VietNamNet Bridge – If the Trans Pacific Partnership (TPP) agreement fails, Vietnam will miss an opportunity which can help it boost growth, but this would not have a negative impact on the national economy, analysts say.
US President-elect Donald Trump has confirmed his strong opposition to TPP, stating that he will ditch the TPP trade deal on day one of his presidency, describing TPP as a ‘potential disaster’ for the US.
Dr Phan Minh Ngoc, a renowned analyst, commented that TPP was a ‘plus’ for Vietnam’s economy because it would boost exports and growth.
If TPP is ratified, Vietnam may see GDP growth rate rising from 6.2 percent to 7 percent. And if TPP fails, the growth rate will still be at 6.2 percent and will not decrease.
“It won’t be a disaster or a negative factor if TPP is rejected. It won’t cause Vietnam to lag behind in its development path,” he said.
Le Quoc Phuong, deputy director of the Industry & Trade Information Center under the Ministry of Industry and Trade, said Trump’s presidency could lead to US protectionism.
However, he said even without TPP, Vietnam will be able to boost exports to the US, if Vietnamese products are highly competitive and have high quality.
The US is now the largest export market for Vietnam, making up 20 percent of total exports.
Another expert was cautious when talking about TPP. “TPP will help create more markets for Vietnam’s products. But I am afraid that Vietnam still has not prepared well for the agreement,” he said.
“This happened with the ASEAN-China Free Trade Agreement (ACFTA). The deeper the integration is, the bigger trade deficit with China we suffer,” he said.
“As for WTO, we did not take full advantage of the opportunities after joining the large playing field. Meanwhile, opportunities have become challenges. This will repeat with TPP membership if we cannot prepare well for it,” he said.
In other words, the magnitude of the effects to be caused by the TPP will still depend on how Vietnam is ready to optimize benefits from the agreement.
The head of the Vietnam Institute for Economic & Policy Research (VEPR) believes the new US leaders and Congress won’t give up on the TPP so easily, because it is the US and its alliances, not Vietnam, that will suffer the most if it is not ratified.