The TPP Impact on Vietnam: A Preliminary Assessment

        As a member of  the Trans-Pacific Strategic Economic Partnership  (TPP), Vietnam will stand to benefit from the agreement both economically and strategically, but the country will also be faced with considerable challenges. 
 

       It is estimated that the TPP may help Vietnam expand its GDP by 11% and its exports by 28% within a decade. TPP will also provide Vietnam with greater access to major markets, especially the US and Japan, and boost the export of products such as textile and apparel, seafood, aquaculture, agriculture and forestry products. 
 
        However, the TPP  is  likely  to adversely affect  industries such as  the livestock industry, dairy, soybean, corn and animal feed inputs.  The TPP is likely to generate a large FDI inflow into the country once it comes into force. The  TPP  is  likely  to  require  SOEs  or  designated  monopolies  to  operate  on  market principles. This provides  significant  impetus  for Vietnam  to accelerate  its SOE  reform, especially the equitization of these enterprises. 
 
        TTP  regulations on  intellectual property  and  environment protection will  add  costs  for some Vietnamese businesses. In the long run, however, these regulations will help drive the economy towards greater creativity and sustainability. Politically, the TPP may facilitate the mobilization of support for more economic as well as political  and  institutional  reforms. However,  it  is unlikely  to  lead  to  any  significant political liberalization.  
    
         The agreement will also help Vietnam  strengthen  its  ties with  the US and become  less economically  dependent  on China. However, Vietnam will  continue  to  seek  a balance between the two great powers while adjusting its strategic position in accordance with its perception of the China threat in the South China Sea. The TPP is likely to generate certain positive impacts on Vietnam, but such impacts should not be exaggerated, and opportunities  should be  evaluated alongside challenges.  In the meantime, the TPP should remain a case of “cautious optimism” for the country.