Japanese Convenience Store Expansion

An article in The Japan Times discusses the plan that Japanese convenience stores have to expand internationally. Under the new TPP deal, deregulation of laws for convince stores will allow for substantial growth in many countries. Japan looks to expand in nations like Malaysia and Vietnam and invest in local stores. How will this affect local businesses in these expanding markets? Will Japan find success? What types of challenges face in this new business expansion?

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?

Japan Will Benefit With Projected Increase in Southeast Asia’s GDP

In a January 8th article in the Nikkei Asian Review, It discusses the predicted implications for the 12 member TPP alliance. In a positive projection, all members GDP will increase by an average of 1.1%. Southeast Asian countries will benefit the most with Vietnam projected at a 10% increase, Malaysia at an 8% increase and Brunei with 5%. This all bodes well for Japan as many of these countries are looking to expand business opportunities for Japanese companies. How will Japan’s GDP be affected? What type of business will grow for Japan in Southeast Asia? Will these Southeast Asian countries really grow this much under the new TPP deal?

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?

TPP to balance out trade deficit between Vietnam and China?

An article published in The Diplomat, titled “The potential of TPP for Vietnam”, dtd September 04, 2014 by Truong-Minh Vu & Nguyen Nhat-Anh (http://thediplomat.com/2014/09/the-potential-of-the-tpp-for-vietnam/) asserts  how the TPP will help counter the trade deficit with China. The article argues that while Vietnam has been majorly exporting only raw materials to China, imports from China are a broad range of products for export production including machinery, steel, chemicals, and raw materials. The authors contend that a spill over effect of the excess trade with Canada and US may lead to deeper cooperation in development of higher quality services and production enablers. Another aspect of TPP is the soft power balance in Asia. While China has steadily increased its assertion in Asia, Vietnam following a non-aligned policy cannot directly have alliances with other countries. In such a state, a trade deal is a perfect soft deterrence for China’s growing influence in the area. So how will TPP actually work in favor for US and check China? Will we see any retaliation from China to counter the TPP (lowering prices on goods, services,  Chinese companies expanding in Vietnam? With the Regional Comprehensive Economic Partnership (RCEP) in horizon, what would be the long term impact of TPP?

TPP Deal Reached

The recent trade deal reached between 12 Pacific countries, including the U.S. and Japan, was described as the ‘largest regional trade accord’ in history, in an article by the New York Times. The agreement is hailed as an important first step after two years of intense negotiations. The deal is set to open new markets, protect workers, and preserve the environment. While these 12 countries have an agreed upon deal in place, the next step will be for the agreement to make its way through each participant’s respective legal system. How might the current deal change as it is vetted through the respective country’s political processes? What are some benefits to the new TPP? What are some of the downsides to the new TPP?