October 12, 2015

"On Monday last week, trade ministers from 12 countries announced that they had completed negotiations for the Trans Pacific Partnership agreement (TPP), which had taken several years. The TPP text will not be officially released for some time, but we can already make some immediate assessments of TPP's impact, particularly on the Asean countries (my comments on TPP made to Channel News Asia are available here).

Of the Asean countries in the TPP, Brunei, Malaysia, Singapore and Vietnam, Vietnam was the big winner.  Vietnam had already just concluded a free trade agreement (FTA) with the EU, which would make it the only Asean country (other than Singapore) to have an FTA with Europe, the US (through the TPP) and of course in Asia through the Asean Economic Community (AEC) agreements and the Regional Comprehensive Economic Partnership (RCEP) talks. This will give major competitive advantages to Vietnamese exports. Vietnam had to sign off on a 'side letter' on labour rights, as did Malaysia and Brunei, which offer the possibility that a TPP partner (e.g., the US) could withdraw the tariff privileges, but the history of such side letters indicates that this is not likely. Side letters are usually used to placate domestic legislative concerns during the ratification process (e.g., the US). Although Vietnam and other TPP partners will have new state-owned enterprise (SOE) commitments under the TPP, Vietnam's SOEs are not as dominant in the Vietnamese export markets as is the case with China's SOEs, and so are not as affected as China would be under the TPP."

Read more:

http://www.establishmentpost.com/tpps-impact-asean/

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