Trump's vow to upend global trade may hurt Vietnamese exports

By VnExpress   December 2, 2016 | 11:56 am GMT+7
Trump's vow to upend global trade may hurt Vietnamese exports
Workers at TAL Apparel Vietnam Garments factory in Vinh Phuc Province north of Hanoi, Vietnam. Photo by Reuters/Kham

HSBC has suggested Vietnam push through economic reforms to make up for any slowdown in exports and investment inflows.

There is a risk that U.S. President-elect Donald Trump’s trade protectionism, followed by an increase in trade barriers, could result in slower growth for Vietnam’s export-led economy, HSBC analysts said in a recent report.

Trump’s win has also put an end to the U.S.-led Trans-Pacific Partnership, better known as TPP. He repeatedly said the free trade zone could bring American jobs elsewhere.

As Vietnam still heavily relies on exports, the country is supposed to be the biggest winner from the trade pact, which is forecast to cut more than 18,000 tariffs among 12 participating countries.

Experts said that under the impact of TPP, Vietnam’s economy will be likely to grow 11 percent from last year’s gross domestic product, estimated at $193.6 billion. And exports may soar 28 percent due to a surge in foreign investment inflows.

The U.S. is the biggest single market for Vietnamese exports, accounting for about 21 percent of the total shipments last year.

"I’m sure exports will still grow, but not at the accelerated rate we had hoped for, without TPP," Steve Mantle, offshore fundraising director at Ho Chi Minh City-based VietFund Management, told the Saigon Times.

The HSBC report suggested Vietnam push through economic reforms, related to public investment, privatization of state-owned enterprises and banking restructure, as a way to make up for any slowdown in exports and investment inflows and to be "less vulnerable to external shocks."

The Vietnamese government stands ready for a future without the U.S.-led free trade pact.

"We already have signed 12 free trade agreements, so joining the TPP is good, but without joining TPP we will still continue to further the economic integration under programs we have joined," Prime Minister Nguyen Xuan Phuc told the parliament last month.

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