* State firms in "national security" areas exempt
* Export taxes remain on coal, crude, ores
* ILO requirements on unions will be followed
* Vietnam seen as one of the biggest gainers from TPP
By Martin Petty and Mai Nguyen
HANOI, Oct 9 (Reuters) - Vietnam will exempt some state
firms from a Pacific trade pact agreed this week and has
negotiated to keep export taxes on its crude oil and coal to
support an overstretched state budget, its chief negotiator said
on Friday.
The communist nation is seen as one of the biggest winners
from the Trans-Pacific Partnership, with a surge of investment
expected into its $186-billion economy, especially in low-cost
manufacturing. Vietnam has kept secret until now the details of
what it negotiated.
In areas touching national security, Vietnam can exclude
unspecified state-owned enterprises (SOEs) from the TPP, and
does not have to reveal those sectors, said Tran Quoc Khanh,
vice minister of industry and trade.
Export taxes on coal, crude and some ores would stay, and
other countries had negotiated similar exemptions, Khanh said.
Vietnam earned $7.2 billion from exports of crude oil, and
$554.5 million from coal last year.
"The impact on the state budget will be minimal," Khanh told
a news conference.
He said certain materials of specialist nature, or in short
supply, would be permitted from outside the TPP area while still
qualifying for "yarn forward" rules of origin on garments, one
of Vietnam's top sectors.
Vietnam's textiles and footwear would gain strongly from the
TPP, after exports of $31 billion last year for brands such as
Nike (NYSE:NKE) NKE.N , Adidas ADSGn.DE , H&M HMb.ST , Gap GPS.N , Zara
ITX.MC , Armani and Lacoste.
The country makes a tenth of the world's shoes and is the
United States' second-largest source of footwear after China.
Vietnam anticipates record foreign investment this year, the
majority in manufacturing, as firms capitalise on its cheap
labour and the prospect of the TPP slashing tariffs in a region
covering 40 percent of global GDP. urn:newsml:reuters.com:*:nL4N11V1QH
Although Vietnam's TPP gains would outweigh losses, experts
say requirements for independent labour unions and fair
competition and transparency with state firms have been
concerns.
Khanh said Vietnam had got some latitude.
It would follow International Labor Organization principles
on unions "on the basis of respecting its political
institutions", he said, and would use its right to have
carve-outs for state firms in areas of national security.
Vietnam has been accused of giving state firms preferential
treatment and of using vague legal clauses on national security
to justify state actions, such as in land disputes and arrests
of government critics.
"We reserve the right to not commit state-owned enterprises
in the national security and defence sectors," Khanh said.
"Allow me not to give a definition here, as TPP does not
define what are essential security needs."
(Editing by Clarence Fernandez)