“The United States has announced it suspends the submission of TPP to the Congress so there are not sufficient conditions for Vietnam to submit its proposal for ratification,” Prime Minister Nguyen Xuan Phuc told the National Assembly on Nov 17. “We are ready to join the TPP but with or without this trade deal, Vietnam will remain on the international integration path.”
According to TPP’s Chapter 30, Final Provisions (and entry into force), U.S. participation is required, given its economy represents 60.3% of the required 85% of the combined GDP of the original 12 members.
The TPP would be a big boon for Vietnam’s exports and manufacturing economy, which is receiving record foreign investment due to its numerous trade accords, cheap labor and relative stability.
Phuc stressed that excluding the TPP, Vietnam had joined 12 free trade agreements (FTAs) and would make the most of these deals.
“We are ready to join the TPP but, with or without this trade deal, Vietnam will remain on the international integration path. We have 12 FTAs, so even without the TPP, we can still go ahead with those already signed, including with ASEAN,” he noted.
Vietnam has built 10 mechanisms for bolstering its ties with the U.S. in education, healthcare, the Mekong River and mine clearance, among others, he said, and the nation will stick with those mechanisms.
In addition, Prime Minister’s Decision No. 1969/QĐ-TTg , Oct 13, 2016 “Preparation and Action Plan to Implement the WTO Trade Facilitation Agreement” will essentially implement TPP Chapter 5, Customs Administration and Trade Facilitation.
According to WTO Director-General Roberto Azevêdo, who met Vietnam’s government and business leaders on Apr 15, 2016 in Hanoi, “For Viet Nam, the Trade Facilitation Agreement could reduce trade costs by as much as 20%. Cutting a fifth off the cost of trading would make a huge difference. It will help to boost trade flows in Viet Nam. It will support SMEs to start exporting. And, in a time when production chains have been globalised, it will help the economy to connect to cross-border production networks.” Vietnam ratified the TFA in Dec 2015.