Vietnam has wisely not put all of its eggs in TPP basket

In framework of Midterm Vietnam Business Forum, 2017 (VBF), numerous think-tanks as well as faces from business organization, companies… contribute ideas for improving Vietnam economy, in climate of international challenges.

Mr. Fred Burke, Head of Investment and Trade Working Group of the Forum has mentioned one challenge for Vietnam today. That’s how  to  respond  to  the unexpected  withdrawal  of  the  United  States  from  Trans-Pacific Partnership Agreement (TPP) -one  of  the  biggest  and  most  important multilateral trade agreements since the WTO was founded.

The deal was hailed as a 21st century multilateral trade agreement  that  would  produce  significant  income  gains  for  each  of  its  12  signatory  member states. As the only developing country in the 12 nation group, Vietnam had a lot to gain  –the biggest proportional boost to its GDP of all of the TPP countries, according to the best analysts. TPP  was  seen  as  the  next  logical  step  in  Vietnam's  amazingly  successful  20  year  long  global economic  integration  strategy,  following  on  its  2007  accession  to  the  WTO  and  many  other bilateral and multilateral trade agreements before that.

According to Mr. Fred Burke: “Vietnam has wisely not put all of its eggs in the TPP basket. In fact, we can say that Vietnam has  not  just  a  "Plan  B",  but  also  a  plan  C,  D,  E  and  F.  Vietnam  is  a  shining  example  of  the potential benefits of global trade.  It  has developed quickly from a state  of having virtually no trade  in  1990,  to  become  one  of  the  world  most  significant  top  exporters  of  garments  and footwear, sea products, key agricultural products such as rice, coffee and spices, furniture, and more recently even electronic products and software.”

Below are some additional plans of Vietnam ahead of the TPP without U.S:

Plan B is the Trade Facilitation Agreement. This is the only multilateral agreement in the Doha Round of negotiations under the WTO that has been successfully signed, ratified and entered into force, which it did as of February 22, 2017.

Plan  C for  Vietnam  will  include,  first  and  foremost,  continuing  to  implement  its commitments  and  the  2007  WTO  accession  agreements.

Plan  D is  continuing  to  implement  the  objectives  reflected  in  the  ASEAN  Economic Community agreements with the nine other ASEAN nations.
Plan E including pushing the Vietnam Free Trade Agreement (EV FTA), “TPP-11” (TPP without U.S), RCEP -  a  massive  trade  block  which  would  include  China  and  India  as  well  as  most  of Southeast  Asia  and  Australia,  but  not  the  United  States; as well as other pending agreement. Plan  F involves  continuing  the  domestic  economic  and  administrative  reforms  that  Vietnam needs to maintain competitiveness and build to reduce poverty and rise up to the next level of economic development, these include administrative procedure reforms to make the role of the state  more  supportive  in  nurturing  industries  to  compete  in  the  global  stage,  investing  more efficiently  in  infrastructure,  and  equitizing  state  owned  enterprises  to  reduce  the  amount  of capital that they drain out of the economy.

Last but not least, Fred Burke mention a special solution for Vietnam. The Plan G is about a bilateral trade agreement between Vietnam and U.S. Even as the US withdrew from the TPP, Apparently  the  thinking  in  the  new administration is that it will have more negotiating leverage and be able to secure a better deal for itself with bilateral agreement. Considering the substantial trade deficit that the US suffers in its  trade  with  Vietnam,  at  least  in  terms  of  trade  in  goods,  it  is  understandable  that  American business interests will ask for increased market access as part of the FTA deal and the Trump administration will want to show immediate export gains for the US. “Vietnam can turn this into an  opportunity  to  accelerate  the  phase  ins  for  its  reciprocal  market  access  in  the  US  market”, Fred Burke said.

June 18, 2017

Source: HanoiTimes

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