Vietnam leader warns of returning protectionism amid US’ likely withdrawal from TPP

By Nguyen Hoai   December 8, 2016 | 01:35 am PT
Vietnam leader warns of returning protectionism amid US’ likely withdrawal from TPP
Workers at a foreign-invested garment factory in Vinh Phuc Province in northern Vietnam. Photo by Reuters
Donald Trump's stance on trade has led the Prime Minister to call for deeper ties in Southeast Asia at a regional summit.

Vietnam’s Prime Minister Nguyen Xuan Phuc warned that Vietnam and its Southeast Asian neighbors are facing the risk of returning protectionism amid concerns of tighter trade controls in the U.S.

Phuc said at the Bloomberg Asean Business Summit in Hanoi on Thursday that “the world and [Association of Southeast Asian Nations] ASEAN are facing big challenges in various areas, including security, economy, climate change and risk of returning protectionism.”

Phuc made the statement in the wake of U.S. President-elect Donald Trump announcing his intention to impose trade barriers and scrap the Trans-Pacific Partnership -- a U.S.-led 12-nation trade agreement that covers about 40 percent of the global economy.

Economists have said Vietnam’s export-driven economy would be one of the biggest beneficiaries of the trade deal agreed last year, which also includes Australia, Brunei, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru and Singapore.

During a meeting last month, Phuc said that Vietnam would shelve the ratification of the trade accord due to political changes ahead in the U.S.

Trump's protectionist agenda on the campaign trail has unnerved Asian economies.

Phuc said at the Thursday summit that the ten-member ASEAN bloc should deepen economic ties and take initiatives to boost trade, investment and services.

“Each ASEAN member country cannot develop by relying only on exploiting natural resources and using basic labor,” he said. “It needs to take reforms, improved competitiveness and better participation in global supply chains for higher added value.”

Vietnam’s export volume in the first nine months of this year rose 10 percent, according to the World Bank, which has predicted that the country’s economy will expand by 6 percent this year through 2018, one of the fastest rates in the world.

Phuc said that Vietnam’s economic growth will reach 6.3 percent this year.

He said Vietnam’s government is taking great strides in improving the investment climate to turn the country into an interesting and reliable destination for global investors.

Vietnam is now home to around 22,000 foreign-invested projects with funds totaling nearly $300 billion. The country also aims to raise the number of local businesses from the current 600,000 to one million in 2020.

Minister of Planning and Investment Nguyen Chi Dung said at the summit that the country would issue policies to help draw more investment from overseas, especially from Southeast Asia.

Vietnam also plans to issue a law to support small and medium-sized companies, which account for most of the local business force.

Related news:

Vietnam PM backs off from US-led TPP, emphasizes independent foreign policy

Vietnam says economy will still thrive even if TPP tanks

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