What can the CPTPP trade agreement bring to Vietnam?

Update: 10:56 | 06/02/2018
With Comprehensive and Progressive Agreement for Trans-Pacific Partnership - CPTPP (the former TPP), Vietnam will miss many benefits it once expected to get because the country still doesn’t have an FTA with the US, while it has multilateral and bilateral FTAs with most CPTPP member countries.
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Eleven TPP countries said they have completed negotiations for CPTPP, or TPP 11, after they unexpectedly reached consensus at a trade officials’ meeting in Tokyo on January 23. The agreement is expected to be inked on March 8 in Chile.

The National center for Socio-economic information and forecast (NCIF) estimated that with TPP, Vietnam’s GDP may gain an additional 6.7 percent GDP growth and another 15-17 percent export growth rate. 

what can the cptpp trade agreement bring to vietnam
CPTPP is expected to be inked in March. (Photo: Vietnamnet)

Meanwhile, with TPP 11, the figures would be 1.32 percent and 4 percent, respectively. CPTPP would lead to an import increase in 3.8 percent, while TPP would be 10.5 percent.

Vietnam can expect from the CPTPP will be smaller than from TPP. However, analysts say the benefits would still be significant.

CPTPP will help Vietnam boost trade with Canada, Mexico and Peru, which don’t have FTAs with Vietnam.

Meanwhile, some countries such as South Korea, Taiwan, Thailand, Indonesia and the Philippines have shown their willingness to join the trade pact. 

Bloomberg commented that without the US, CPTPP will still be significant. The expansion from 11 to 16 member countries will significantly increase the economic benefits to members. 

The Peterson Institute for International Economics (PIIE) estimated that the expansion would triple the economic benefits to member countries to $500 billion a year, bigger than the initial trade pact can bring. 

The impetus will come from the combination of three advanced economies: Japan, Korea and Taiwan, among which there is still no FTA. In addition, the supply chains throughout Asia also enjoy positive effects.

Sources said the UK last month organized an unofficial talk to discuss joining CPTPP after its withdrawal from the EU.

At the World Economic Forum in Davos, US President Donald Trump left the possibility of re-entering the pact that they initiated themselves.

Meanwhile, in Vietnamese analysts’ eyes, besides measurable economic benefits, CPTPP will also bring ‘uncalculated benefits’, especially institutional reform.

“It (CPTPP) will promote the institutional reform, that is important. It creates competitive pressure on both businesses and the economy so that we can have more sustainable growth,” said Minister of Industry and Trade Tran Tuan Anh.

The issue on labor and trade unions is an example. Le Dinh Quang from the Vietnam Labor Federation said once in the New York Times: “That is a very big challenge for us, but due to the national benefits and the integration with the world, and also the rights and benefits of labor, we have to find solutions.”

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(Source: Vietnamnet)