HANOI — Vietnam, buoyed by a revived Trans Pacific Partnership (TPP) trade pact and a regional trade agreement dominated by China, is in the box seat in an outlook driven by investment and growth . . . .
THE Trans-Pacific Partnership (TPP) — feared to have floundered after President Donald Trump withdrew U.S. support earlier — gained a second wind at November’s Asian Pacific Economic Co-operation (APEC) meeting in Da Nang. The remaining 11 nations agreed to press on with expanded trade and investment programmes.
“Vietnam is in the box seat right here. It desperately wanted the TPP,” Carl Thayer, a defence analyst with Australia’s University of New South Wales, told ATI.
The revived TPP, now termed the Comprehensive and Progressive TPP after intervention by Canada, is undergoing fresh talks towards a final agreement. The TTP’s 11 nation members would include Australia, Chile, Japan, Malaysia, Mexico, New Zealand, Peru and Singapore.
Vietnam was considered a winner under the earlier TPP pact, with World Bank forecasts that, by 2030, economic benefits would add about 8.0 per cent to its GDP.
The key industries to gain from TPP were textiles and garments and global supply chain operators, as in telecommunications, taking advantage of Vietnam’s close proximity to regional economic giant China.
Vietnam is also a member of the China-dominated Regional Comprehensive Economic Partnership (RCEP), which is centred on the 10 ASEAN nations and countries with free trade pacts with ASEAN — Australia, China, India, Japan, South Korea and New Zealand.
“Vietnam can follow (the TPP) path and it can follow RCEP, which China is espousing, at the same time — it is not mutually exclusive,” Thayer said.
But Pavida Pananond, a Professor of International Business Studies at Thailand’s Thammasat University, says that, without the U.S. role in TPP, China influence over Vietnam’s trade profile has risen.
Pavida, told ATI said while the “size of potential gains from trade and investment may be reduced for Vietnam, [in the absence of the U.S.] it remains attractive as the only member in Asia with relatively low costs and a large growing market”.
She said that, despite the revised TPP agreement, Vietnam would remain “significant” in its overall standing in intra-regional trade and investment in Asia.
Vietnam’s economic outlook has risen in recent years. “The near-term outlook is positive,” the United Nations reported in its annual economic and social survey for Asia and the Pacific (UNESCAP). The UN has projected Vietnam’s growth at 6.5-6.7 per cent over 2017 and 2018.