Giang). This ports system will be ready to serve fisheries production and
contribute to protecting the security and sovereignty of Vietnam.
1.3. Theoretical framework and indexes
According to a Preliminary Assessment of TPP‟s impact on Vietnam by Le Hong

Hiep, “the TPP will create both winners and losers in Vietnam. Greater access to
major markets, especially the US and Japan, will boost the export of some major
product categories in which Vietnam enjoys comparative advantages, such as textile
and apparel, seafood, aquaculture, agriculture and forestry products. The industry,
however, will have 10 years to enhance its competitiveness before having to
compete with duty-free imported products”. The nature of the TPP is a new model
of free trade agreement (FTA). Free trade means that countries can import and
export goods without any tariff barriers or non-tariff barriers to trade. FTA enables
lower prices for consumers, increased exports, benefits from economies of scale and
a greater choice of goods. According to the theory of comparative advantage: By
specialising in goods where countries have a lower opportunity cost, there can be an
increase in economic welfare for all countries. Free trade enables countries to
specialise in those goods where they have a comparative advantage. Theoretical
analysis of an FTA was based primarily on the concepts of trade creation and trade
diversion introduced by Viner (1950). According to the theory of international
economics and Sussex Framework, FTA in general and the TPP in specific also


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have those two types of effects on welfare. Let us take a closer look at TPP‟s
possible effects on export as following:
1.3.1. Shallow integration
Preferential trade liberalisation involves a process of shallow integration, defined as
the removal of border barriers to trade, typically tariffs and quotas. The potential net
benefits from shallow integration are inherently ambiguous because of the
likelihood of both trade creation (which is welfare increasing) and trade diversion
(which is welfare reducing). There always exist benefits and costs of accession into
FTA, which are trade creation and diversion. Those are happening to any member
of any integration. The free trade in general utilizing comparative advantage of each
member to benefit national welfare is trade creation. However, when a member

switches import from an efficient country to a less efficient country due to the FTA,
the economic welfare will be hurt, resulting in a trade diversion. In most cases, FTA
brings both trade creation and trade diversion with net effects determined by the
structure of the FTA (Evans, 2006). The TPP is also a FTA and it will create that
both effects. The more integrated members of TPP become, the more efficiency
trade will generate through the application of economies of scale. Prices may fall,
relative to those of non-TPP countries, and the process of trade creation continues.
The major losers are old trading partners left outside the bloc. Member countries
tend to import products from other member countries in FTA rather than their old
trading partners. The process of efficient producers losing out to inefficient ones is
referred generally to a trade diversion.
1.3.1.1. Trade creation effects
Reducing tariff barriers leads to trade creation where consumption switches from
high cost producers to low cost producers (Nam, 2014). Trade creation does not
move trade turnover from a country to another country but increase trade turnover
when TPP is established. Export activity is expected the most beneficiary from TPP.
It is estimated that the TPP might help Vietnam expand its GDP by 11% and its


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exports by 28% within ten years. Seafood export of Vietnam will be distributed
more broadly crossing the world.
The first important effect that TPP brings to Vietnam seafood industry is the
elimination of all tariffs on fish and seafood under the TPP. Similar to other FTAs,
the TPP also desires to create non-barrier trade environment. Within TPP
agreement, 18 thousand tariff lines on industrial and agricultural product will be
eliminated immediately or reduced to zero in a very short time among TPP member
countries. The elimination of tariffs in key TPP markets will generate a price
advantage for Vietnam seafood exports relatively to export products from non-TPP

countries. In 2015, the two largest export markets of Vietnam (the US and Japan)
accounted for nearly 36% of total seafood export turnover and accounted for nearly
80% of total seafood export value of Vietnam to TPP member countries. When TPP
is in effect, taxes of import and export goods will be reduced to 0% following
schedule. This will be a good opportunity for Vietnam's fisheries sector
development in the future.
Second, seafood-processing enterprises of Vietnam take advantage of excess
capacity due to imported raw materials for seafood from TPP member countries.
After that, they are processed and re-exported to TPP market and non-TPP market,
especially the EU. It should be noted that only raw materials imported from new
TPP members could enjoy tax rate of 0%. Following that, seafood sector also has a
chance to increase its competitiveness by taking advantages of support services to
produce products at a lower price such as transport, imported technology, imported
machines and equipment from TPP members at a cheaper price.
The TPP will help seafood consumers to benefit the most because they can
approach and buy products at a lower price. Meanwhile, trade creation effects do
not generate the same result for the government and the domestic enterprises of
import countries. Government budget will decrease due to loss of tax revenue partly
from imports; domestic manufacturers will also reduce profits by standing in front
of the fierce competition and shared market share from foreign enterprises.
However, when considered together, the impacts on trade has increased national