It’s the largest regional trade pact ever agreed – and according to some economists, Vietnam could emerge as the biggest winner.
After five years of secret negotiations, and some tense 11th hour brinkmanship at the final session in Atlanta, twelve countries finally signed up to the Trans-Pacific Partnership.
The reduction in tariffs would give Vietnamese exporters much freer access to the giant markets of the United States and Japan, and spur a substantial increase in economic growth.
Pro-democracy activists also hope the pact will tie Vietnam much closer to the United States, and make it more responsive to criticism over human rights abuses and restrictions on the rights of workers.
Vietnam’s inclusion can also be seen as a major rebuff to China, given the pact’s expected role as a bulwark against Chinese economic and political influence in the region.
President Obama made clear the strategic goals of the pact when he welcomed the agreement.
“When more than 95 percent of our potential customers live outside our borders, we can’t let countries like China write the rules of the global economy,” he said.
“We should write those rules, opening new markets to American products while setting high standards for protecting workers and preserving our environment.”
The TPP first needs to be ratified by the legislatures in the participating countries and that promises to be a hard fought and drawn out process – particularly in the United States.
There is opposition in the US from both sides of the political spectrum.
Some Democrats argue the TPP gives too much power to Wall Street and big corporations.
Some Republicans will be loath to grant such a major foreign policy achievement to President Obama in the run up to a presidential election.
Vietnam’s critics in Congress can also be expected to argue against the inclusion of such a low wage, authoritarian country without further concessions on labour rights, religious freedom and government transparency.
That’s likely to put further pressure on Hanoi, which has already shown signs of mitigating its repression of government critics as the negotiations reached their climax.
Some leading dissidents have been released from prison since last year, although harassment and sometimes violent attacks have continued against bloggers and other activists.
Vietnamese officials were quick to welcome the agreement.
The economic benefits of the deal are seen as so overwhelming that even Communist Party factions that traditionally favour China, and are wary of US influence, are thought to have come round.
“It will help increase Vietnam’s exports, foreign investment and an impetus for the country to change its development model,” said Dr. Vo Tri Thanh, deputy director of the Central Institute for Economic Management, in comments quoted by Tuoi Tre newspaper.
“The TPP comes just in time as Vietnam needs a motivation for changes that will lead to sustainable development.”
There are predictions that Vietnam’s apparel exports to the United States, currently worth $11 billion, could quadruple over the next decade.
The TPP’s rules on state owned enterprises could also challenge the state’s current dominance of the garment sector and give a boost to privatisation in other areas as well.
However, Vietnam remains something of an anomaly amongst its new TPP partners.
It is the poorest country, with some of the lowest labour costs, and with a communist government that remains at odds with the values and principles of the driving force behind the TPP, the United States.
Some analysts have pointed out that Vietnam reneged on some of its commitments towards liberalisation after joining the World Trade Organisation a decade ago.
They argue that this time it can expect closer monitoring on the commitments it makes as it will be a more direct trading partner with the US.
The hope of some reformers is that the deal will mark a decisive step as Vietnam seeks to align itself – politically, economically and strategically – more closely to the United States, and further from the ever less welcome embrace of China.