In framework of Midterm Vietnam Business Forum, 2017 (VBF), numerous think-tanks as well as faces from business organization, companies… contribute ideas for improving Vietnam economy, in climate of international challenges.
Mr Fred Burke Managing Partner of Baker & McKenzie, VBF's , Head of Investment and Trade Working Group
Mr. Fred Burke, Head of Investment and Trade Working Group of the Forum has mentioned one challenge for Vietnam today. That’s how to respond to the unexpected withdrawal of the United States from Trans-Pacific Partnership Agreement (TPP) -one of the biggest and most important multilateral trade agreements since the WTO was founded.
The deal was hailed as a 21st century multilateral trade agreement that would produce significant income gains for each of its 12 signatory member states. As the only developing country in the 12 nation group, Vietnam had a lot to gain –the biggest proportional boost to its GDP of all of the TPP countries, according to the best analysts. TPP was seen as the next logical step in Vietnam's amazingly successful 20 year long global economic integration strategy, following on its 2007 accession to the WTO and many other bilateral and multilateral trade agreements before that.
According to Mr. Fred Burke: “Vietnam has wisely not put all of its eggs in the TPP basket. In fact, we can say that Vietnam has not just a "Plan B", but also a plan C, D, E and F. Vietnam is a shining example of the potential benefits of global trade. It has developed quickly from a state of having virtually no trade in 1990, to become one of the world most significant top exporters of garments and footwear, sea products, key agricultural products such as rice, coffee and spices, furniture, and more recently even electronic products and software.”
Below are some additional plans of Vietnam ahead of the TPP without U.S:
is the Trade Facilitation Agreement. This is the only multilateral agreement in the Doha Round of negotiations under the WTO that has been successfully signed, ratified and entered into force, which it did as of February 22, 2017.
for Vietnam will include, first and foremost, continuing to implement its commitments and the 2007 WTO accession agreements.
is continuing to implement the objectives reflected in the ASEAN Economic
Community agreements with the nine other ASEAN nations.
including pushing the Vietnam Free Trade Agreement (EV FTA), “TPP-11” (TPP without U.S), RCEP - a massive trade block which would include China and India as well as most of Southeast Asia and Australia, but not the United States; as well as other pending agreement. Plan F
involves continuing the domestic economic and administrative reforms that Vietnam needs to maintain competitiveness and build to reduce poverty and rise up to the next level of economic development, these include administrative procedure reforms to make the role of the state more supportive in nurturing industries to compete in the global stage, investing more efficiently in infrastructure, and equitizing state owned enterprises to reduce the amount of capital that they drain out of the economy.
Last but not least, Fred Burke mention a special solution for Vietnam. The Plan G
is about a bilateral trade agreement between Vietnam and U.S. Even as the US withdrew from the TPP, Apparently the thinking in the new administration is that it will have more negotiating leverage and be able to secure a better deal for itself with bilateral agreement. Considering the substantial trade deficit that the US suffers in its trade with Vietnam, at least in terms of trade in goods, it is understandable that American business interests will ask for increased market access as part of the FTA deal and the Trump administration will want to show immediate export gains for the US. “Vietnam can turn this into an opportunity to accelerate the phase ins for its reciprocal market access in the US market”, Fred Burke said.