TPP in the lame duck session, outlook for Vietnam – U.S. trade

“It’s certainly not going to be brought up this year,” Senate Majority Leader Mitch McConnell said of the 12-country Trans-Pacific Partnership (TPP) at a news briefing in Washington. The White House spokesman said in  a news briefing on Wednesday, “President Obama does continue to believe that this is the best opportunity that the Congress has to take advantage of the benefits of a TPP agreement that cuts 18,000 taxes, that other countries impose on American products. We’ve got a strong case to make.” The earliest TPP could go into effect would be June 1, 2018, and Vietnam-U.S. trade is likely to continue to grow strongly. Already, Vietnam accounts for 25% of U.S. goods imports from ASEAN; and the share is likely to reach over 30% by 2020.

U.S. Trade Representative Froman said, “I think we can get the votes,” since the agreement has key industries on its side. “We’ve got the technology companies, manufacturers, services companies, virtually the entire agriculture sector all in favor of this agreement. The textile industry, for the first time in its history, supporting a trade agreement,” he added.

Sen McConnellHowever, McConnell said any decisions on the TPP or other future trade agreements would be up to Trump, who would still have the authority for four more years to negotiate “better deals” with expedited approval procedures in Congress.

While there are many Republican supporters of free trade and TPP in Congress, McConnell and House of Representatives Speaker Paul Ryan said on Wednesday they were now focused on domestic issues, to lay the groundwork with Trump to pass Republican-focused health care and tax reform legislation next year.

McConnell said his priorities for the post-election “lame-duck” session were passing a government funding extension and medical innovation legislation.

Speaker of the House Paul RyanA spokeswoman for Ryan said he had not had a change of heart since he said on a radio talk show in October that the House would not bring the TPP up for a vote because of problems with several provisions and insufficient support in the House.

 

TPP Chapter 30: Entry into force

TPP Chapter 30 explains three entry-into-force provisions. The most likely date would be June 1, 2018 under the following “(2) if all 12 haven’t notified within two years after signing , then the TPP will enter into force two years and 60 days after signing, if at least six TPP governments, accounting for 85% of the combined GDP of the 12 original signatories, have notified. To reach the 85%, both the U.S. and Japan, two of the three Canada, Mexico, Australia, and one of the others have to have ratified.”

Key Factors: Global Supply Chains, Administrative Reform

The analysis of the impact of the TPP on Vietnam’s economy, an increase of exports by 24% and an increase in GDP by 10% over the baseline without TPP, highlighted two principal factors – Vietnam companies joining global supply chains and momentum for reform of Vietnam’s administrative procedures, especially customs and trade facilitation.

These factors are entirely under Vietnam’s control. In recent years, Vietnam has made tremendous progress at global integration. Bilateral trade between Vietnam and the United States in 2016 will reach $52 billion, more than twice the 2012 level of $25 billion, and is expected to exceed $80 billion by 2020. Vietnamese goods exports to the U.S. account for 25% of total ASEAN exports to the U.S. in 2016 and will reach a 1/3 share by 2020.

In the key textiles and apparel sector, Vietnam has increased share of the U.S. market from 7.1% five years ago to 10.8% this year, while China’s share has fallen from 40.1% to 36.8%.

Global Integration and U.S. technical assistance

With continued robust implementation of global integration policies, including the WTO Trade Facilitation Agreement commitments on customs and trade facilitation, and U.S. technical assistance to help companies join global supply chains and government implement reforms, trade and investment between Vietnam and the U.S. will continue to grow at a fast clip in the coming years.

Read more …

Senator Dole: Stop playing politics with TPP
http://www.latimes.com/opinion/op-ed/la-oe-dole-tpp-congress-20161109-story.html

Senator Schumer to labor leaders: “The TPP is dead”
http://www.chicagotribune.com/business/ct-trans-pacific-partnership-tpp-is-dead-20161110-story.html, Chicago Tribune, Nov 10, 2016

Senator McConnell: no vote on TPP before Trump takes office
http://nypost.com/2016/11/10/mcconnell-says-no-vote-on-tpp-before-trump-takes-office/ , NY Post, Nov 10, 2016

New York Times: “ … stunning repudiation of the establishment”
http://www.nytimes.com/2016/11/09/us/politics/hillary-clinton-donald-trump-president.html?_r=0

Washington Post: “How Donald Trump did it, in 5 images”
https://www.washingtonpost.com/news/the-fix/wp/2016/11/09/how-donald-trump-did-it-in-5-images/

Washington Post: The Clintons were undone by the middle-Americans they once knew so well
https://www.washingtonpost.com/politics/the-clintons-were-undone-by-the-middle-american-voters-they-once-knew-so-well/2016/11/09/

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