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Today marked a new milestone in relationships between Vietnam and the USA with the arrival of the first USA aircraft carrier, the Carl Vincent, which docked in Danang.
Only ten days or so ago the final version of a landmark trade Agreement was released, which is a replacement of the Trans Pacific Partnership Agreement (“TPP”) torpedoed by President Trump. The negotiation of this Agreement led by Japan and named Comprehensive and Progressive Agreement (“CPTPP), included 11 countries being the original TPP countries ex the USA. The CPTPP is expected to be officially signed in Chile on March 8th 2018
The Agreement whilst based on the original TPP Agreement there are several significant provisions which have been put on hold relating to investor state disputes,, intellectual property protection and pharmaceuticals previously pushed by the USA The Agreement will cover 13.5% of global trade which is still significant but of course smaller than the TPP. However it does seem that once signed and ratified it may be open for other countries to join and it seems that the UK may already have indicated such an interest.
According to Mallon, the CPTPP should provide increased opportunities for Vietnamese producers to access new markets. Increased trade in services also has the potential to accelerate the integration of Vietnamese producers into the global supply chain. This in turn should help accelerate growth in Vietnamese productivity, incomes and living standards and help with the significant benefits that would have occurred in Vietnam’s favour under the TPP.
Mallon also considered the chance of the USA joining the CPTPP to be very slim and of the UK joining premature.
With the prospect of the EU Vietnam FTA also being ratified this year the growth prospects for Vietnam continue to look very strong.