The Trans-Pacific Partnership (TPP) agreement, whose fate seems uncertain after the US’ withdrawal, will certainly continue in another form, the Vietnam Chamber of Commerce and Industry (VCCI) has said.
“We believe that TPP member countries, even the US, don’t want to waste the six years of negotiation and the large opportunities the trade deal would bring,” Vu Tien Loc, chairman of VCCI, told reporters last week.
“The TPP will certainly continue. It could be a bilateral or multilateral trade deal,” he said, adding that it, however, may come into effect at a later date than previously scheduled, which was 2018.
Vietnam has a lot of expectations from the TPP and the European Union-Vietnam Free Trade Agreement (EVFTA) as they open large markets and create significant opportunities for trade growth and for improving domestic economic institutions.
The fate of the TPP became uncertain in January after US President Donald Trump signed an executive order formally withdrawing the US from the 12-nation trade deal on his fourth day in office.
In 2016, the US was Vietnam’s largest export market, bringing in revenue of US$38.5 billion, a 15% rise over the same period last year, customs statistics showed. The US has maintained this position in the first two months of 2017, with the turnover rising by 18.9% compared to the same period last year, to US$6 billion.
With the TPP on shaky legs, Vietnam is now looking more towards the EVFTA, which is expected to come into force in 2018.
Vietnam should focus on three measures to grasp opportunities from the EVFTA, which include hastening the signing and approval of the EVFTA, continuing institutional reforms, and improving its competitiveness and business environment, Loc said.
The trade deal will help connect the Southeast Asian country of nearly 90 million people to the European Union (EU), which has an estimated population of 500 million. The market size would be nearly 1 billion if the ASEAN markets are included.
Vietnam’s export to the EU in the first two months of 2017 reached US$5.4 billion, up 13.2%, while import from these markets rose by 24.6% to US$1.7 billion.
To date, Vietnam has signed 12 bilateral and multilateral trade deals, 10 of which have already come into force. Four other Free Trade Agreements (FTAs) are under negotiation, including the Regional Comprehensive Economic Partnership, ASEAN-Hong Kong FTA, FTA with Israel and with European Free Trade Association.