Without US, what are benefits Vietnam gains from CPTPP?
According to Dr. Tran Toan Thang, Head of world’s economic board (National Center for Socio-Economic Information and Forecasting), Vietnam would not obtain fewer benefits from the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP) than from the original Trans-Pacific Partnership (TPP)
Dr. Tran Toan Thang analyzed: the US was a main member of TPP. Not only Vietnam but also most of other countries also targeted to the US market when joining this agreement. The agreement without the US naturally changed benefits of each TPP member.
It was analyzed that if the Vietnam would receive many positive benefits from the original TPP with the US such as GDP rose 6.7%, rising 15-17% of export growth. There was no doubt that the benefits would reduce much with the TPP without the US.
“The results of our analyses reveal that Vietnam will not benefit much from TPP11. For example, the GDP only rises 1.32% under the TPP11, compared to 6.7% under the TPP12. The export turnover rises 4% under the TPP11 while 15% under the TPP12. The import turnover rises 3.8% under the TPP 11 while 10.5% under the TPP12. This means that the benefits which Vietnam achieves from TPP11 reduce significantly due to the absence of the US”. Mr. Thang affirmed.
However, according to TS. Tran Toan Thang, although the benefits to the economy of Vietnam are less, the participation in TPP11 is also worth being considered. If Vietnam does not participate, the TPP member countries will trade together and reduce their trade with Vietnam. Meanwhile, Vietnam will lose the opportunity to take advantage of the markets including Canada, Mexico, and Peru which Vietnam has not signed any trade agreements with.
"I think some sectors such as textiles, leather, and footwear, some other sectors which require large workforce in Vietnam still benefit, still increase the export turnover under the TPP11. We just do not gain benefits from the US market, but not completely lose the US market because the Vietnamese goods are still exported to the US.
In addition, the qualitative analysis reveals that there is a factor of opportunity when being a member of the TPP11. The TPP 11 member countries expect the return of the US in the future,” Dr. Thang said.
Concerning about imports as well as domestic competition when joining the CPTPP Agreement, Dr. Thang said that in term of cutting tariffs, they are not affected much. In Asian markets, Vietnam has signed trade agreements and the import tariffs will continue to be cut. With or without TPP11, the competitive pressure from Asian imports will still increase. The member countries on the other side of the Pacific are not the main importers of Vietnam. The CPTPP makes an increase in import, but the increase in import is mainly from countries out of the CPTPP.
Responding to the question on whether or not the CPTPP will make a strong impact on Vietnam's institutions as forecasted for the TPP, Dr. Thang said: "As I know, basically the commitments in TPP12 still remain in the TPP11. Countries have just mentioned a list of reserved commitments that have not been implemented immediately as well as some provisions that will be discussed again. Currently, I do not currently have that list, but in principle, I think the list is mainly commitments related to the US market as well as the reform pressure from agreements with the US. Therefore, the TPP11 still puts pressure on institutional reforms to Vietnam because the commitments not only have a direct impact but also an indirect impact on the institutional reform".
"It must be said that even without TPP11, Vietnam has already opened the door". The TPP11 countries are not entirely newly liberalized markets of Vietnam, except three countries of Peru, Mexico, and Canada. Increasing new markets is increasing opportunities. The TPP11 includes provisions that require Viet Nam to change its rules and principles. In the today’s context, increasing pressure from the TPP11 on domestic reform is required ". Dr. Thang emphasized.