TPP still of value to Vietnam

Trade with other members may be possible, conference hears, and there are other trade options available if TPP does not go ahead.

“It is too early to talk about the impact on Vietnam if the TPP collapses but it can still find true value from the agreement,” Professor Pham Tat Thang from the Vietnam Institute for Trade (VIT) told the “Vietnam’s Trade Development in the 2016-2025 period” conference. 

The conference was held by VIT, under the Ministry of Industry and Trade (MoIT), and the European Trade Policy and Investment Support Project in Hanoi.

The TPP, according to Professor Thang, is not just an international trade agreement that focuses on exchanging, buying and selling goods. “It is also considered a platform for the implementation of comprehensive social development goals,” he said.

US President-elect Donald Trump announced on November 21 that the US will withdraw from the TPP on the first day of his presidency and instead pursue free trade agreements (FTAs) on a bilateral basis.

If the TPP continues without the US, according to Professor Tran Xuan Quang from VIT, Vietnam will still benefit from trade with other partners. The TPP still has value for Vietnam because it will contribute towards positive changes in its business and investment climate in the future.

“Vietnam’s business and investment climate still has a number of shortcomings and more renovation is needed,” said Professor Quang. “The TPP, therefore, is a mirror for Vietnam to look into and adjust itself for improvement.”

It’s agreed that the Regional Comprehensive Economic Partnership (RCEP) is an important agreement that could replace the TPP. “Once approved, the RCEP is expected to boost Vietnam’s exports and imports,” Mr. Tran Thanh Hai, Deputy Head of the Export and Import Agency at MoIT, told the gathering. 

“The RCEP is in its 14th negotiation session and will also contribute to promoting investment flows from developed countries to developing countries and to the full integration of economic activity in the region,” he said.

Trade continued to see steady growth this year, with export turnover reaching US$178 billion and import turnover US$176 billion. “Exchange rate fluctuations in the Chinese yuan have not greatly affected Vietnam’s trade position,” said Mr. Hai. “Growth is approximately 8%.”

Vietnam’s trade in 2017 will see new fluctuations from trade agreements already signed. The RCEP will be Plan B but the TPP remains Vietnam’s main focus, said Professor Quang.

Mr. Pham Hong Hai, CEO of HSBC Vietnam, said previously that too much focus is being given to the possibility that the TPP will not proceed and many have forgotten that negotiations over other FTAs are ongoing. 

A bigger deal is the FTA of the Asia Pacific (FTAAP), he said, an initiative nurtured for 20 years by APEC that links 21 economies around the region, including China and the US.

“With or without the TPP, the US is still a very important trade partner of Vietnam and Vietnamese businesses need to watch movements closely while retaining a spirit of going forward, to take advantage of all the agreements that are in the pipeline,” Mr. Hai said. “Building a strong domestic market is something we need to do in parallel.”

Minister of Industry and Trade Tran Tuan Anh said in November that Vietnam is unlikely to meet the 10% export growth target for this year. Vietnam's total export value in the first ten months reached US$143.9 billion, a year-on-year increase of 7%, according to the General Department of Customs. 

Of this, the export value from foreign-invested firms stood at US$100.8 billion, up 10% year-on-year.