Will Investor State Dispute Settlement clauses in TPP undermine Vietnamese Sovereignty?

An article titled “The Devastating Impacts of the TPP Trade Deal on Vietnam” dtd. Nov 13, 2015 by Chuck Searcy on Globalresearch.ca (http://www.globalresearch.ca/te-devastating-impacts-of-the-tpp-trade-deal-on-vietnam/5487939) explains how Vietnam is putting itself in danger of lawsuits from corporations. As per the ISDS provisions, disagreements among parties and Vietnamese government will not be settled in Vietnamese court, but a panel of judges chosen by Vietnam and corporations. The author is concerned that the threat of legal suits could affect Vietnamese laws regarding environment, health, education, military etc. and the threat of ISDS may force Vietnam to open its defense, security and public interest market (where it currently has prohibitions in place) to foreign multinationals, thereby jeopardizing its sovereignty. Is the author presenting this as a regular while this would be an extreme case? And won’t an organization using ISDS against a government send wrong signal about the organization to other TPP partners? What other grievance settling measures can be used?

 

TPP forced Labor unions a good news or bad news?

An article by Kenneth Kim titled “What the Trans-Pacific Partnership Means For Investing In Vietnam” (http://www.forbes.com/sites/kennethkim/2015/11/07/what-the-trans-pacific-partnership-means-for-investing-in-vietnam/#60ac42c97733, dtd. Nov 7, 2015) comments on the forced creation of Union rights for Vietnamese people. While agreeing that Vietnam is perhaps the biggest gainer in the deal and that the deal will fast track its economy (which is currently is a very good shape) to be among top 20 soon, he also mentions concern of some groups that by forcing creation of union rights, we are taking away Vietnamese Sovereignty. The author also mentions about the concerns that unionized labor in Vietnam will be ineffective and would be ignored in the name of profits. The author dismisses these concerns by taking example of China, which despite being a communist country, has strong provisions for unionization of workers. The author states that unionized workers in China earn more and work lesser hours than their non-unionized counterparts. Will unionization of workers have intended effects for Vietnam? And would the results seen in China be replicated in Vietnam?

 

Trans Pacific Partnership impacting Vietnamese Pharma industry?

An article titled “How might the TPP impact Vietnamese pharma?” dtd Oct 29, 2015 (http://www.vir.com.vn/how-might-the-tpp-impact-vietnamese-pharma.html) explores how TPP might make the situations difficult for Vietnamese Pharma industry. The article mentions how the stricter Intellectual Property Rights protection clauses may delay the entrance of generic drugs in the Vietnamese market. The result would be higher cost of essential drugs in a country where insurance plans do not have a high reach and drug prices are a sensitive issue. Also, stricter rules regarding data exclusivity, patent linkage and lower patentability criteria would mean less access of data and formulae to generic drugs manufacturers leading to delay in development of generic drugs. What impact will this have on Vietnamese population? Will this be a rise for the insurance companies in Vietnam? Will this impact the Vietnam’s cost of living and consequently take away the benefits of Vietnam’s low costs?

 

Singapore the largest indirect beneficiary of TPP?

An article titled “10 benefits the Trans-Pacific Partnership will bring Singapore” (published in The Strait Times, dtd 11/16/2015 by Chia Yan Min http://www.straitstimes.com/business/economy/10-benefits-the-trans-pacific-partnership-will-bring-spore) explores the impact of TPP on Singapore. The article notes that the direct impact of TPP on Singapore will be marginal and only 2 new markets, viz. Mexico and Canada will open up. The article notes that the Singapore will benefit more indirectly from the deal. Firstly, the deal, which includes countries with 40% of world GDP and 1/3rd of the world trade would mean a boost of trade among these countries. Singapore, with its logistics and financial infrastructure would be the beneficiary of the trade and financial services. Moreover, the trade boost in ASEAN and removal of equity restrictions would mean higher penetration of Singapore based consulting services for both companies expanding in South East Asia and Government services. But would economic opening up of borders between these countries signal a danger sign for Singapore based companies? Would these services, which are touted to be game changers for Singapore, not shift entirely to other countries like Viet Nam or Malaysia? And considering some protection provided to smaller TPP nations in regards to local content, how much will Singapore actually benefit?

The Macro Economic tool ignored by TPP

With the finalization of TPP, all the partners face an uphill task of passing the agreement in their respective structures. While countries like Vietnam, Malaysia etc. will have no issues ratifying the agreement, the US faces a daunting task. Jeff Spross in his article “The Trans-Pacific Partnership’s biggest failure” published in The Week, dtd. 11/6/2015 (http://theweek.com/articles/587248/transpacific-partnerships-biggest-failure) notes that the TPP agreement does not offer any protection against currency manipulation. The author is concerned that as a result, devaluation of the currency of partner country could potentially lead to trade imbalances and changes in trading volume. The rising value of dollar against other currencies has led to a huge trade imbalance for US and could be a potential boon to Vietnam and Singapore. The article points out that US has indeed had this issue in the past with Japan, Malaysia and Singapore, all partners in TPP. Does this represent not only a risk for US, but also all the other countries? And if this scenario becomes true, what effect will it have on the trade in the future? Considering the impact of currency manipulation in China on the world, how would a currency manipulation affect non TPP countries?

The US-VN Plan for Enhancement of trade and labor relations

There has been some time since the TPP full text has been in the public view. If we look closely, there is a separate section for labor relations with Vietnam (https://ustr.gov/sites/default/files/TPP-Final-Text-Labour-US-VN-Plan-for-Enhancement-of-Trade-and-Labor-Relations.pdf), Malaysia and Brunei. Of all three, Vietnam is the most expansive plan clearly signaling how important Vietnam is to US for trade deals. In many blogs, there has been criticism of current Labor practices in Vietnam and also the supposed US soft stand on those issues(Article credit: “After Trans-Pacific Partnership Text Released, Labor Advocates Say Human Rights Protections ‘Not Enforceable’”, by Abigail Abrams, 11/05/15 http://www.ibtimes.com/after-trans-pacific-partnership-text-released-labor-advocates-say-human-rights-2171278). But if we see from a normal standpoint (I am not commenting on the legality of the agreement or enforceability), TPP can usher in a bevy of reforms in Vietnam. The agreement calls out for a variety of reforms, especially for formation of labor unions, their autonomy and effectiveness, formation of ministry and department of labor, abolishment of forced or debt labor, provide capacity for labor department, child labor and the implementation of the same. Also, Vietnam will have to be transparent on its budget, inspection and status of unions. Most of these articles need to be implemented by the time TPP is in force. Only one article regarding enactment of laws for formation of labor unions across enterprises and verticals has to be implemented in five years, which is currently being contested by International Labor Organizations. However, is getting in 90% of reforms better than having nothing at all? Can the pressure of having these reforms be considered a violation of Viet Nam’s sovereignty? And which courts will the violations be addressed in?

 

Vietnam Labor relaxations a good sign for TPP?

As the full text of TPP was released last week, we got a glimpse of the treaty’s contents and following implications. As seen before, there are many concerns regarding the alleged labor conditions in Vietnam and concerns from labor and human rights groups on including Vietnam in the treaty. Sure enough when the text of the TPP was released, many Labor advocates has doubted the enforce-ability of reforms in Vietnam from a legal point of view (Article credit: “After Trans-Pacific Partnership Text Released, Labor Advocates Say Human Rights Protections ‘Not Enforceable’”, by Abigail Abrams, 11/05/15 http://www.ibtimes.com/after-trans-pacific-partnership-text-released-labor-advocates-say-human-rights-2171278). Many labor organizations have an issue with Vietnam being given five years to comply with full labor standards before sanctions can be leveled against it. Many democrats have already criticized the agreement for respites given to Vietnam. What does this mean for Vietnam? Would this be one of the critical point that US lawmakers use to overturn the deal? Would a change in terms lead to Vietnam walking away from the deal?