Revived TPP will benefit its members without US

While rumours circulate of the US potentially re-joining the Trans-Pacific Partnership, renamed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the UK has also recently expressed wishes to have its name added to the pact.
revived tpp will benefit its members without us
Raymond Mallo

Recent developments

Many observers assumed that the US announcement of its withdrawal from the Trans-Pacific Partnership (TPP) in January 2017 would destroy the agreement. However, in November 2017, economic ministers of the remaining 11 countries – Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore, and Vietnam – met in Danang to agree on core elements of a successive agreement, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

The revised CPTPP suspends several of the most controversial TPP elements – for instance provisions relating to investor-state dispute settlement and intellectual property right protection and pharmaceuticals – that had been strongly pushed by US business interests. The suspension of these provisions has helped alleviate concerns that the agreement would intrude on important areas of national sovereignty.

Details of the revised agreement were finalised in Tokyo on January 23 and released on February 21. A final agreement is expected to be signed at an economic ministers meeting in Chile on March 8, 2018. Once signed, member countries will still need to fulfil national requirements to ratify the agreement. CPTPP will only come into effect when it has been ratified by at least half its members.

The US’ withdrawal substantially reduced the market size and potential benefits to TPP members. Nevertheless, the CPTPP still accounts for about 13.5 per cent of global GDP. Most core elements of the TPP remain unchanged, allowing member countries to invest and trade in goods and services amongst each other with reduced tariffs and standardised trade procedures, including streamlined rules of origin, and provisions on environmental and social safeguards. With some of the most open and outward-looking global economies participating in a high standard agreement, CPTPP has the potential to influence the future development of global trade agreements.

In Vietnam, CPTPP-related reforms should provide increased opportunities for Vietnamese producers to access new markets. Increased trade in services also has the potential to accelerate the integration of Vietnamese producers into global production networks. While the US withdrawal greatly reduces the potential economic benefits to Vietnam, CPTPP membership should still help accelerate growth in Vietnamese productivity, incomes, and living standards.

However, not all sectors and industries of the Vietnamese economy will benefit equally. Some sectors will face increased competition. Thus, the distributional impacts on the economy need to be monitored closely so that timely action can be taken to ensure more equitable distribution of the benefits of increased integration.

Future directions

The CPTPP leaves open the option for additional members to join at a later stage. Broadening the membership base is potentially beneficial for all members. The broader and more perse the CPTPP market, the more significant the potential economic benefits to the region. Indeed, a key indicator of CPTPP success should be requests from other countries to join the agreement.

But the immediate priority for CPTPP members should be to sign the current agreement and finalise domestic ratification procedures so that the agreement can be implemented. It is unlikely that any additional countries will be accepted for membership until sometime after CPTPP commences implementation.

It has been suggested that the US may try to re-join the agreement. Important US businesses argue that they will suffer from being excluded from the process. Newspaper reports suggest that US President Donald Trump might consider re-joining CPTPP if elements of the current agreement were re-negotiated to benefit specific US interests.

However, given that some of the earlier commitments pushed by the US have been suspended, it is hard to see the remaining 11 members now agreeing to additional commitments that are not in the economic interest of the region. While the region as a whole, and Vietnam in particular, would benefit from future US participation in CPTPP, this is unlikely to happen under the current US administration.

Talk about possible UK participation in CPTPP is probably premature. While UK participation may generate some additional benefits, the regional impacts of UK participation would be modest. No CPTPP members currently rank amongst the UK’s top 10 import or export markets. Moreover, the UK may find it difficult to negotiate details of participation prior to its expected exit from the EU in March 2019.

A possibly more likely medium-term scenario would be for other regional countries to join CPTPP. A recent Petersen Institute study estimates that a TPP16 (a CPTPP that includes Indonesia, the Republic Korea, the Philippines, Taiwan, and Thailand) could generate income gains “of $486 billion for member economies”, with gains “higher than in the original TPP”.

In summary, while broadening CPTPP membership should benefit all parties, it is too early to make definitive statements about what new countries might be the first to join an expanded TPP. The immediate focus is likely to be on CPTPP implementation, and on identifying and addressing the potential negative impacts of the agreement with interest groups within national economies.

Identifying and addressing any adverse social impacts of increased integration is important both for equity reasons and to address community concerns about the potential adverse social impacts of economic integration.

Source: VIR

Related News

Import and export turnover increases to US$ 51 billion

Import and export turnover increases to US$ 51 billion

VCN – Import-export turnover in June saw a slight decrease but remained at a high level, the General Department of Vietnam Customs announces.
Preliminary assessment of Vietnam international merchandise trade performance in the first half of May, 2024

Preliminary assessment of Vietnam international merchandise trade performance in the first half of May, 2024

The Vietnam Customs Statistics announced that in the first half (01-15/5/2024) of May-2024, Vietnam’s total exports of US dollars 14.64 billion and imports of US dollars 17.26 billion resulted in a trade deficit of US dollars 2.63 billion. Accordingly, the total value of export and import turnover of Vietnam in the first half of May was US dollars 31.9 billion, went up by 7.7% as compared to the second half of April-2024.
Preliminary assessment of Vietnam international merchandise trade performance in the first 4 months of 2024

Preliminary assessment of Vietnam international merchandise trade performance in the first 4 months of 2024

Highlights 1. According to trade statistics of Vietnam Customs, in April of 2024, a 5.4% downwards in total external merchandise turnover of Vietnam was recorded as compared to the result of March 2024. Exports went down 7.7 %, to USD 31.05 billion and imports decreased 2.9%, to USD 29.99 billion in terms of month-on-month basis. As a result, there was a USD 1.07 billion surplus in Vietnam’s trade balance in this month.
Orders increase, exports in the first 5 months of the year continue to prosper

Orders increase, exports in the first 5 months of the year continue to prosper

VCN - Export turnover to most markets and major trading partners in the past 5 months has recovered well and reached high double-digit growth.

Latest News

Improving the competitiveness of businesses is an important factor

Improving the competitiveness of businesses is an important factor

VCN - Local competitiveness is not only based on economic management capacity, the favorable and friendly business environment and efforts to improve administrative reform efforts of provincial and city governments (PCI) but also relies on the competitiveness of local businesses.
Malaysia to boost exports to Vietnam

Malaysia to boost exports to Vietnam

The Malaysian Ministry of Investment, Trade and Industry (MITI) on July 11 announced that the country has secured potential exports worth 3.3 billion RM (about 717 million USD) to Vietnam.
Exporters advised to update trade policies of Singapore

Exporters advised to update trade policies of Singapore

The Vietnam Trade Office in Singapore has advised Vietnamese exporters to carefully study and keep updated on new regulations in Singapore, a market that is becoming more cautious in trade policy, in order to further exploit this market.
Green logistics – a key for sustainable development

Green logistics – a key for sustainable development

Green logistics development is no longer a trend, it is an inevitable requirement with activities throughout the stage of purchasing raw materials, production, distribution, delivery, waste treatment - throughout the entire business life cycle.

More News

Manufacturing enterprises need to adapt to trends to develop: experts

Manufacturing enterprises need to adapt to trends to develop: experts

Besides the factors of price, product quality and delivery time, green and sustainable development are competitive criteria that more and more markets are requiring from suppliers in Ho Chi Minh City as well as across the country.
Rubber exports grows sharply in June

Rubber exports grows sharply in June

VCN - According to Import – Export Tax Department (Ministry of Industry and Trade), Vietnam's rubber exports in June 2024 reached about 150 thousand tons, worth 238 million USD, up 77.6% in volume and 76.6% in value. Price compared to May 2024.
Prioritize stimulating domestic consumption to promote economic growth in 2024

Prioritize stimulating domestic consumption to promote economic growth in 2024

VCN - According to General Director of the General Statistics Office Nguyen Thi Huong, in the context of many difficulties in the world economy, the export growth rate is slowing down, many businesses are facing a shortage of orders..., priority should be given to stimulating demand. Domestic consumption is considered an important solution to promote economic growth in 2024.
Exports fruit and vegetable expects to exceed US$ 7 billion

Exports fruit and vegetable expects to exceed US$ 7 billion

VCN - In the first half of 2024, fruit and vegetable export turnover reached nearly US$3.5 billion. Key markets recorded an increase of 10-50% over the same period in 2023. This is also the industry that holds the leading position in exports of agricultural products.
Việt Nam, Philippines agree to establish a rice industry alliance

Việt Nam, Philippines agree to establish a rice industry alliance

Agriculture ministers of Việt Nam and the Philippines agreed to establish a rice industry alliance between the two countries and upgrade the trade relationship into an investment partnership.
"Good oppotunities" for export to Asia - Africa markets

"Good oppotunities" for export to Asia - Africa markets

VCN - The Asia-Africa region is always an important market for Vietnam. These are two markets considered suitable for Vietnamese goods, including the Red River Delta, to expand their market share in the near future.
Ample space for Vietnam to boost exports to the US, experts

Ample space for Vietnam to boost exports to the US, experts

Vietnamese exports to the United States (US) such as computers and parts, electronics, machinery and equipment, garments and footwear have ample room to grow, according to trade experts.
High quality, low-emission rice project's pilot model in Mekong Delta yielded positive results

High quality, low-emission rice project's pilot model in Mekong Delta yielded positive results

A pilot model for planting millions of hectares of high-quality, low-emission rice in the Mekong Delta has yielded positive results, including reducing the amount of seed and fertiliser used, lowering carbon dioxide (CO2) emissions while increasing profits.
Export of denim fabrics quickly recovers

Export of denim fabrics quickly recovers

VCN - The export market for Vietnam's denim products (the fabric used to make jeans) has experienced a swift recovery and positive growth potential. To anticipate this trend, businesses are actively investing in and expanding their factories to enhance production capacity and meet market demands.
Read More

Your care

Latest Most read
Improving the competitiveness of businesses is an important factor

Improving the competitiveness of businesses is an important factor

VCN - Local competitiveness is not only based on economic management capacity, the favorable and friendly business environment and efforts to improve administrative reform efforts of provincial and city governments (PCI) but also relies on the competitive
Malaysia to boost exports to Vietnam

Malaysia to boost exports to Vietnam

The Malaysian Ministry of Investment, Trade and Industry (MITI) on July 11 announced that the country has secured potential exports worth 3.3 billion RM (about 717 million USD) to Vietnam.
Exporters advised to update trade policies of Singapore

Exporters advised to update trade policies of Singapore

The Vietnam Trade Office in Singapore has advised Vietnamese exporters to carefully study and keep updated on new regulations in Singapore, a market that is becoming more cautious in trade policy, in order to further exploit this market.
Import and export turnover increases to US$ 51 billion

Import and export turnover increases to US$ 51 billion

VCN - In June, Vietnam’s total import and export turnover declined 1.3% month-on-month to US$ 64.12 billion.
Green logistics – a key for sustainable development

Green logistics – a key for sustainable development

Green logistics development is no longer a trend, it is an inevitable requirement with activities throughout the stage of purchasing raw materials, production, distribution, delivery, waste treatment - throughout the entire business life cycle.
Mobile Version