How will the failure of the TPP Agreement really impact Vietnam
26 Dec 2016
One fallout from the USA Presidential Election results would seem to be the demise of the TPP before it has come into effect, because without the USA there seems little hope of the TPP surviving and being ratified by the remaining member governments. So the question is how will this impact Vietnam.
The general consensus amongst Government Officials and business leaders is that Vietnam will continue its growth trajectory with or without TPP. However, a lot was made of the fact that Vietnam was set to be the biggest beneficiary of TPP with a significant boost projected to exports, labour and GDP, so why are people so confident. Well, the absence of TPP will not adversely affect Vietnam’s annual GDP growth rate of 6.2 -6.5%. The US is the biggest importer of Vietnamese goods, with export turnover to USA reaching US$ 31.8 billion in the first 10 months of this year. There is no reason why Vietnam will not continue to be an attractive investment destination for US companies and the US is currently the 9th largest investor in Vietnam.
In addition Vietnam has recently concluded a free trade agreement with the European Union and one with Korea. In addition the advent of the Asian Economic Community which creates a single market of over 500 million and the envisaged Regional Comprehensive Economic Partnership will all help underpin Vietnam’s growth. A further aspect is that the EU FTA, as did the TPP, is that they oblige Vietnam to make further economic and institutional reforms all of which will improve the business and investor environment.