‘It’s still very early to predict the future of TPP.’
Vietnam will stay competitive and its economy will still thrive if the Trans-Pacific Partnership (TPP) deal collapses, its trade minister said, as doubts hang over the future of a pact that was core to the Obama administration’s “pivot” to Asia.
Vietnam’s manufacturing and exports-led economy is widely regarded as the biggest potential beneficiary of the TPP, but the deal now looks on the rocks following the presidential election win of Republican Donald Trump, who during campaigning took a protectionist stance on a deal he called a disaster and killer blow for American jobs.
“It’s still very early to predict the future of TPP,” Trade Minister Tran Tuan Anh was quoted saying by the government news website on Friday, “but regardless, we are always ready for integration, not just because of TPP, but because it is a requirement and also a motivation of development,”.
“If TPP is implemented smoothly, our economic opportunities and competitive sectors like textiles, seafood and shoes will definitely benefit … but if not we still have world markets; these sectors will still be competitive,” Tuan Anh said.
Vietnam has been Southeast Asia’s free-trade trailblazer, pursuing tariff-slashing deals with its biggest markets and sources of investment, including South Korea and the European Union, as well as existing agreements via the Association of Southeast Asian Nations, such as an ASEAN-China FTA.
If passed, the TPP, dubbed a mega-regional accord, would cover 40 percent of the global economy and create a trade zone worth about $28 trillion among 12 countries that include the U.S., Japan, Australia, Canada, Malaysia and Mexico.
The deal looked set to sail through legislatures when it was concluded last year, but the run-up to the U.S. presidential election put ratification on ice in Washington and prompted other countries to put their legislative approvals on hold too.
The Obama administration saw TPP as a means of keeping China’s economic power in check. China is not among the members and has proposed its own parallel deal, the Regional Comprehensive Economic Partnership (RCEP), of which Vietnam will be a part.
Vietnam has been receiving record foreign investment and expansion by firms into the country, often as a cheaper alternative to China, buoyed by the prospect of a cost-cutting TPP.