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TPP – Vietnam’s new game in the global integration: Part 3
Vietnam has announced that it will join the negotiations for the Trans-Pacific Partnership Agreement (TPP). The Vietnamese business community has agreed that Vietnam needs to join the new game in the global integration, though it well understands that the new agreement will bring both great opportunities and challenges.
* The US will be a tough negotiator in TPP?
* TPP – Vietnam’s new game in the global integration: Part 2
TPP seems to be a completely new concept in Vietnam. Therefore, people may still do not have sufficient information about the agreement, about the opportunities Vietnam will have and the challenges Vietnam will face, as well as the relation between Vietnam and the TPP’s members in the future.
A lot of questions have been raised about TPP. As planned, Vietnam will have to wrap up the negotiation with the US – the most important partner, next autumn. How has Vietnam been preparing for the negotiation and what position Vietnam is now in? Will Vietnam be able to grab the opportunities and cope with difficulties in the future?
Tran Huu Huynh, a Vietnamese Lawyer, Head of the Legal Department under the Vietnam Chamber of Commerce and Industry (VCCI), Eric Emerson, a Lawyer from the US, and Pham Chi Lan, former Member of the Prime Ministerial Research Team, a well known economist, gave the answers to the questions, and provided necessary information and showed their viewpoints about TPP and Vietnam’s opportunities and challenges with the agreement at an online roundtable talk on November 30
Here is the third part of the roundtable talk
Thu Giang Nguyet, a civil servant in Hoa Binh province: Is there any risk that the US would not go to the end of the road (TPP conclusion)?
Lawyer Eric Emerson: Let me break this into two questions. The first is “Will the United States participate in these negotiations to the point of getting to a signed agreement?” and the second is “Will the U.S. Congress ratify the agreement?”
As for the first question, I think the answer is almost certainly “yes.” TPP is an important part of this Administration’s trade policy. First, President Obama has announced a National Export Initiative, the goal of which is to double U.S. exports within five years. It would be hard for this Administration to claim that it was meeting this goal without negotiating a free trade agreement with someone. (Currently, the TPP is the United States’ only on-going FTA negotiation.)
Second, this Administration is committed to improving U.S. relations in Asia for political as well as economic reasons, so it’s hard to see how this Administration would walk away from this particular negotiation even in favor of another FTA somewhere else in the world. Indeed, I think the bigger risk is that this Administration might agree to something less than a good deal just for the sake of being able to announce that a deal had been reached.
The second question is much harder to answer. Whether or not a TPP agreement would be ratified by our Congress will depend on numerous factors, many of which are not currently known. For example, what will be the status of the Columbia, Panama and Korea FTAs when TPP comes to a vote? There will be a desire to take these agreements in order, so if one of these has not been ratified, there will be a tendency not to let TPP skip ahead in the queue. What will be the state of relations between President Obama and the Republican Party at the time this comes to a vote? Having a Republican controlled House will make passage more difficult, but it’s important to note that President Clinton was able to get NAFTA passed with substantial Republican support in the U.S. House of Representatives, and over the objections of many in his party. Will the final TPP agreement be viewed as being “good” for the United States? The answer to that question won’t be known for many months, but will have a major impact on whether or not the agreement can pass.
In short, while I believe that this Administration is committed to reaching a deal, it is still far too early to predict whether or not it will be approved by our Congress.
Hong Ngan, an official from the Ministry of Science and Technology: Vietnam is a target of many complaints about intellectual property violations. Although the U.S. is very eager to encourage Vietnam to join TPP, it won’t ignore the minimum requirements for intellectual property. What should Vietnam do to meet the conditions set by the U.S.?
Lawyer Tran Huu Huynh: As for intellectual property, as far as I know, the requirements set by some negotiators are higher than the WTO’s commitments (TRIP+). In our current circumstances, it would be unfeasible to accept "TRIPS+" unconditionally. Therefore, we need to consider our production capability, enterprises’ technologies, the capability of state management agencies and other social conditions to get as clos to the TRIPS+ standards as possible.
Lawyer Eric Emerson: One of the United States’ strongest requirements for its free trade agreement partners is enforcement of IP rights. Vietnam should not expect the United States, or any other TPP country, to grant Vietnam much leeway in the area of IP enforcement.
Generally speaking, IP enforcement consists of two components: The legal structure for protecting IP rights, and actual enforcement.
Regarding the first aspect of IP enforcement, Vietnam took major steps in 2009 in reforming and strengthening its IP law. However, Vietnam will need to consider additional regulations in certain areas to make sure that there is a sound legal structure for addressing IP violations. In this area, I suspect that the TPP parties would be willing to provide some capacity-building assistance to help Vietnam formulate appropriate regulations.
Where Vietnam appears to be lagging is in the area of on-the-ground enforcement, particularly for media (I.e., CDs, DVDs, etc.) and in the area of Internet piracy. Both of these areas are difficult to address, especially for a developing country with limited resources. Here, Vietnam might ask other TPP parties for assistance, perhaps in the form of a joint committee on IP enforcement, to obtain ideas and guidance on how to combat these forms of infringement.
My sense is that in these negotiations, Vietnam’s attitude toward addressing the problem of IP infringement will be perhaps just as important as its actual track record. Recognizing that IP infringement exists and demonstrating a willingness to work collaboratively with other TPP partners to tackle this problem will go a long way toward addressing the concerns of the other TPP partners.
nhumy...@yahoo.com has a question: The US urges Vietnam to join TPP because it wants to use TPP as the counterbalance to China. So, what will be the trade relations between TPP’s members and China like?
Pham Chi Lan: The US is interested in TPP, first of all, because of its global trade benefits, and of course, it wants to strengthen its trade benefits in Asia-Pacific which has been developing very dynamically and quickly integrating into the world, especially with the two emerging economies, India and China.
In general, small economies like Vietnam all want to have balanced economic relations with big economies in the region and in the world. Besides the U.S., Vietnam and ASEAN have also been trying to strengthen the economic ties with Japan, EU, Russia and China.
If Vietnam joins TPP, this will in no way have negative impact on the Vietnam-China trade. Vice versa, with TPP, when Vietnam improves its competitiveness, the Vietnam-China trade tie can be improved and become more sustainable which will ensure the benefits of both sides.
levanphu@vnn.vn: The U.S. has proposed the regulations on the origin of goods, i.e. exporters will only be able to enjoy TPP’s privileges if raw materials used in export products are sourced from TPP’s countries. Meanwhile, China is not a TPP’s member. If Vietnam joins TPP, which production fields will be disadvantaged?
Lawyer Tran Huu Huynh: I think that we should approach the issue on a larger scale, and mention not only one concrete country, but all the countries which are not members of TPP.
As for the suggested regulations on the origin of goods, it is understood that the products exported by one member of TPP to other TPP countries mustoriginate from the inner of TPP’s bloc. For example, when Vietnam exports fabric, the fabric must have the origin in Vietnam or other TPP members to be eligible to receive preferences that TPP members offer to each other.
Therefore, the production branches and the products, which use raw materials from third countries, will not be able to enjoy them.
If TPP is signed with the suggested rules, we need to reconsider the industries such as textile and garment, footwear, electronics and wooden furniture, which use raw material from third countries, and urge businesses to use more material from domestic sources or TPP sources.
Besides, production branches in Vietnam also need to heighten the competitiveness of their products with the goods from TPP which will enjoy big preferences when they are imported to Vietnam.
Nguyen Thi Lan, 35, a securities expert in Hanoi: To date, when talking about any agreements Vietnam intends to join, experts always try to prove that the agreements will bring a lot of benefits, while they do not mention problems. Therefore, businesses only find out about the problems and challenges after the agreements were signed. Will this be any different with TPP?
Lawyer Tran Huu Huynh: Do you mean that Vietnamese experts only try to point out the opportunities, while they do not mention the challenges?
We should understand that challenges exist in opportunities, and opportunities exist in challenges.
It took Vietnam one year at least to think carefully before it decided to become the full negotiator for TPP, after it joined the three rounds of negotiations as an observer.
Hopefully that one year was enough for Vietnamese leaders to consider the pros and cons of the TPP membership as well as prepare best solutions for negotiations.
The lessons we can draw from failures and successes in the past will help us shorten the negotiation process. Of course, when considering pros and cons, we need to weigh the benefits of businesses and the community in general.
Nguyen Trung Thu, 47, from Nghe An province: As far as I know, VCCI has consulted businesses about TPP. Could you please tell us what businesses think about the agreement? Do they support it?
Lawyer Tran Huu Huynh: 96.94 percent of businesses have agreed that Vietnam should join TPP.
vietnamnet, Vietnam Economic Forum VEF
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