As round 16 of the Trans-Pacific Partnership (TPP) concluded last month in Singapore, Vietnam emerged as the nation likely to enjoy the most benefits when the agreement is finalized.
Negotiations on TPP, although expected to be completed by year’s end, could be extended beyond 2013 to accommodate Japan, a relative newcomer to the talks.
The next round of negotiations are scheduled for May 15-24 in Lima, Peru.
Vietnamese delegates to the talks will still have to resolve challenging issues on origin norms and social matters including labor and environmental protocols. When the pact is complete, however, markets from all the TPP member nations will be open to imported Vietnamese products.
TPP members now number 11, and include Vietnam, Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, and the U.S.
Additional benefits for Vietnam will be direct foreign investment, and closer business relationships with international production centers, according to a forecast from Professor Peter A. Petri of Brandeis University.
When the TPP agreement is concluded and initiated, 55 percent of Vietnam’s garment and textile exports will go the U.S., according to the Vietnam Textile and Apparel association, an increase over current exports of 12 to 13 percent, worth about $30 billion annually.
Currently, Vietnam pays 17.2 percent duty on imports to the U.S. With the TPP in effect, imported goods from Vietnam will be duty-free.
Exports to Japan, Vietnam’s second biggest export customer, are expected to increase significantly, if Japan becomes the 12th member of TPP.
Vietnam’s GDP is on track to increase to US$26.2 billion from current levels by 2015, or 7.7 percent. With Japan as part of the TPP, Vietnam’s GDP could increase over that period by 10.5 percent, to US$35.7 billion.
But not only will Vietnam benefit from the TPP deal. Every member nation is expected to experience economic growth and an increase in jobs as a result of the international agreement.