Another blow to Obama’s TPP after Vietnam says it won’t ratify trade pact
Vietnam’s government has stopped seeking the National Assembly’s ratification of the US-led Trans-Pacific Partnership (TPP) pact, as conditions are not sufficient following changes in the United States, the country’s prime minister said on Thursday.
“The United States has announced it suspends the submission of TPP to the parliament so there are not sufficient conditions for Vietnam to submit its proposal for ratification,” Prime Minister Nguyen Xuan Phuc told the National Assembly.
Prospects that the 12-country deal could be ratified in Washington have dimmed after Donald Trump, who pledged to tear up a giant Pacific trade pact, won the US election.
Vietnam was projected to see the biggest percentage boost to the economy of any country in the TPP – about 10 per cent by 2030, mostly thanks to textiles and apparel.
But in September, a member of the National Assembly, or parliament, foreshadowed the deal’s demise in Vietnam, saying the country would not ratify the TPP until after the US election.
The TPP, which excludes economic powerhouse China, must be ratified by all participating countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam.
The Vietnamese prime minister added that “whether to join TPP or not, the Vietnamese economy will take part in extensive integration as it has done with the current 12 trade deals.”
With President-elect Trump saying the Barack Obama-championed TPP would be “catastrophic” for the US economy and Congress, and the chance of it passing in a lame duck session looking increasingly remote, its looming demise gives China an opportunity.
China’s President Xi Jinping is expected to use this week’s Asia-Pacific Economic Cooperation summit in Lima to gain momentum for the Regional Comprehensive Economic Partnership (RCEP), which China has championed in recent years. Moving ahead on the pact, long designed as a counterweight to the TPP from which China is left out, would give it greater economic prestige in a region where it is seeking to displace US influence.
Japanese Prime Minister Shinzo Abe on Tuesday confirmed his nation is turning attention toward RCEP – which would in turn omit the US. That’s even as he plans to stop off in New York on Thursday en route to Lima to meet Trump and make a last-ditch sales pitch for the TPP.
Asia members have said it can’t be renegotiated and have urged Congress to pass it. Singapore Prime Minister Lee Hsien Loong, speaking in the US in August after meeting Obama, said America’s credibility was on the line.
“If at the end, waiting at the altar the bride doesn’t arrive, I think there are going to be people who are going to be very hurt not just emotionally but damaged for a long time to come,” Lee said.
Alan Bollard, a former New Zealand central bank governor who is executive director of the Asia-Pacific Economic Cooperation secretariat, suggested Trump may transplant some elements of TPP into another form to keep the US engaged in a region that Standard Chartered Plc estimates will account for 58 per cent of global growth next year.
“There would continue to be a lot of interest from almost all the economies in Asia for easing trading conditions with the U.S.,” Bollard said.
“But there is the question of whether there has to be a formalised legally binding agreement like TPP or not.”
New Zealand Prime Minister John Key said the deal was not going to happen anytime soon. Still, he told Radio New Zealand: “Trump will get the same advice from the State Department, from the Pentagon, from the Treasury that President Obama got, which is that you need to have influence and you need to have a presence in Asia, and to do that free trade locking you in there is the way to do it.”
Reuters, Bloomberg, Agence France-Presse, Xinhua