Trans-Pacific Partnership: A Boost for Vietnam's Manufacturing Growth
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TRANS-PACIFIC PARTNERSHIP: A BOOST FOR VIETNAM’S MANUFACTURING GROWTH Solidiance has produced this white paper for information purposes only. While every effort has been made to ensure the accuracy of the information and data contained herein, Solidiance bears no responsibility for any possible errors and omissions. All information, views, and advice are given in good faith but without any legal responsibility; the information contained should not be regarded as a substitute for legal and/or commercial advice. Copyright restrictions (including those of third parties) are to be observed. MARCH 2016 solidiance
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Transcript of Trans-Pacific Partnership: A Boost for Vietnam's Manufacturing Growth
Trans-Pacific ParTnershiP:A Boost for VietnAm’s mAnufActuring growth
Solidiance has produced this white paper for information purposes only. While every effort has been made to ensure the accuracy of the information and data contained herein, Solidiance bears no responsibility for any possible errors and omissions. All information, views, and advice are given in good faith but without any legal responsibility; the information contained should not be regarded as a substitute for legal and/or commercial advice. Copyright restrictions (including those of third parties) are to be observed.
MARCH 2016
solidiance
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THE TRANS-PACIFIC PARTNERSHIP (TPP) COMPRISES OF:
3 DRIVERS BEHIND VIETNAM'S BENEFITS FROM TPP :
THE IMPACT OF TPP ON VIETNAM’S MAIN INDUSTRIES
Source: Solidiance - www.solidiance.com
WHAT IS REQUIRED TO MAXIMIZE BENEFITS FROM TPP :
12 countries
~40% of global GDP
Large trade volumes with US & Japan
Tariff rates cut on main export & import goods
~11% of the world’s population
40%$
GARMENT & TEXTILES
FOOTWEAR, FISHERY, ARGO, WOOD & WOODEN PRODUCTS
PORTS, LOGISTICS, CONSTRUCTION, OTHER SUPPORTING INDUSTRIES (MACHINERY AND RAW MATERIALS, ETC.)
STRO
NG
MED
IUM
LOW
MEDIUM TO LONG TERM
TIM
EFRA
ME
IMPACT
IMMEDIATE
REAL ESTATE, PHARMACY, OIL & GAS
GROWTH IN MANUFACTURING SECTOR:Increase in production scaleIndustrial deepeningHigher productivity
Strategic development of supporting industries (raw materials & machinery),
and accompanying infrastructure
CONTENT
12 POTENTial imPaCT Of TPP ON ViETNam’s maNufaCTuriNg
04 Overview Of TPP (Trans-Pacific ParTnershiP)
17 CONClusiON
18 infOGraPhic
06 KEy faCTOrs driViNg ViETNam’s bENEfiTs frOm TPP
03 ExECuTiVE summary
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ExECuTiVE summaryTPP (Trans-Pacific Partnership) is a regional trade agreement among 12 countries including the US, Japan, Malaysia, Vietnam, Singapore, Brunei, Australia, New Zealand, Canada, Mexico, Chile and Peru, touching on not only traditional trade agreement areas such as commodities, services, and investment, but also on new areas such as e-commerce, supply chains, and state-owned enterprises.
As a member of TPP, Vietnam’s economic growth will accelerate as a result of the following key factors:
1. Expanded access to major global markets - especially the U.S. and Japan - will boost major exports such as textile and apparel
2. With relatively low labor costs, labor-intensive manufacturing and supporting industries will both benefit in Vietnam
3. As TPP member countries account for ~40% of Vietnam’s total exports, deeper integration with these economies will enhance Vietnam’s export performance - a major engine of the country’s growth
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OVErViEw Of TPP
Participating countries in the Trans-Pacific Partnership (TPP)
NEW ZEALAND
AUSTRALIA
MALAYSIA
SINGAPORE
CHILE
CANADA
PERU
VIETNAM
JAPAN
BRUNEI
MEXICO
USA
Source: Office of the United States Trade Representative, Solidiance Analysis
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Reduction or abolishment of trade barriers
Expanded market access
Intellectual property protection
Increased transparency
Main objectives of the Trans-Pacific ParTnershiP
To date, the Trans-Pacific Partnership comprises of 12 countries, ~40% of global GDP, and ~11% of the world’s population.
Global trade, the global manufacturing landscape, and global supply chains will be impacted and shift towards member states through tariff reductions and expanded market access.
Vietnam, the second smallest economy among TPP member countries after Brunei, is set to be a major beneficiary due to increased investment in its manufacturing sector, a deepening supply chain, and export-driven growth.
Source: Office of the United States Trade Representative, Solidiance Analysis
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TPP’s bENEfiTs fOr ViETNam: KEy driViNg faCTOrs
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Three key facTors drive vieTnam’s benefiTs from TPP:
Large trade volumes with the U.s. and japan
vietnam’s manufacturing landscape to reap significant
benefits from TPP
competitive manufacturingenvironment
Key export and import products will have tariff rates slashed
vietnam’s manufacturing environment is well-positioned to benefit from TPP’s passage due to three primary factors:
• Large trade partnerships with several member countries, especially the United States and Japan
• Increasingly competitive manufacturing sector • Tariff cuts on its major import and export goods
Source: Solidiance Analysis
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As TPP signatory countries account for ~40% of Vietnam’s total exports, the TPP’s passage will accelerate Vietnam’s exports to TPP member countries, as well as increase the country’s total export by an additional USD 68 billion by 2025.
TPP will acceleraTe vieTnam’s aLready high trade voLUMes wiTh The U.s. and JaPan
Vietnam’s largest trade partners by trade volume (TPP members in bold)
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10
20
30
40
50
60
70
2006 2007 2008 2009 2010 2011 2012 2013 2014
China EU United States Japan South Korea Malaysia Singapore Australia
USD
bill
ion
Sources: General Statistics Office of Vietnam (Vietnam GSO), International Monetary Fund (IMF), Solidiance Analysis
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What We Do
Solidiance is a corporate strategy consulting firm with focus on Asia Pacific. We advise CEOs on make-or-break deals, define new business models and accelerate Asia growth. Through our 10 offices across Asia, we provide our clients with a better understanding of intrinsic regional issues. To learn more about how Solidiance has helped many Fortune 500 & Asian Conglomerates to succeed in Asia, please visit:
http://www.solidiance.com/clients.
What We Are Focusing On
Our industry experience is centered on healthcare, industrial applications, clean technology, and technology. Our Asian market entry and growth strategy services provide the required insights and the necessary roadmap to capture a profitable market share in the region.
Additional Details
Solidiance has offices in China, India, Indonesia, Malaysia, Myanmar, Philippines, Singapore, Thailand, UAE and Vietnam. We are fast expanding and always on the lookout for exceptional people.
abOuT us
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