After the US withdrew from the Trans-Pacific Partnership agreement, Ministers of 11 TPP members reached an agreement on a new deal called Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Vietnam expects to benefit from the new agreement once it takes effect. Vietnam may not gain much from CPTPP, when compared to the original agreement but analyst say the new deal will open up significant opportunities for the country to cooperate with the world’s leading economies.
It can expand export markets with Canada, Mexico, Peru and Chile — with whom Vietnam has not signed trade agreements. Vietnam’s garments, leather and footwear exports and several other labour-intensive industries are forecast to increase. Nguyen Dinh Cung, Director of the Central Institute for Economic Management (CIEM), is positive, “It’s obvious that without the US there will be fewer advantages. But Vietnam still can penetrate major markets like Japan, its 5th biggest trading partner and 3rd biggest investor and Australia, a potentially strong market for Vietnam’s farm produce.”
Economist Vo Tri Thanh is of the view that the deal will be favourable to a state governed by law with a transparent investment and business environment and a driving force for development. “20 of about 50 clauses of the initial TPP agreement are temporarily frozen. Under the CPTPP agreement, quality must be ensured and attached to the reform of institutions and policies, the most important factors in boosting growth quality and promoting inclusive growth,” He said.
The TPP is estimated to cover 40 per cent of world’s GDP and 30 per cent of global trade, the CPTPP will cover only 14 per cent of world GDP and 17 per cent of global trade. But the challenges Vietnam will face will be the same.
