Vietnam seeks boost from trade pact

Vietnam’s garments industry could see a substantial boost from the CPTPP. Photo courtesy AFP.

Vietnam’s ratification of the TPP trade agreement is expected to boost economic growth but is unlikely to deliver the radical reforms that were once anticipated.

The National Assembly on Monday unanimously approved the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) that will cut tariffs across 11 Pacific rim countries next year.

Vietnam is seen as one of the main beneficiaries of the pact, with a boost expected to exports of clothing, shoes and seafood as well as electronic products.

Government officials said the pact confirmed Vietnam’s commitment to international integration.

They were less forthcoming about the commitment to introduce new labour standards.

The pact includes a pledge to allow independent trade unions, but Vietnamese officials have acknowledged that may involve some “challenges”.

The United States had originally intended to bind Vietnam to its commitment with separate bilateral protocols and a regime of close monitoring – but President Trump’s decision to walk away from the TPP last year eased pressure on Hanoi, which can now expect less exacting attempts at enforcement.

The Vietnamese government, however, says it intends to introduce what it calls “breakthroughs in law making and enforcement” as well as improved government management.

Vietnam had earlier anticipated a much more significant economic impact from the TPP with the opening of lower tariff access to the vast US market.

The 11 members say that the door remains open to US membership.

While Beijing continues to push for a regional trade pact of its own, Vietnam sees an opportunity to reduce its reliance on its northern neighbour by joining a nascent economic bloc that pointedly excludes China.