Transcript Beyond the golden era

The Trans-Pacific Partnership:
Opportunities and Challenges
Nathan Lane, U.S. Consulate General Ho Chi Minh City
Vietnam Oregon Initiative Launch, April 22, 2015
Agenda
1. What is TPP?
2. What does TPP mean for Vietnam?
3. Opportunities
Slide 2
What is the TPP?
Slide 3
TPP – A Comprehensive High Standard Trade and
Investment Agreement
12 Countries
40% of the World
Economy
Slide 4
TPP Basics
• A “21st Century” Trade and Investment Agreement –
Aims to eliminate all tariff and non-tariff barriers to trade
and investment
• 12 Partner Countries - United States, Vietnam, Australia,
Brunei, Chile, Malaysia, New Zealand, Peru, Singapore,
Canada, Japan, Mexico
• Massive in scope – 29 chapters, from Market Access to
IPR to environmental standards
• Model for future trade pacts among APEC members
Slide 5
Average score of agreements
Ambitious
1.00
0.80
0.60
0.40
0.20
0.00
United States
Source: scores of provisions from FTA database.
ASEAN
TPP Scenario
2012
2015
2020
TPP12
TPP+
FTAAP
Australia, Brunei,
Chile, Malaysia, New
Zealand, Peru,
Singapore, United
States, Vietnam,
Canada, Japan,
Mexico
New countries join
21 APEC
Economies
2025
What does TPP mean for Vietnam?
Slide 8
AmCham/HCMC
What explains Vietnam’s gains?
•
•
•
•
More exports of manufactured goods
More access to imported goods
Increased FDI
Stronger linkage to production chains,
overall productivity gains
• Support momentum of reforms, growth
Export gains by country
(gains from trade effects)
GDP ($bill)
2025
328
9
613
157
1,239
627
328
519
Australia
Brunei
Canada
Chile
Japan
Korea
Malaysia
Mexico
Value change ($bill)
TPP
% GDP
9
0
7
5
61
48
16
16
FTAAP
33
0
17
8
180
123
29
58
TPP
2.8
1.8
1.1
3.0
4.9
7.7
5.0
3.1
FTAAP
9.9
4.7
2.8
5.3
14.6
19.6
8.8
11.1
New Zealand
57
3
5
5.7
8.5
Peru
92
10
13
11.0
14.2
232
2
-10
0.6
-4.2
2,845
56
292
2.0
10.3
264
68
113
25.8
43.0
7,310
301
862
4.1
11.8
20,264
-78
962
-0.4
4.7
27,574
223
1,824
0.8
6.6
Singapore
United States
Vietnam
TPP economies
Others
World
Market Access Opportunities for Vietnam
• Increase market access opportunities:
• Promote Vietnam’s exports, especially to the
U.S. market for products
• Improved market access and tariff reductions
in other TPP countries – e.g. U.S. tariff rates
are already low for electronics, appliances,
and a multitude of other low-end
manufactured products, but rates in many of
the other TPP countries (or potential TPP
countries) are high
Tariff Reductions Create New Opportunities
• Seafood – U.S. tariffs range up to 35% for canned seafood
• Other ag products (fruits, nuts, etc.) – U.S. tariffs can be as high as
30%-130% (e.g. for some peanuts)
• Flowers – U.S. tariffs up to 10%
• Footwear – U.S. tariffs average 17% (and can go as high as 48% for
some sneakers)
• Accessories (hats, gloves, hair clips, etc.) – U.S. tariffs average 23.5%
• Auto parts – U.S. tariffs average 25%
• Wool cloth – U.S. tariffs average 25%
• Brooms and other straw materials – U.S. tariffs average 32%
• Ship parts – U.S. tariffs go as high as 50%
Slide 13
Investment
• International “vote of confidence”
– TPP Differentiates Vietnam from other developing countries
looking for investment;
– International investors like TPP, and the seal-of-approval it
connotes
– Improved bond ratings and renewed investment flows; will pump
up the overall economy and markets
• Higher demand for supportive industries
• Access to the larger TPP market should increase
incentives for investors to move electronics and
appliance factories to TPP countries;
– Vietnam and Malaysia are the logical destinations
Slide 14
FDI Gains by country
(Vietnam FDI grows)
GDP ($bill)
Stock increase ($bill)
% GDP
2025
1,536
28
1,255
444
476
406
386
1,046
TPP
10
1
0
4
156
17
4
3
FTAAP
19
0
1
3
250
58
3
2
TPP
0.7
2.8
0.0
0.8
32.8
4.2
1.0
0.3
FTAAP
1.3
1.2
0.0
0.7
52.6
14.3
0.9
0.2
New Zealand
182
2
4
1.1
2.1
Peru
189
12
10
6.4
5.3
Singapore
1,678
0
0
0.0
0.0
United States
7,726
40
57
0.5
0.7
395
28
42
7.1
10.6
15,746
276
451
2.9
2.9
40,335
0
895
0.0
2.2
56,082
276
1,345
0.5
2.4
Australia
Brunei
Canada
Chile
Japan
Korea
Malaysia
Mexico
Vietnam
TPP economies
Others
World
Reform Attracts New Foreign Investment
• Improved Business Climate –
– Directly address complaints from U.S. and local
businesses in Vietnam (IPR protection, increased
international financial service providers, more level
playing field for private firms, etc.)
– New investment creates new jobs, new skills, and
opportunities for new supportive industries
Slide 16
Improved International Status
• Raise Vietnam's international status, and
promote relationships with key partners
• International stability and a secure
international environment brings economic
security and stability
Overall
• All TPP members benefit
• Emerging economies like
Vietnam benefit most
THANK YOU
Questions?
Slide 19