How the Trans-Pacific Partnership benefits Vietnam’s economy

An article in Thanhniem News (March 28, 2016) titled “How the Trans-Pacific Partnership benefits Vietnam’s economy” (http://www.thanhniennews.com/commentaries/how-the-transpacific-partnership-benefits-vietnams-economy-60650.html) describes the impact that the TPP will have on Vietnam’s future growth. Three main benefits are analyzed: 1) Large trade volumes with the US and Japan, 2) Competitive manufacturing environment, and 3) Tariff cuts of key export and import products. It is expected that thanks to the TPP, Vietnam’s total export will increase by USD 68 billion by 2025, and that the Foreign Direct Investment to Vietnam will reach around USD 20 billion by 2020. As the TPP agreement is implemented, key export manufacturing sectors such as textile & garment, footwear and fishery will enjoy rapid growth. How will lead industry players define strategies to capitalize on Vietnam’s manufacturing sector as the Asian country boosts its economic growth thanks to the TPP?

 

An Experienced Ally

In a recent article in the Nikkei Asian Review, the subject of counterfeit goods under the TPP deal is discussed, specifically, goods that are produced and imported into Vietnam. Japan has stepped in to help Vietnam bolster their copyright protections and reduce the amount of ‘knockoff’ products. All of this is part of an effort to help emerging economies like Vietnam, comply with the new rules of intellectual property under the TPP. Japan also plans to help countries such as Malaysia. What can Japan do to help Vietnam? In what ways will this help Vietnam’s economy? In what ways may it hurt Vietnam’s economy?

The TPP, Trump’s wall, and Mexico

In the article “TPP May Hamper Mexico’s Apparel Industry” (http://news.apparelresources.com/trade-news/tpp-may-hamper-mexicos-apparel-industry/), the complex relationship between the TPP, the United States, and Mexico is examined. It is important to understand the current U.S.-Mexico relationship; last year the US exported “6.5 billion of apparel and textile to Mexico… $4 billion was fabric and $1.2 billion apparel parts”. There was also “$665M of textiles and yarn”, based on AAFA data. Likewise, Mexico sent “$4.5 billion to the U.S., about $3.5 billion of which was apparel and #1 billion textiles”. With such a successful relationship, what it happening? Upon inspection it appears that Mexico’s apparel “kryptonite” may be Vietnam. According to the article “eighty products is nothing compared to the 1,300 textiles categories that could be affected by this arrangement”. The second major hurdle for Mexico is Trump’s proposed US-Mexico wall. Mexico estimates that “$11 billion in trade flows could fall 20%, or $2.2 billion, in the wall’s first year”. What can Mexico do to elevate their apparel potential? Is it possible to form another deal with the US? What other potential avenues can they take to better their economic performance?

TTIP and TPP – A Threat to Latin America?

An article in EconoMonitor (March 21, 2016) titled “TTIP & TPP – A Threat to Latin America?” (http://www.economonitor.com/blog/2016/03/ttip-tpp-a-threat-to-latin-america/) analyzes the impact that the new regional mega-deals will have on different Latin American economies. For years, most Latin American countries have supported their economies on exporting commodities and natural resources. To face the risk that commodities’ prices are variable, these countries have implemented import-substitution industrialization policies, which mean high tariffs to protect domestic industry and discourage imports. With the TPP, it is expected that Peru takes the most advantage of this deal since the agreement could lead to a 2.4% increase in real income. On the other hand Chile and Mexico already have deep trade agreements with most of the TPP members, preventing them from expecting a relevant impact in their economies thanks to the latest commercial deal. Mercosur countries, which are not involved in the TPP agreement, such as Brazil and Venezuela are currently facing economic crisis that need them to reevaluate their access to international markets and enhance their integration in global value chains. Will the TPP members allow any Mercosur country to join the deal in the coming years? How can Chile and Mexico leverage their current position as members of the TPP deal?

 

Trade minister: TPP dead and ‘buried’ if Trump becomes US president

An article posted on March 21st, 2016 in the Malay Mail Online, http://www.themalaymailonline.com/malaysia/article/trade-minister-tpp-dead-and-buried-if-trump-becomes-us-president, states that the Trans Pacific Partnership (TPP) will likely end if Donald Trump becomes the next US President and the world superpower opts to withdraw from the trade deal. Malaysian International and Industry Minister Datuk Seri Mustapa Mohamed believes that the trade deal would be ineffective without participation from the US seeing as it is the world’s biggest economy. According to Mustapa, “We don’t want to make a prediction but if Congress doesn’t agree with the TPPA, then TPPA will be buried because section 30 of the TPPA needs the participation of the US because they are the world’s largest economy, with 20 per cent of the global economy,” and “So when we negotiate TPPA without the US, then it’ll be less effective and have less meaning.” He also stated that Malaysia will not agree to the TPP if the United States seeks to push through any amendments to the current proposal. Donald Trump has already shown his feelings about the TPP, reportedly calling it the “biggest betrayal” of Americans, and claiming that the deal will result in job losses to US countrymen from massive work outsourcing. No one is certain who will win the United States Presidential Election this year, but it is very apparent that it will have a huge impact on Malaysia and all of the 12 countries involved in the TPP.

Do you think that the TPP will be buried if Donald Trump is elected president? Do you think that the US will back out of the TPP if Donald Trump is elected president?