Good morning. Minister Phat, Vice Minister Khanh, distinguished participants and guests.
It is a great honor to be here and to help welcome you to this event. I am the 3rd U.S. Ambassador to have the honor to open this important annual meeting between the Ministry of Agriculture and Rural Development and the international community and other stakeholders in Vietnam. This year’s topic, “Vietnam’s Accession to the Trans-Pacific Partnership,” is very timely as Vietnam, the United States, and 10 other states completed negotiations on the TPP Agreement just one month ago. Once in force, the agreement would be a critical step in strengthening our collective economic security and further deepening the U.S. – Vietnam relationship. Open markets drive prosperity and the TPP links countries that represent nearly 40% of global GDP and will spur economic growth and enhance competitiveness. After years of intensive negotiations, we have come to an agreement that will support jobs, drive sustainable growth, foster inclusive development, and promote innovation across the Asia-Pacific region.
Since first arriving in Vietnam in 1995 as a Political Officer, I have firmly understood just how important the agricultural sector is to the socio-economic and cultural environment in Vietnam. Agricultural products are common gifts Vietnamese families exchange during the Tet Holiday and at other important times of the year. When travelling from North to South, travelers must pick up some Bánh Cốm, Litchi, or Sấu to take to their colleagues in the South and Mangoes, Seafood, and Qủa Cóc when returning from the South. To say that agriculture is foundational to the Vietnamese economy would be an understatement. Coming back as Ambassador at the end of 2014, I gained a better appreciation for just how vibrant and resilient the agricultural sector can be in Vietnam. Despite the tremendous growth in the industrial and service sectors, the agricultural sector remains the bedrock of the overall economy in Vietnam.
The sector employs nearly 50 percent of the population — with many more still living in rural communities — and continues to meet the challenge of feeding Vietnam’s growing population and millions more across the globe. Agriculture provided an estimated $30.8 billion dollars in export revenue to the Vietnamese economy in 2014. Trading partners ranging from developing countries in Africa; to fellow ASEAN members; to the developed markets of Europe, Japan, and the United States are increasingly turning to Vietnam for imports of a wide range of farm, fishery, and forest-based products. The vital importance of agriculture to the Vietnamese economy as well as regional food security cannot be overstated.
The Trans-Pacific Partnership’s high standards and rules based order are not just catch phrases. Heightened labor and environmental standards, transparent and scientifically grounded sanitary and phytosanitary standards, and biotechnology provisions pose both challenges and opportunities to all agricultural producers in the 12 partner nations, whether you are a soybean farmer in Missouri, a rice farmer in Japan’s Niigata Prefecture, or a Litchi grower in Bắc Giang Province. This agreement will affect farmers in each country in similar ways. However, with planning and investment the opportunities far outweigh the challenges and that’s why 11 countries partnered with the United States to conclude this groundbreaking, world-class agreement. There is tremendous potential for Vietnam to use TPP to further integrate the agricultural sector into the global economy and reap ample benefits from feeding a hungry world.
TPP offers an opportunity to increase Vietnam’s competitiveness and provides access to markets representing approximately 10 percent of the world’s population and importing about 26 percent of the world’s food and agricultural products in 2014. The elements of the TPP agreement that make it a transformative 21st century free trade agreement are exactly those that would reinforce Vietnam’s existing commitment to economic modernization and integration. This further integration and adoption of international standards should open the door to investment in more modern equipment and technology, modernizing the agricultural sector and making it more efficient. This would bring considerable benefits to the farm and food processing sectors in Vietnam. For example, the country’s cinnamon, coffee, and cashews would have greater market access to the North American markets than ever before once TPP is implemented. At the same time, U.S. and other exporters of agro-inputs, such as animal feed, fiber, forestry, and dairy products would gain greater access to the Vietnamese market. Better access for those intermediate products should lower costs, and is critical to the continued success of Vietnamese farmers and producers, including Vietnam’s rapidly expanding wood products and textile/apparels industries.
Trade liberalization brings about dynamic and unexpected changes in an economy. An example many have cited in the past, but it is worth mentioning again to this audience, occurred when the United States completed its first regional trade agreement, the North American Free Trade Agreement (NAFTA). Critics in all three NAFTA countries expressed fear that shifts in agricultural trade flows would harm their farmers, especially smallholders. But in reality, the agreement created larger, growing markets for producers across the region. In fact, total bilateral agricultural trade between the United States and NAFTA’s two partners Canada and Mexico has grown to nearly 5 times the level recorded the year before NAFTA’s implementation and broke through the $100 billion dollar mark in 2014. This phenomenal growth generally demonstrates the old saying that “a rising tide can lift all boats,” with all three countries benefitting from NAFTA. The TPP lays the foundation for similarly explosive and broad-based economic growth and trade between Vietnam and TPP trading partners.
The U.S. Government wants to help Vietnam successfully implement TPP. Indeed, this is also in our interest. Through various programs we stand ready to assist Vietnam as it revises and publishes new regulations to move the legal system in line with the commitments agreed to in the TPP, and as it builds capacity to implement such changes. Assistance has already been extended to Vietnamese farmers through programs such as the U.S. Department of Agriculture’s project with IR-4 which helped MARD’s Plant Protection Department develop pesticide efficacy data for a fungicide commonly used on dragonfruit. That work led to the United States’ Environmental Protection Agency setting a Maximum Residue Limit for that fungicide on dragonfruit, allowing trade in that delicious product with the United States to become more predictable and profitable for Vietnamese farmers. Another example is the U.S. Agency for International Development’s Innovation Lab for Integrated Pest Management, which supports research and extension activities with farmers, counterpart universities, and research institutions to develop sustainable pest and disease control strategies to ensure that Vietnamese produce is able to reach the highest import standards in the world. In the livestock sector, both the U.S. Government and our industry are actively assisting Vietnam with its fight against critical animal disease threats such as Avian Influenza and Foot & Mouth Disease.
The good news is that the United States is just one of the TPP trading partners planning to assist Vietnam as its status moves from “TPP aspirant” to “TPP implementer.” It is my sincere hope that this capacity building be coordinated both within and outside TPP, to include Vietnam’s other FTA partners and help ensure the impact of this capacity building is as robust and deep as possible. Other programs are in place and we expect to develop a number of new ones in consultations with the government and private sector that have already begun.
Today is an excellent start to a dialogue about how TPP will help transform Vietnam, providing income and employment generators to its vitally important agriculture sector as well as other parts of the Vietnamese economy. I look forward to hearing the upcoming presentations and helping facilitate the discussion during this Plenary Session.
Thank you, I wish you and your families’ good health and success.