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South Korea businesses dejected with TPP’s rejection

With the US President-elect Donald Trump’s saying he would reject TPP on his very first day in office, it has had a cascading effect. Business houses in South Korea who were looking forward to Vietnam’s ratification of the Trans-Pacific Partnership (TPP) are dejected and deeply disappointed.

The country is Vietnam’s largest provider of foreign direct investment (FDI) and the latter was poised to be one of the biggest gainers from the US-led trade deal involving 12 Pacific Rim nations. Though South Korea was not among the 12, the deal’s failure has hit the country’s industry and companies that have been struggling to maintain growth amid declining entrepreneurship and innovation.

South Korea’s largest business conglomerates, its famous chaebol, are long-term investors in Vietnam. They are attracted by low wages and the possibility of free trade with Asean members and TPP countries. However, the government of Vietnam has announced it will delay ratification of TPP, taking a wait-and-watch approach.
Indeed, Vietnam’s decisions first to join the deal and then delay ratification gave South Korean business houses a roller-coaster ride and a lot of companies rescheduled their investments, says Kim Bu-heung, leader of the international cooperation team at the Korea Federation of Textile Industries (KOFOTI) in Hanoi said.

 
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