Ambassador of Vietnam to the US, H.E. Pham Quang Vinh, shares his thoughts on the future of the TPP.
■ How would you evaluate the prospects for the TPP being ratified in the US given that the two presidential candidates have expressed opposition to the agreement?
Ratification of the TPP in the US is facing major challenges. It must be approved by Congress and in the past the vote on other free trade agreements (FTAs) has been tight.
The agreement is to the national benefit, both economically and strategically, but will affect the American people, in terms of employment for example.
I believe that the current situation is worrisome but the Obama Administration has been very determined to push it forward and considers it to be beneficial for the country.
It is doing three things: the first is pushing for general support, especially in generating positive public opinion.
Secondly, support is being garnered among the business community, particularly exporters and those who rely on foreign markets. Thirdly, it is extensively lobbying Senators.
There are two possibilities. After the November election the Obama administration may be able to use this period of relative stability to push Congress to ratify the deal.
Secondly, if the TPP is not ratified in 2016 the new administration is likely to delay it.
It is common for new Presidents to initially focus on domestic issues due to the commitments they made during the campaign.
The TPP will have to wait. However, the TPP may be ratified during the period between the November election and the end of President Obama’s term.
If this happens it will be a good thing for the US and all participating countries.
■ What is the feeling inside the US and among other TPP members about the agreement?
Everyone views the TPP as a new generation FTA with very high standards.
It is expected to significantly spur trade in a bloc that creates 40 per cent of global GDP and conducts 30 per cent of global trade.
The TPP will also bring North America and East Asia closer together; two regions with dynamic development and located on either side of the Pacific Ocean.
Every member country saw the benefits to come their way when the agreement was agreed upon in October 2015 in Atlanta, Georgia and then signed in February 2016 in New Zealand.
Everyone will benefit from the TPP. The main point, however, is that economic benefits will be combined with strategic benefits.
The TPP can link large developed economies with small and medium developing economies to create a new framework that can assist each member whether large or small.
It is clear that the US will see strategic and economic benefits from the TPP. Economically, when 18,000 tariffs are removed it will create a huge market for the country.
Strategically, it will link the US, North America, and East Asia together, creating a high quality trading cooperation format.
This will set the direction for new generation FTAs – something that is very important for the US’s strategic interests.
Because it is a multilateral agreement involving countries at different development levels, the benefits will come with challenges.
For smaller countries like Vietnam, the challenges are major and direct. If they are overcome the benefits will come, both economically and strategically.
When approaching large markets like the US, Japan, Australia and Mexico, Vietnamese products will be in a better competitive position.
In textiles, for example, Vietnam now competes with China, Sri Lanka and Bangladesh but after the TPP the country’s textiles will certainly be much more competitive in the US.
■ What is your view of Vietnam’s preparations for the TPP?
There are many challenges facing Vietnam in regards to the TPP. The challenges actually coincide with the aims of the Vietnamese Government, including in innovation and reform.
For example, the government is seeking greater transparency, stabilizing macro-economic factors, and balancing the business environment between State, private and foreign players. These are included in the TPP’s provisions.
With or without the TPP, Vietnam must conduct reform efforts as directed by the Party and the State to increase the attractiveness of the economy and markets so that new investment arrives.
We believe that, even before the TPP, foreign enterprises were enthusiastic about finding investment opportunities in Vietnam.
What we want to say is that every country can see that the TPP creates strategic and economic benefits. In every single sector, however, the benefits may be accompanied by challenges.
This therefore requires important decisions from the government as well as from other members of the TPP. Vietnam should take the initiative and fully prepare for further integration.