Vietnamese PM wants US back in monumental Pacific trade deal

By Vu Minh   March 27, 2018 | 12:30 pm GMT+7
Vietnamese PM wants US back in monumental Pacific trade deal
Vietnam's Prime Minister Nguyen Xuan Phuc shakes hand with U.S. President Donald Trump during Trump's state visit to Vietnam on the sideline of Asia-Pacific Economic Cooperation (APEC) that Vietnam hosted in November, 2017. Photo by VnExpress/Giang Huy

It is 'in the interests of all the member economies' for the U.S. to rejoin the agreement, says PM Nguyen Xuan Phuc.

Vietnamese Prime Minister Nguyen Xuan Phuc reiterated that he wants the U.S. back in a landmark Asia-Pacific trade agreement that was signed earlier this month by 11 countries in the region without the U.S.

It is "in the interests of all the member economies" for the U.S. to return to the Trans-Pacific Partnership (TPP) trade pact, Phuc told Nikkei and the Financial Times on Monday.

That would be a great impetus for growth "in this region and the world," Nikkei quoted the PM as saying.

The original 12-member agreement, known as the Trans-Pacific Partnership (TPP), was thrown into limbo early last year when Trump withdrew from the deal three days after his inauguration.

He said the move was aimed at protecting U.S. jobs, according to Reuters.

The 11 remaining nations finalized a revised trade pact in January, called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

The CPTPP will reduce tariffs in countries that together amount to more than 13 percent of the global economy - a total of $10 trillion in gross domestic product. With the U.S., it would have represented 40 percent, Reuters said in March.

In an interview with Nikkei in November last year, PM Phuc said he would like the U.S. to reverse its decision to back out of the TPP, and that Japan and Vietnam planned to call on the remaining member countries of the deal to lobby President Trump.

He said he wanted to urge Trump to rejoin the trade agreement in order to "secure other member states' and its own interests."

Vietnam was seen to the gain the most from the original trade pact with the U.S. Estimates showed that the TPP was expected to boost the country's GDP by 6.7 percent, according to Tran Toan Thang from the National Center for Socio-economic Information and Forecasting.

A World Bank report released just after the signing of the CPTPP said the agreement will still yield robust economic gains for Vietnam.

According to analysts, multilateral trade agreements such as the CPTPP are expected to boost Vietnam’s investment and export driven growth model.

Even without the U.S., the deal will span a market of nearly 500 million people, making it one of the world's largest trade agreements, according to Chilean and Canadian trade statistics.

The CPTPP will increase Vietnam’s GDP by 1.1 percent by 2030, according to the report. “Assuming a modest boost to productivity, the estimated increase of GDP would amount to 3.5 percent from the CPTPP,” said Ousmane Dione, the World Bank's country director for Vietnam.

Lower tariffs under the trade deal are expected to help boost Vietnam’s exports by 4 percent, said Tran Toan Thang from the National Center for Socio-economic Information and Forecasting.

Under the CPTPP, exports to signatory countries will increase from the current $54 billion to $80 billion by 2030, reaching 25 percent of total exports, according to the WB.

Textiles, footwear and beverages are expected to enjoy the biggest boost thanks to the lower tariffs.

Vietnam’s economy is likely to grow by 7.41 percent in the first quarter of this year, led by robust exports and tourism, said PM Phuc in a statement posted on the government's website on March 12.

The country's economic growth is forecast to expand by 6.83 percent this year from 6.81 percent last year, the highest in a decade, said Vietnam's investment ministry.

 
 
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