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![Page 1: The Trans-Pacific Partnership: Opportunities and Challenges Nathan Lane, U.S. Consulate General Ho Chi Minh City Vietnam Oregon Initiative Launch, April.](https://reader036.fdocuments.us/reader036/viewer/2022062308/56649d225503460f949f7b9c/html5/thumbnails/1.jpg)
The Trans-Pacific Partnership: Opportunities and Challenges
Nathan Lane, U.S. Consulate General Ho Chi Minh CityVietnam Oregon Initiative Launch, April 22, 2015
![Page 2: The Trans-Pacific Partnership: Opportunities and Challenges Nathan Lane, U.S. Consulate General Ho Chi Minh City Vietnam Oregon Initiative Launch, April.](https://reader036.fdocuments.us/reader036/viewer/2022062308/56649d225503460f949f7b9c/html5/thumbnails/2.jpg)
Agenda
1. What is TPP?
2. What does TPP mean for Vietnam?
3. Opportunities
Slide 2
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What is the TPP?
Slide 3
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Slide 4
12 Countries
40% of the World Economy
TPP – A Comprehensive High Standard Trade and Investment Agreement
![Page 5: The Trans-Pacific Partnership: Opportunities and Challenges Nathan Lane, U.S. Consulate General Ho Chi Minh City Vietnam Oregon Initiative Launch, April.](https://reader036.fdocuments.us/reader036/viewer/2022062308/56649d225503460f949f7b9c/html5/thumbnails/5.jpg)
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
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Ambitious
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Source: scores of provisions from FTA database.
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Dynamic scenarios
20252020
FTAAP21 APECEconomies
TPP12Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, United States, Vietnam, Canada, Japan, Mexico
TPP+ New countries join
2012 2015
TPP Scenario
![Page 8: The Trans-Pacific Partnership: Opportunities and Challenges Nathan Lane, U.S. Consulate General Ho Chi Minh City Vietnam Oregon Initiative Launch, April.](https://reader036.fdocuments.us/reader036/viewer/2022062308/56649d225503460f949f7b9c/html5/thumbnails/8.jpg)
What does TPP mean for Vietnam?
Slide 8
![Page 9: The Trans-Pacific Partnership: Opportunities and Challenges Nathan Lane, U.S. Consulate General Ho Chi Minh City Vietnam Oregon Initiative Launch, April.](https://reader036.fdocuments.us/reader036/viewer/2022062308/56649d225503460f949f7b9c/html5/thumbnails/9.jpg)
AmCham/HCMC
![Page 10: The Trans-Pacific Partnership: Opportunities and Challenges Nathan Lane, U.S. Consulate General Ho Chi Minh City Vietnam Oregon Initiative Launch, April.](https://reader036.fdocuments.us/reader036/viewer/2022062308/56649d225503460f949f7b9c/html5/thumbnails/10.jpg)
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
![Page 11: The Trans-Pacific Partnership: Opportunities and Challenges Nathan Lane, U.S. Consulate General Ho Chi Minh City Vietnam Oregon Initiative Launch, April.](https://reader036.fdocuments.us/reader036/viewer/2022062308/56649d225503460f949f7b9c/html5/thumbnails/11.jpg)
Export gains by country(gains from trade effects)
GDP ($bill) Value change ($bill) % GDP
2025 TPP FTAAP TPP FTAAPAustralia 328 9 33 2.8 9.9Brunei 9 0 0 1.8 4.7Canada 613 7 17 1.1 2.8Chile 157 5 8 3.0 5.3Japan 1,239 61 180 4.9 14.6Korea 627 48 123 7.7 19.6Malaysia 328 16 29 5.0 8.8Mexico 519 16 58 3.1 11.1
New Zealand 57 3 5 5.7 8.5
Peru 92 10 13 11.0 14.2
Singapore 232 2 -10 0.6 -4.2
United States 2,845 56 292 2.0 10.3
Vietnam 264 68 113 25.8 43.0
TPP economies 7,310 301 862 4.1 11.8
Others 20,264 -78 962 -0.4 4.7
World 27,574 223 1,824 0.8 6.6
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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
![Page 13: The Trans-Pacific Partnership: Opportunities and Challenges Nathan Lane, U.S. Consulate General Ho Chi Minh City Vietnam Oregon Initiative Launch, April.](https://reader036.fdocuments.us/reader036/viewer/2022062308/56649d225503460f949f7b9c/html5/thumbnails/13.jpg)
• 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
Tariff Reductions Create New Opportunities
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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
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FDI Gains by country(Vietnam FDI grows)
GDP ($bill) Stock increase ($bill) % GDP
2025 TPP FTAAP TPP FTAAPAustralia 1,536 10 19 0.7 1.3Brunei 28 1 0 2.8 1.2Canada 1,255 0 1 0.0 0.0Chile 444 4 3 0.8 0.7Japan 476 156 250 32.8 52.6Korea 406 17 58 4.2 14.3Malaysia 386 4 3 1.0 0.9Mexico 1,046 3 2 0.3 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
Vietnam 395 28 42 7.1 10.6
TPP economies 15,746 276 451 2.9 2.9
Others 40,335 0 895 0.0 2.2
World 56,082 276 1,345 0.5 2.4
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• 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
Reform Attracts New Foreign Investment
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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
![Page 18: The Trans-Pacific Partnership: Opportunities and Challenges Nathan Lane, U.S. Consulate General Ho Chi Minh City Vietnam Oregon Initiative Launch, April.](https://reader036.fdocuments.us/reader036/viewer/2022062308/56649d225503460f949f7b9c/html5/thumbnails/18.jpg)
Overall
• All TPP members benefit
• Emerging economies like Vietnam benefit most
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THANK YOUQuestions?
Slide 19