Ho Chi Minh City, Vietnam – Vietnam, with its strong export-led economy and potential for growth, is tipped to significantly benefit from the Trans-Pacific Partnership (TPP).
The country expects revenue to increase by as much as 50 percent when tariffs are applied under the 12-nation trade deal.
Keep readinglist of 4 items
“Vietnam wants to have an open economy,” says Tran Du Lich, a former government trade adviser.
“We have been integrating with international and regional economies, with a number of free trade agreements.”
However, the TPP is in doubt due to opposition in the US.
President Barack Obama has been trying to push the deal through before the end of his term in January.
If he runs out of time, prospects for the deal’s success are dimmer because the two main candidates to replace him oppose the agreement.
US presidential candidate Hillary Clinton has voiced her opposition to the trade pact during her campaign.
“I will stop any trade deal that kills jobs or holds down wages, including the Trans-Pacific Partnership. I oppose it now, I’ll oppose it after the election, and I’ll oppose it as president,” Clinton said.
Door open for China
If the US Congress does not ratify the agreement, it will effectively collapse.
If the TPP does not happen, it could leave the door open for China to forge closer economic ties with some member nations.
In this region, that could undo a lot of President Barack Obama’s so-called pivot to Asia.
The United States and China are vying for influence in the region, and Vietnam is a key factor.
Despite strained political relations between Vietnam and China, the two countries are big trading partners.
China is not part of the TPP. If the pact fails, Vietnam may become even more reliant on its neighbour to the north.
Analysts believe the Vietnamese economy will continue to grow regardless.
“TPP will be good for Vietnam, but that doesn’t mean the economy in the future depends on it,” says Lich, the former government adviser.
“We’ve ratified more than 10 Free Trade Agreements, and we are a member of the World Trade Organization.”