Hiệp định thương mại xuyên Thái Bình Dương (TPP) và triển vọng cho quan hệ thương mại giữa Việt Nam và Mỹ

Khóa luận tốt nghiệp về đề tài Hiệp định thương mại xuyên Thái Bình Dương (TPP) và phân tích triển vọng quan hệ thương mại giữa Việt Nam và Hoa Kỳ Khóa luận tập trung phân tích: + Những vấn đề cơ bản về TPP + Quan hệ thương mại Việt Mỹ + Cơ hội và thách thức trong quan hệ Việt Mỹ khi VN tham gia TPP + Một số đề xuất dành cho VN khi tham gia vòng đàm phán TPP Khóa luận được viết bằng Tiếng Anh, gồm 94 trang, bố cục rõ ràng, mạch lạc, trích dẫn Harvard, có minh họa cụ thể về số liệu, được đánh giá với số điểm cao (9,410)

TABLE OF CONTENTS

ACKNOWLEDGEMENTS i

LIST OF ABBREVIATIONS ii

LIST OF FIGURES AND TABLES iii

INTRODUCTION 1

CHAPTER 1: THEORETICAL BACKGROUND 5

1.1 Free trade agreement (FTA) 5

1.1.1 Origin and concept of free trade agreement 5

1.1.2 Types of free trade agreement 6

1.1.3 Main characteristics 7

1.1.4 Main contents of a free trade agreement 9

1.1.5 Impacts of free trade agreement 11

1.1.6 The trend of free trade agreement 13

1.2 Trans-Pacific Partnership Agreement (TPP) 16

1.2.1 Concept of Trans-Pacific Partnership Agreement 16

1.2.2 Origin 17

1.2.3 Membership and main characteristics of TPP members 18

1.2.4 Scope of Trans-Pacific Partnership 22

1.2.5 Negotiating process and the main results 23

1.2.6 Main features of Trans-Pacific Partnership 29

1.2.7 Advantages and disadvantages of TPP for participating members 30

CHAPTER 2: PROSPECTS FOR TRADE RELATIONS BETWEEN VIETNAM AND THE UNITED STATES 35

2.1 Overview about U.S market 35

2.2 Brief history of bilateral trade relations 38

2.3 Turn over trade between Vietnam and U.S 40

2.3.2 Bilateral turn-over in trade 48

2.4 Opportunities and challenges of VN – U.S trade relations in the context of TPP 57

2.4.1 U.S.’s objectives and interests in TPP 57

2.4.2 Challenges Vietnam and the United States have to face in TPP 59

CHAPTER 3: RECOMMENDATIONS FOR VIETNAM IN TPP NEGOTIATIONS TO PROMOTE TRADE RELATIONS WITH THE UNITED STATES 66

3.1 Attitudes of Vietnam towards TPP and U.S market 66

3.1.1 Attitudes towards TPP 66

3.1.2 Attitudes towards U.S market 71

3.2 Personal recommendations for the TPP negotiation in order to promote Vietnam – U.S relations 71

3.2.1 Process of preparation 72

3.2.2 Process of negotiation 73

3.2.3 Process of implementation 78

CONCLUSION 81

REFERENCE iv

APPENDIX viii

Additionally I would like to send my sincere thanks to all my teachers in University of

A, particularly teachers in Faculty of Economics and International Business for the fundamental knowledge as well as soft-skills that I have accumulated at university

My respect is also intended for many authors, writers and international organizations for providing many precious data relating to aspects of the thesis Not only do these documents save me a lot of time in searching information but they also play as an important foundation for my points of view

I am really indebted to my parents, my close relatives and all my friends for their great supports Their material and spiritual encouragement is a strong motivation for me to get over all difficulties during my period of studying

Anyhow I myself hold the sole responsibility for shortcomings and drawbacks of the study and highly appreciate the feedback of readers which can help to better this thesis

Student (name)

GATT General Agreements on Tariffs and Trade

MUTRAP Multilateral Trade Project

NMPF

PNTR

National Milk Producer Federation Permanent Normal Trade Relations

USTR United States Trade Representative

WIPO World Intellectual Property Organization

iii

LIST OF FIGURES AND TABLES

Table 2.2 Trade profiles of current TPP Negotiating Partners 40

Table 2.4 Growth in Bilateral Trade between Vietnam and the United States 50 Table 2.5 Top 10.U.S Exports to and Imports from Vietnam in 2010 52 Table 3.1 Proposed open level of negotiated sectors in TPP

Table A.1 Trade agreement in TPP countries

Table A.2 Intra-TPP Merchandise Trade, 2010

69 viii

x

Figure 2.2 Milestones in Vietnam – U.S trade relations 38

Figure 2.5 Bilateral U.S Merchandise Exports to TPP Countries 43 Figure 2.6 Bilateral U.S Merchandise Imports from TPP Countries 44 Figure 2.7 Total U.S Merchandise Imports from and Exports to TPP Countries 47

Figure 2.9 U.S Clothing Imports from Vietnam 53

INTRODUCTION

International integration has become an indispensible trend in modern economy where success of trade agreements is the prerequisite tool to promote bilateral trade relations With a perception that if Vietnam remains out of this trend, the country will be absolutely lagged behind, according to official statistics of the country, Vietnam has established diplomatic relations with 171 countries and territories, become official members of ASEAN (1995), APEC (1998) and WTO (2006) In addition, Vietnam has actively negotiated free trade agreements with important partners One of recent achievements is Trans-Pacific Partnership Agreement (TPP) which is considered as a turning point in the country’s development Firstly, in the context of Doha Round’s deadlock, TPP is regarded as a 21st century FTA or a next generation FTA with a wider scope and a higher level of liberalization Secondly, Asia - Pacific region which emerged from the global financial crisis as a growth driver and anchor of stability of the global economy accounted for 62.3 percent of Vietnam’s total export-import turn-over in 2011 (Vu Thang Trung, 2011)

When all things are taken into account, negotiation in TPP may contribute to a potential opportunity in promoting trade relations with member countries, especially the United States – the most powerful member as well as the most important trading partner of Vietnam It is a large but strictly competitive market where privileges can act

as strategic strengths In addition, although Vietnam – U.S trade agreement (2001) and WTO’s agreements were signed and implemented, there have still existed a lot of barriers such as tariff and non-tariff measures, anti-dumping policy and so on which limit market access of the two countries As a consequence, both governments and businesses have paid much attention to the progress of TPP ass well as its negotiated issues with a question whether it can improve the current situation or not With the

urgency of the issue, the topic: “Trans-Pacific Partnership Agreement TPP:

Prospects for trade relations between Vietnam and the United States”, therefore, is

considered as a practical choice for the study

2 Literature review

TPP is a quite new issue which has hardly been mentioned in comprehensive researches or studies and just appeared in reports of several related organizations

In U.S., there are some reports from Congressional Research Service such as “The

Trans-Pacific Economic Strategic Partnership Agreement” written by Ian F Fergusson

and Bruce Vaughn in December 2009 and “Trans-Pacific Partnership (TPP) countries:

Comparative trade and Economic analysis” written by Brock R Williams in February

2012 The former introduces the origin, membership and controversial issues in TPP as well as the participation of U.S while the latter focuses on the whole economy of the Asia-Pacific Rim and detailed economies of each economy as well as the trade relations between this region and U.S

In Vietnam, reports from Vietnam Chamber of Commerce and Industry (VCCI) can

be considered, including “The Trans-Pacific Partnership Negations: Opportunities and

Challenges for Vietnam” sponsored by this organization and Miller & Chevalier

Charted which mentions overview about TPP; objectives, interests and policies of U.S

and challenges, opportunities to Vietnam or “Trans-Pacific Partnership Agreement

TPP: Recommendations for negotiations” which results from the cooperation of VCCI

and MUTRAP, introducing the basic contents of TPP and focusing mainly on

suggestions in the negotiations In addition, there is graduation thesis “Trade relations

between Vietnam and participating countries in the TPP: Situation and Solutions”

written by Pham Cong Minh, the contents of which are about the parties in TPP negotiations, their current trade relations with Vietnam and solutions to improve the situation

Relating to Vietnam – U.S trade relations in the context of TPP, there are also

“Vietnam in the TPP: opportunities, priorities and challenges for U.S business”

sponsored by National Foreign Trade Council and Miller & Chevalier Charted in February 2011 or “U.S – Vietnam Economic and trade relations: Issues for 112 th

Congress” by Michael F Martin in April 2011 However, the first study mainly

focuses on the difficulties confronting U.S economy when this country takes part in TPP while the second one investigates the bilateral trade relations under the effects of many other factors such as VN-U.S trade agreement, APEC, WTO and so on

All in all, this thesis, therefore, is the first one to focus on TPP and the prospects this

agreement brings about for trade relations between Vietnam and the United States

3 The aim of the study

The study is carried out in order to:

- Do research on basic issues of FTA and TPP In the case of FTA, origin, concept, classification, characteristics, contents, impacts and the trend of development are considered while concept, origin, membership, negotiating process and main results, features as well as advantages and advantages for participating parties are the main aspects of TPP;

- Analyze the role and impacts of TPP on trade relations in globalization, and opportunities and challenges for Vietnam-U.S cooperation in details;

- Offer some suggestions for Vietnam in the next negotiation rounds

4 The subject of the study

The study mainly focuses on four objectives: (i) TPP with origin, membership, major contents, results from negotiation rounds and effects to member countries; (ii) the current situation of Vietnam – U.S trade relations with brief milestones and trade turnovers in recent period; (iii) prospects for trade development between the two countries with opportunities and challenges from controversial issues; and (iv) the recommendations for the next negotiation rounds from preparation, negotiation to implementation

5 The scope of the study

In terms of time: TPP is currently under negotiation so in the framework of thesis, the

study focuses on basic issues in the first 10 rounds from 2009 to 2011

In terms of concerning aspects: The concept “trade relations” include a wide inner

meaning which can refer to FDI, exchange of goods and services or investment Moreover, Vietnam-U.S trade relations can be affected by many other factors such as political and social events or other trade agreements However, the thesis will focus on the opportunities and challenges in merchandise trade with U.S that TPP negotiations bring about from the view of Vietnam

This thesis follows the methodology of collecting and analyzing documents in order to understand the contents of P4 agreement, professional reports and academic studies In addition, methodology of comparing is popularly used with the aim of giving assessments for pros and cons of TPP and the development in the bilateral trade relations Last but not least, synthesizing is inevitable method to give conclusions for the whole study and the recommendations for Vietnam in the next rounds

These data and figures are collected mainly from the Internet, reports and articles of some organizations such as WTO, Congressional Research Service, VCCI and WTO center as well as studies of students and lecturers in Hanoi Foreign Trade University

7 The structure of the study

Besides the introduction, conclusion, list of tables and figures and references, the study

is divided into three main parts, including:

Chapter 1: Theoretical background on FTA and TPP

Chapter 2: Trade relations between Vietnam and the United States

Chapter 3: Recommendations for Vietnam in the next TPP negotiations to promote

trade relations with the United States

CHAPTER 1: THEORETICAL BACKGROUND

1.1 Free trade agreement (FTA)

1.1.1 Origin and concept of free trade agreement

In the context of globalization, free trade agreement (FTA) is not a new concept which has appeared for decades It first appeared in GATT (1994, Article XXIV, clause 8)

through the provision of free trade area: “A free-trade area shall be understood to

mean a group of two or more customs territories in which the duties and other restrictive regulations of commerce are eliminated on substantially all the trade between the constituent territories in products originating in such territories” In other

words, in a free trade area, member countries commit to eliminate taxes and other

commercial rules for “products originating in such territories” which maintains

favorable trade policies among them In addition, GATT mentions mainly trade in goods; however, when WTO was established on the first of January 1995, concept was widened to trade related issues

After that, each country depending on their viewpoint and development can understand

in their own way provided that the core values are remained According to opinion of

Australian government on official website of this country (DAFF, 2011), “FTAs are

international agreements between two or more countries to eliminate tariffs on substantially all trade between them Modern FTAs generally go beyond eliminating tariffs to include commitments on services, customs cooperation, intellectual property, foreign investment, and other issues that will assist trade” Although issues are not

limited in trade in goods, elimination of commercial barriers is applied for

“substantially all trade” It means that there are items that are regarded as sensitive and automatically applied protectionism The United States, a FTA pioneer, has established its own style with additional conditions that in order to promote market access, technical factors such as regulations of Sanitary and Phytosanitary, labor rights; Intellectual Property Rights, government procurement and dispute settlement are also

mentioned It means that U.S has set up a stricter and more comprehensive standard

for FTA than that in GATT or other countries

When all is said and done, although the scope of a FTA varies from country to

country, there is still a point in common – an agreement between two or more

countries (or territories) with the aim to liberalize one or some group of items by reducing taxes, establishing regulations to facilitate trade in goods, service and cash flow between member countries In FTA, a country can apply tariff and non – tariff

measures to partners beside the agreement Nowadays, in some cases, FTAs are called under different names such as Economic Partner Agreement (EPA) or Closer Economic Partnership (CEP)

1.1.2 Types of free trade agreement

FTAs can be classified in different ways with different criteria such as number of participants, region, style, liberalization level This thesis will focus on the first criterion - number of involving parties which divides FTA into two main types: regional FTA and bilateral FTA

(a) Regional FTA

In comparison with WTO’s agreements, regional FTAs (RFTAs) set a narrower target partners with the involvement of fewer parties but three at least Economic Partner Agreement (EPA), therefore, is a case of RFTA

In 1980s and at the beginning of 1990s, establishment existed among countries close each other in geography Among well known RFTAs are Asia Free Trade Area (AFTA), Dominican – Republic Central America FTA (DR-CA FTA), Central European FTA (CEFTA), G-3 FTA, North American (NAFTA) and South Asia (SAFTA) However, since the second half of 1990s, open region has appeared to meet the demand of many large economies to extend their markets Consequently, more and more regional FTAs were established which attracts the participation of nations from different areas AFTA, a typical example, only included members within Southeast

Asia region at the early time, has recently opened to Japan, China and South Korea – among the biggest economies in Asia

To sum up, under a new concept, RFTA is understood as an agreement among a group

of at least three members in order to establish a free trade zone regardless of their locations

(b) Bilateral FTA

Bilateral FTA (BFTA) is a free trade agreement between two states, two regional blocs

or a state with a regional bloc Some typical examples can be listed: FTA between

Australia and U.S (AUSFTA), Singapore and Australia (SAFTA); FTA between ASEAN and Australia and New Zealand named ASEAN – Australia – New Zealand Free Trade Area (AANZFTA); or FTA between ASEAN

With fewer signing parties, negotiating process in BFTA is simpler and less time – consuming which contributes to its increase in quantity recently Nevertheless, it is said that BFTAs are a first step towards multilateral free trade, others point out that BFTAs are discriminatory and lead to fragmentation of the world trade system and decline in the multilateral free trade In fact, when Doha Round faces a standstill, BFTAs have mushroomed and taken a role as safe choice for almost every nation

1.1.3 Main characteristics

It is said that FTA, especially EPA is a progress in comparison with normal trade agreements and WTO’s principles in liberalization level, which is proved in its major characteristics

(a) Scope and level of liberalization

As written above, the scope of FTA involves in substantially all trade related issues among members They are not only trade in goods, service or investment but also technical standard, labor or many other issues that have hardly been mentioned in any

(b) Participating parties

Firstly, geographical distance is no longer an important factor In reality, over 80

percent of FTAs in Southeast Asia take place among countries separated in location It can be explained that the development of technology makes transportation and communication fees cheaper and cheaper Equally important, demand for market extension is an urgent issue, especially in large economies such as U.S., China and so

on Moreover, in some cases, differences between remote regions create completion and creativity in cooperation

Secondly, there are more FTAs signed between parties different in economic

development as well as politic viewpoint For example, developed economies - the strengths of which are technology and high – tech products can be supported by developing ones - the strengths of which are natural resources, cheap labor and vice versa Besides economic reasons, politic motivations cannot be ignored in these cases

Lastly, there is no limitation in quantity that a nation can take part in Consequently,

beside a BFTA, two parties can involve in many other RFTAs or WTO’s agreements, which leads to “noodle bow” – overlapping among principles and provisions

(c) Schedule for implementation

It can easily be seen that schedule for implementation in FTAs is quicker than that in WTO’s principles In fact, from GATT to WTO, there were 8 negotiating rounds (48

years) with first 6 rounds concentrating on tax reduction However, average tariff level for manufacturing industry is still at about four percent Meanwhile, schedule in FTAs, especially BFTAs lasts more quickly When BFTAs come into effect, up to 90 percent

of total items will be applied preferential tariffs, the rest will be gradually reduced to zero within two or three years Although FTAs have a list of excluded goods, its quantity is quite small in comparison with WTO framework However, in general, implementation varies from FTA to FTA depending on signing parties’ capability and development level

1.1.4 Main contents of a free trade agreement

Contents of a FTA are determined mainly by member countries on common principles; however, basic issues can be listed as follows

(a) Liberalize trade in goods

The first and also the prerequisite content of a FTA is liberalization of trade in goods which can be shown in the following aspects:

Tariff and non-tariff measures: In provisions for commodities, elimination of tariff

and non tariff barriers is indispensable content Parties commit to gradually remove tariff and apply duty at zero percent for almost every item It is regulated in categories: items with immediate tax reduction, items with gradual tax reduction companied by its schedule, prohibited items and excluded ones Nowadays, there are fewer and fewer excluded commodities, and if there is, they often belong to agriculture sector or relate

to national security, culture or traditional customs In addition to a list of tax reduced items, schedules for implementing commitments are clearly stipulated This schedule will be based on potentials, capability of liberalization of each nation as well as the characteristics of each item Regulations on quotas and other technical barriers are also mentioned more and more in modern FTAs

Origin of commodities: Rule of origin stipulates a certain level of domestic content It

means that imported goods which meet this standard can enjoy lower duties in comparison with the third countries

Customs procedures are simplified according to international standards and commerce is encouraged to minimize expenditures and facilitate flow of goods

e-(b) Liberalize trade in service

The second content which plays as the major role in FTAs is liberalization of trade in services under which signing parties commit to open service market in spite of different scope and level For example, in agreements between developing countries, trade in services is less regarded than trade in goods However, if there is participation

of U.S or other developed economies, opening level in services is very high, even absolute in some cases

(c) Facilitate investment

The third content of FTAs is investment facilitation which includes commitments of eliminating barriers to investors from member countries so as to support them to make transactions and so on The basic purposes are to protect investors and investment activities and apply MFN on principals: prohibit investment barriers, guarantee adequate compensations in case of nationalization and ensure free liquidity

(d) Promote commercial cooperation among participating parties

Another content that is usually seen in FTAs is cooperation negotiation to enhance trade relations between partners Some sectors are worth highlighting here are: human resource; tourism among members; scientific and technological research; information technology, telecommunications and other related issues; the media trade and services (organize conference, forum, market research delegation and so on; medium and small enterprises (SMEs)

(e) Others

Provisions of intellectual property right have also been mentioned in FTAs recently

Countries agree to implement positive measures so that databases can be spread widely

to residents and licenses can be issued quickly and simply Among the most popular issues are food market, biological products, business tips, information access and so

on

Besides, U.S and developed countries offer other issues such as government

procurement, competition, labor and environment to negotiate in FTAs For example,

in government procurement, parties agree to reduce the ceiling level for items of its category or unfair competition will be sanctioned severely

1.1.5 Impacts of free trade agreement

(a) Positive impacts

 Promote economic integration

When Doha Round is in danger of collapse, RFTAs and BFTAs ensure the foundation

of free trade From the view of regional trade, FTAs set up the foundation of free trade area and enhance economic cooperation, which equips participating parties with more powerful position as well as more influential voice in the world In other words, FTAs are a prerequisite factor to establish custom unions, free trade regions and cultivate cooperation among member countries

 Provide member countries more opportunities

From the view of each economy, benefits from FTAs, especially BFTAs can be clearly seen Strengths of developing countries can be admitted fairly while developed countries can expand market with preferential conditions and promote foreign investment

In details, FTAs are conductive to either quantitative or qualitative impacts Some of them can be quantified, namely: human resource; tourism among members; scientific and technological research; capital market; information technology,

telecommunications and other related issues; the media; trade and services Besides, there are some impacts that cannot be justified exactly by indexes such as increasing competition; eliminating protectionisms that are in favor of one or more domestic enterprises and so on

 Strengthen strategic partnership

Besides economic benefits, FTAs are also an important and essential tool to achieve political and defensive targets such as enhancing relations with strategic partners or ensuring national security FTAs between U.S and Jordan or Israel can be taken as typical example It means that although economic benefits from these two FTAs are insignificant, they can assure U.S.’s security and diplomatic policies

(b) Negative impacts

 Deflect trade, multilateral free trade and resource distribution

Firstly, distortion in free trade happens when price of goods imported from members is

lower than that from non-members This is attributed to the fact that countries tend to import commodities from partners insides a FTA than outside ones

Secondly, free trade is also deflected when a country just concentrates on trade

relations with one partner; as a result, it will be distracted in relations with other countries A BFTA between ASEAN with U.S and Japan, for example, can deflect trade inside ASEAN as well as decrease member countries’ benefits from AFTA

Last but not least, process of research and negotiation require a lot of financial and

technical resources Consequently, for a small economy, concentration on FTAs can reduce resources for multilateral negotiation Larger economies, despite redundant resources, may lose attention to political strategies if they are so absorbed in FTAs

 Contribute to unfairness for developing countries to enter

As mentioned above, there have been more and more agreements signed between developing and developed countries The imbalance in development will result in a negative effect that developed nations will impose their liberalization patterns on

developing ones Furthermore, in case FTAs are signed with politic target, less powerful parties may have to satisfy politic conditions of more powerful parties

 Lead to conflict between regional economic alignment with MFN principles

in WTO

It is a case that WTO gives permission for establishing BFTAs and RFTAs whereas MFN principle requires a nation to treat equally to all members FTAs in general mean that countries inside agreement apply tariffs with different levels from that for outside countries This contributes to discrimination in WTO framework as well as within economic blocs

All in all, with both positive and negative impacts exist in parallel, a nation, before

entering a FTA, should invest into research economic, politic and social conditions carefully so that risks can be maximized

1.1.6 The trend of free trade agreement

(a) The common trend in the world

Trade integration experienced three generations of FTAs: the first focuses on liberalizing trade in goods (reduce tariff, eliminate non tariff measures); the second expands the scope to certain aspects of service sectors (eliminate conditions to access related service market) and the last continues to expand into service and investment sectors

There have been more and more FTAs of different scales However, after global crisis

in 2008 and in the deadlock of WTO - particularly the Doha Round, the last 10 years have witnessed the mushrooming of RFTAs By the end of March 2008 there had been

209 regional trade agreements notified to the WTO, 119 of which are RFTAs Of the

119 FTAs notified to the WTO, there were 96 FTAs (81 percent) which were signed and taken into effect in the period 1995-2007 Notably, 69 FTAs (72 percent) were

formed in 2001-2007 when the Doha Round happened (the WTO Secretariat cited by

Nguyen Minh Phong, 2010)

Many countries and regions seem quite active in signing and participating in FTAs Even nations that ever paid much attention to WTO and the multilateral trading system

as the United States, Japan and EU have also changed Some others countries which pursue FTA policies in the "axis spokes” negotiate FTAs with as many partners as possible and play as the axis of the "system spokes" Consequently, enterprises and foreign investors in these countries enjoy more favorable conditions when they access markets of countries in the "spokes system" than investors in other ones In this case, FTAs will not only create opportunities to approach foreign markets, but also significantly increase attractiveness of investment environment

(b) Situation of negotiating and signing FTAs in Vietnam

Vietnam has already participated in FTAs with 15 countries under the framework of two BFTAs: Vietnam - Japan Economic Partnership Agreement (VJEPA), Vietnam- Chile FTA as well as 6 RFTAs of ASEAN with China, Korea, Japan, Australia, New Zealand and India According to MUTRAP, trade proportion between Vietnam and FTA partners has taken nearly 60 percent of total international trade in Vietnam, accounting for nearly 50 percent of exports and nearly 70 percent of imports (MUTRAP, 2009) Furthermore, the fact that FTA between Vietnam and EU and TPP are on process of negotiation is the remarkable events

Basically, Vietnam also obtains advantages in FTA negotiations by utilizing the momentum of reforming under WTO commitments However, FTAs with the higher level of liberalization will be actual challenges Fortunately, with FTAs signed under the framework between ASEAN and its partners (called ASEAN +), Vietnam have gained flexible schedule because the country belongs to the group of less developing nations For example, as stated in a website of International Business and Law Academy, the roadmap of Vietnam’s tax cut is 5-6 years longer than that of some other partners In addition, while import tariff for 90 percent of goods from ASEAN in

China has fallen to about zero to five percent, reduction in Vietnam has just

implemented for 30 percent of tariff lines

However, in the last time, there have been some limitations and weaknesses Firstly, Vietnam has joined FTAs passively As a result, the country cannot well prepare some necessary conditions to participate Secondly, there exist differences in the concept of FTAs which cause unclear strategic plans Thirdly, Vietnam has not able to encourage the whole society to make effective use of incentives and opportunities from FTAs yet Hence, trade balance and balance of payment have not been improved and negative impacts of liberalization have not been restricted

To sum up, although Vietnam has been quite active in negotiating FTAs, the country

has not made effective use of opportunities that FTAs bring about, particularly potentials in bilateral association and cooperation The cause is chronic limitations in the mechanism and structure of its own economy which should be taken into account in the next negotiations

(c) Situation of negotiating and signing FTAs in the United States

The United States currently is involving in negotiating an assortment of FTAs These FTAs range from BFTAs with small trading partners to RFTAs that could have significant effect on its economy

On regional level, the United States signed an agreement on NAFTA and the Dominican Republic-Central America – United States FTA (CAFTA-DR) There have existed some RFTAs that have been negotiated for a long time but not come to an end yet such as FTA of Americans (FTAA), U.S – Southern African Customs Union FTA

or U.S – Andean FTA However, at the time being, TPP seems to be a strategic RFTA that U.S makes effort to pursue On bilateral level, the United States has free trade agreements in force with 12 countries These are:Australia, Bahrain, Colombia, Chile, Israel, Jordan, Morocco, Oman, Panama, Peru, Singapore and South Korea Besides, there are some pending BFTAs such as FTAs between US and Thailand, US and

United Arab Emirates as well as US and Malaysia More recently, President Obama signed FTAs with Colombia and Panama in 2011, but the agreements have not been implemented

As mentioned above, U.S has a clear concept with strict requirements for FTA The fact that a FTA with complete liberalization is always U.S.’ target should be kept in mind by developing partners With a high quantity of involved FTAs, U.S also becomes a leader of free trade movement, standing behind WTO However, Doha Round which has lasted for such a long time partly weakens position of U.S in the world In addition, a lot of pending BFTAs adversely affect partners’ belief This explains why the United States has diverted into RFTAs with the desire to establish a high standard FTA in recent time

1.2 Trans-Pacific Partnership Agreement (TPP)

1.2.1 Concept of Trans-Pacific Partnership Agreement

Trans-Pacific Partnership (TPP) is indeed a new issue that has just appeared for a few recent years; as a result, its concept has not been established completely In order to have a comprehensive view, some different sources should be mentioned

On a report for Congressional Research Service (Brock R Williams, 2012), TPP is

defined as “a proposed regional free trade agreement (FTA) currently under

negotiation between Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, the United State and Vietnam In addition, TPP also known as the Trans-

Pacific Strategic Economic Partnership Agreement was established with the aim noted

in Article 1.1.3 that: “The Parties seek to support the wider liberalization process in

APEC consistent with its goals of free and open trade and investment.” In these

concepts, there are some main points in common that should be considered

Firstly, it is “also known as the Trans-Pacific Strategic Economic Partnership

Agreement” – P4 agreement and “currently under negotiation” It means that although

TPP is said to be an unprecedented FTA, the negotiated contents are based on P4

Agreement However, up to now, the negotiations have not been finished yet

Secondly, TPP, in nature, is “a proposed regional free trade agreement” In other

words, the agreement has implications for regionalism – further liberalization of economies of Pacific Rim However, a special point is that it is the first RFTA linking three continents – America, Asia and Oceania

Last but not least, TPP’s goal is not only free but also open trade and investment The

negotiating partners have agreed to allow a living agreement which can include new members in order to set up the basis for a FTA of the Asia – Pacific (FTAAP)

When all are said and done, TPP which has its roots from P4 agreement is a proposed

regional free trade agreement (FTA) currently under negotiation between 9 APEC countries with the aim to support the wider liberalization process in Pacific region with the goal of free and open trade and investment

1.2.2 Origin

P4 Agreement was initially conceived in 2003 by Singapore, New Zealand, and Chile

as a path to trade liberalization in Asia-Pacific region which is known as the Pacific Three Closer Economic Partnership (P3 CEP) After that, Brunei attended several negotiating rounds as an observer, and ultimately joined the P4 agreement as a founding member The P4 Agreement then was signed by New Zealand, Chile, Singapore and Brunei on March 6, 2005 and came into force on May 26, 2006 with commitment to encourage the accession to this Agreement by other economies

Two years later, P4 Agreement began negotiations on investment and financial services In September 2008, U.S expressed interest to participate P4 Agreement members then entered preliminary negotiations to lay the groundwork for its ultimate accession In November of the same year, Australia, Peru and Vietnam and in October

2010 Malaysia announced that they also intended to join the negotiations, which raise

total members up to 8 (until November 13, 2010 Vietnam participated as a full member) Since then, the expanded P4 Agreement was officially renamed the Trans-Pacific Partnership

1.2.3 Membership and main characteristics of TPP members

(a) Overview about existing and potential members

Existing members: The 9 countries that constitute the current group of TPP

participants are economically and demographically diverse

Figure 1.1.The TPP countries in 2010

Unit: billion USD

Source: FTA data from the United States Trade Representative; Population and GDP

data from International Monetary Fund, “World Economic Outlook”, September 2011; Trade data from the U.S International Trade Commission

As shown in Figure 1.1 (the United States Trade Representative, International

Monetary Fund, U.S International Trade Commission 2011 cited in Brock R

Williams, 2012, p.5), the United States is much larger than the other members in terms

of its economy and population Compared to the next closest TPP members in each category, the United States has nearly four times as many people as Vietnam and almost 12 times the GDP of Australia GDP per capita at PPP ranges from just over 3,000 USD in Vietnam to over 56,000 USD in Singapore, a small, trade –dependent

Currently, Canada, Japan and Mexico have announced their intent to seek consultations with existing participants on the possibility of joining the negotiations In the future, this number is expected to continue increasing, which can be seen in the figure

Brunei $12 0.4 $48,333 2.60 Chile $203 17.2 $15,040 5.19 Malaysia $238 28.3 $14,744 7.19 New Zealand $141 4.4 $27,130 1.66 Peru $154 29.6 $9,358 8.79 Singapore $223 5.2 $56,694 14.47 Vietnam $104 88.3 $3,143 6.78 Non-U.S TPP Total $2,312 195.6

United States $14,527 310.0 $46,860 3.03 Total $16,839 505.6

Near-Term Potential

Japan $5,459 127.6 $33,885 3.96 Mexico $1,034 108.6 $14,406 5.42 Total $8,070 270.3

Hong Kong $224 7.1 $45,944 6.97 Indonesia $707 237.6 $4,347 6.11 South Korea $1,014 48.9 $29,997 6.16 Papua New Guinea $10 6.5 $2,307 7.03 Philippines $200 94.0 $3,920 7.63 Russia $1,480 142.9 $15,612 4.00 Taiwan $430 23.2 $35,604 10.88 Thailand $319 63.9 $9,221 7.78 Total $10,262 1,965.5

Source: International Monetary Fund, “World Economic Outlook”, September 2011

Table 1.1.APEC Member Economic Statistics, 2010

(b) Remarkable economic issues

As shown in Table 1.1 (International Monetary Fund cited in Brock R Williams, 2012,

p.3), TPP countries take up approximately one half of total GDP and one-fifth of total population of APEC If potential members are included, the first index is up to nearly

69 percent while the second index stands at around 28 percent This reflects the impacts of TPP in APEC as well as it prospects for establishing a free trade area of Asia – Pacific region

Existing Trade and Economic Agreements: TPP participants belong to various

regional and bilateral trade and economic agreements In addition, they have FTAs in effect with each other as well as with countries outside TPP agreement

Figure 1.3.Existing FTAs among TPP members

In Force Awaiting Implementation or in Negotiation

Source: Data from individual TPP government websites and the WTO’s trade

agreements database

Figure 1.3 (TPP government’s websites and the WTO’s trade agreements database

cited in Brock R Williams, 2012, p.11) shows that only the United States and Peru have agreements with fewer than five of the other TPP members Singapore has

agreements in place with the entire TPP membership Moreover, ASEAN and P4 play a large part in this interconnectedness with each combining four TPP economies into a free trade area

1.2.4 Scope of Trans-Pacific Partnership

Although scope of TPP has not been justified specifically, it can be referred from common characteristics of a FTA as well as the current contents of P4 Agreement In other words, TPP is stipulated by at least three factors: the next generation FTA, the development of P4 Agreement and high standard, 21st century template

In principle, FTAs require a deeper open level than normal agreements as mentioned above Trade integration and globalization experienced three generations of FTAs as mention in 1.1.6 Recent FTAs (especially FTAs with U.S.’s participation) have witnessed a new trend with related trade issues such as labor, environment negotiated popularly As a FTA which was born in the last few years, TPP can hardly deviate from this trend, especially when the agreement is expected to establish a high standard,

21st template for other FTAs In addition, with P4 Agreement playing a role as a background, TPP is estimated to widen and diversify sectors committed in P4 which itself includes quite deep commitments

TPP, therefore, covers all trade related issues: (i) traditionally core including industrial

goods, agriculture, and textiles as well as rules on intellectual property, technical

barriers to trade, labor, and environment; (ii) cross-cutting issues such as making the

regulatory systems of TPP countries more compatible so U.S companies can operate more seamlessly in TPP markets, and helping innovative, job-creating SMEs to

participate more actively in international trade and (iii) new emerging trade issues

such as addressing trade and investment in innovative products and services, including digital technologies, and ensuring SOEs compete fairly with private companies and do not distort competition in ways that put U.S companies and workers at a disadvantage

1.2.5 Negotiating process and the main results

The structure of negotiation: Negotiated issues in TPP are divided into 20 working

groups, including Market Access; Technical Barriers to Trade; Sanitary and Phytosanitary Measures; Rules of Origin; Customs Cooperation; Investment; Services; Financial Services; Telecommunications; E-Commerce; Business Mobility; Government Procurement; Competition; Intellectual Property; Labor; Environment; Capacity building; Trade Remedies; Legal and Institutional; and Horizontal Issues This is not a definitive list and appears to be changing over time

During each round, the Chief Negotiators meet separately during each round to consider:

- Management issues such as negotiating process, new membership, Ministerial Meetings, media coverage and next steps;

- Horizontal issues such as development, SMEs, transparency, competitiveness and regulatory coherence; and

- Reports, decision points and the work programs submitted by the individual working groups

A unique feature of TPP negotiations is the stakeholder consultations These

stakeholder consultations take the form of seminars, briefings and presentations where stakeholders are welcomed to share their points of view with each other as well as negotiators They have come from the industry, civil society as well as specific labor and environment interest groups There is also a session where the Chief Negotiators collectively meet with the stakeholders who want more direct consultations

Process of negotiation: In September 2008, comprehensive negotiations for the United

States to join the P4 Agreement were launched informally The first round of formal negotiations was originally scheduled to commence in March 2009, with Vietnam expected to join as an observer; and Australia and Peru intending to participate However, with the intervening change in U.S administration, the first round of

negotiation was deferred until March 2010 when the Obama administration conducted

a general review of U.S trade policy

By the end of 2011, the TPP has witnessed 10 formal negotiation rounds within two years

(a) The first round of TPP negotiations was held in Melbourne on 15th to 19thMarch 2010, with the participation of over 200 officials from 8 member countries Australia, US, New Zealand, Chile, Singapore, Brunei, Peru and Vietnam

Firstly, TPP officials exchanged views on issues that should be covered, especially

cross-cutting issues They focused on how to make doing business faster, cheaper and easier, even for SMEs under a region of regulatory coherence, transparent competition

Secondly, TPP Parties agreed on a substantial forward work program including new

areas that they may be able to incorporate in the agreement, and exchange of information on their respective laws, regulations and practices as well as other matters

Lastly, TPP negotiators also discussed the goal and process of expanding the

agreement to countries throughout the Asia-Pacific region

(b) The second round of TPP negotiations was held in San Francisco from 14th to

18th June 2010

Scope of FTAs was also the first problem in this negotiation A wide range of more

traditional FTA issues were determined, including goods, services, investment, government procurement, intellectual property, technical barriers to trade, competition policy, legal and institutional issues; and capacity building Discussions also focused

on what types of trade and labor and trade and environment provisions would be appropriate for TPP Chief Negotiators also agreed on a set of cross-cutting 21st century issues such as: small business; behind the border issues like reducing customs paperwork; regulatory coherence including through encouraging cooperation between

regulatory bodies; the competitiveness of TPP Parties; transparency in terms of regulation and administrative processes and the needs of developing countries

Secondly, TPP Parties Agree that existing FTAs between TPP Parties would continue

to co-exist alongside the TPP, which allow businesses to choose the best treatment for their particular good, service or investment

Thirdly, TPP members agreed on a forward work program that includes preparation of

elements papers for discussion, possible textual proposals, as well as information exchange on various topics in the next round

Lastly, participants also agreed on an intensive schedule for 2010-2011 in order to

make maximum headway in the lead-up to the APEC Leaders meeting in Honolulu in November 2011 However, no deadline has been set to conclude the negotiations

(c) The third round of TPP negotiations was held in Brunei from 4th to 9thOctober 2010 with the participation of new member, Malaysia

24 negotiating groups discussed issues such as industrial goods, agriculture, standards, services, investment, financial services, intellectual property, government procurement, competition, labor and environment Discussions on objectives and approaches for goods market access continued with a process to begin market access negotiations being offered Cross-cutting issues were connectivity in the region by creating opportunities to maximize supply chain efficiencies; greater regulatory coherence; SMEs and supporting development In addition, TPP officials organized technical assistance seminars alongside the negotiations on sanitary and phytosanitary standards and trade-related labor and environment issues in order to build capacity on these issues

(d) The fourth round of TPP negotiations was held in Auckland from 6th to 10thDecember 2010 where Vietnam participated the first time as a full TPP member

Firstly, 20 groups in the scope of TPP continued to be discussed Cross-cutting issues

that were explored in the negotiations were regional integration in the Asia-Pacific; compatibility and coherence of TPP regulatory systems; a living agreement which adapts to changing business needs and can accommodate new TPP members over time Supporting development including through appropriate and ongoing technical assistance and capacity building

Secondly, officials also finalized preparations for the exchanges of initial market

access offers on goods which are scheduled to take place in January 2011 Negotiators also made headway towards exchanging initial services and investment offers in March

2011

Lastly, there was a high level of interest from stakeholders in the negotiations, with

attention of more than 100 representatives from business groups, NGOs and academics

(e) Chile hosted the fifth round of TPP negotiations in Santiago from 14th to 18thFebruary 2011, with 9 TPP countries

Firstly, negotiators worked through the draft texts, seeking narrow differences and to

consider interests and concerns of each country They focused on competitiveness and facilitating business in the region; SMEs’ participation; production and supply chain linkages between TPP countries; coherence of the regulatory systems and development

Secondly, goods negotiators agreed to exchange lists of requests for improvements in

these initial offers next month ahead of the next round in Singapore at the end of

March TPP Parties also agreed to exchange initial market access offers on services, investment and government procurement before the next round Services and

investment offers will be made on a negative list basis, to all TPP parties

Lastly, TPP officials received input from a wide range of representatives of business,

civil society and other stakeholder groups on a variety of issues ranging from labor law and practice, to intellectual property and financial services

(f) The sixth round of TPP negotiations held in Singapore from 24th March to 1stApril 2011

Negotiators at this round focused on narrowing the gaps in positions on the draft text and discussing initial market access offers

Besides issues as the last rounds, Parties discussed how such concepts could be implemented in the context of TPP and considered some textual proposals

On 27 March 2011 a Stakeholders’ Forum with attendance of more than 50 representatives from business groups, academics and NGOs In addition, a labor seminar was held on 30 March 2011 which focused on key issues facing workers and businesses and how relevant issues may be addressed in TPP

(g) The seventh round of TPP negotiations was held in Ho Chi Minh City,

Vietnam, from 15th to 24th June 2011

Parties worked to consolidate existing text and considered new text proposals in various working groups, including intellectual property, services, transparency, telecommunications, customs and environment

In cross-cutting issues, besides negotiated ones, countries also had productive discussions on development and the importance of ensuring the agreement served to close the development gap among them

In goods market access, members discussed respective offers and approaches that would facilitate the achievement of an ambitious outcome Some countries provided revised tariff offers following requests for improvements on their initial market access offers

In the services, investment and government procurement working groups, parties

further advanced discussions of market access commitments and responded to questions that had been posed on non-conforming measures

A Stakeholders Forum was held on 19 June and was attended by a range of industry groups, academics, businesses and non-government organizations The opinions of stakeholders varied from support for ambitious commitments to concern that such commitments would not serve the interests of developing countries

(h) The eighth round of TPP negotiations was held in Chicago, United States,

A large Stakeholders Forum was held on 10 September and attracted 250 delegates There were more than 60 presentations at the forum, conveying the interests of the private sector, industry groups, academia and civil society

(i) The ninth round of TPP negotiations concluded on 28 October in Lima, Peru

Progress continued to be made on the text of the agreement, with significant progress made in a number of issues There was steady progress in the market access negotiations on goods, services and investment, and government procurement Parties plan to prepare revised offers based on these discussions and requests made for improvements in specific areas, continuing the process of building an ambitious market access outcome

There are a number of sensitive and complex proposals, including on intellectual property and transparency It should be noted that any TPP member is at liberty to make any proposal it chooses but a proposal is simply that - text proposals have no status unless agreed by all the parties

(j) TPP negotiating parties conducted a mini-round – the tenth round in Kuala

Lumpur, Malaysia from 5th to 9th December

Only a small number of negotiating groups met including rules of origin, services, investment and intellectual property, market access on industrial goods, agricultural and textile All made further progress in narrowing gaps on issues in the legal texts and negotiation of market access arrangements

Negotiations in 2012: Australia has offered to host the next full negotiating round in

early March 2012 in Melbourne and planning is currently underway Like previous negotiating rounds, there will be opportunities for stakeholders to engage with negotiators at several events during the round

Membership: Japan, Canada and Mexico have formally expressed interest in joining the TPP negotiations They will now begin by undertaking a bilateral process with member countries to discuss their readiness to join, and their capacity to maintain both the ambition and pace of the negotiations and then final decisions will be taken by a consensus of all current TPP parties

1.2.6 Main features of Trans-Pacific Partnership

As stated by leaders from 9 countries in negotiation round in November 2011, TPP

will have five main features First, the TPP is a comprehensive market access which

aims to eliminate tariffs and other barriers to goods and services trade and investment,

so as to create new opportunities for our workers and businesses and immediate

benefits for our consumers Second, it is a fully regional agreement which facilitates

the development of production and supply chains among TPP members, supporting goal of creating jobs, raising living standards, improving welfare and promoting

sustainable growth Third, the agreement includes cross-cutting trade issues These are

regulatory coherence, competitiveness and business facilitation, SMEs and

development Forth, new trade challenges are also considered in order to promote

trade and investment in innovative products and services, including related to the

digital economy and green technologies, and to ensure a competitive business

environment Fifth, Parties allows TPP as a living agreement which enables the

updating of new issues as well as new members

1.2.7 Advantages and disadvantages of TPP for participating members

As mentioned in the introduction, TPP is under negotiation, so advantages and disadvantages of countries are quite confidential and complicated In addition, TPP mentions many issues and every issue has two sides – both pros and cons However, this thesis will focus on basic and traditional issues in the case of Vietnam and Vietnam and U.S relations In general, there are two main advantages from TPP First, TPP shall create more chances for Vietnam export Second, it will help to strengthen the competition capacity of Vietnam enterprises through chances of cooperation, reasonable pressure and supporting services for enterprises In addition, TPP also contributes to three main questions for Vietnam: how to minimize the factors that can nullify the expected benefits, how to support vulnerable groups and how to compete with TPP competitors on domestic market The study will justify these ideas through following issues

(a) Tariffs for trade in good

In foreign market: This issue is an advantage when Vietnamese goods can enter these

markets with lower tariffs or at zero Thus it is practical only if Vietnamese goods currently have to bear a high level of tariffs and tariff is the unique problem that

hampers their competiveness As an export – oriented economy, the fact that Vietnam

can access large markets such as the United States with duties at zero or lower level will contribute to a comparatively competitive advantage as well as bright prospects for many industries, followed by employment for a large labor force in export sectors Not only does this benefit affect industries which own strength of exports such as footwear, textile and aquaculture but it also cultivates potential industries to improve competitiveness In other words, advantages of tariffs can be seen in both present and

future time However, tax issues should be considered more carefully Firstly, in fact,

the opportunity to sharply increase exportation is not true for all In U.S market, for example, tariffs for unprocessed aquaculture or woodened furniture are approximately zero, which is not affected considerably whether TPP happens or not In addition, although it is not assured, some industries can be listed to enjoy GSP if Vietnam makes

an effort to negotiate For industries of this group, benefits from tariff is no or negligible The same situation happens in some other markets such as Australia, New Zealand and Peru which apply duties of 0 for Vietnamese seafood such as fishes,

shrimp and crab Secondly, for commodities which enjoy significant benefits from

tariff reduction, non tariff measures may be applied strictly U.S will be a typical example where goods from non-market economy will have to meet strict standards of TBT, SPS and rules of origin

In domestic market: On one hand, tariff reduction for imported goods can bring cheap

goods and materials for consumers and manufacturers using imported inputs can enjoy, which reduces expenditures for living and manufacturing, strengthening competitiveness On other hand, commitments to reduce tariffs on substantially all commodities in TPP are expected to cause adverse impact on budget revenue from

import duties and competition tougher in domestic market Firstly, decrease in

revenues from import duties is an evitable and direct result However, it has been suggested that this loss is not really big compared to the current situation The reason is that most of TPP partners have FTA with Vietnam so tariff was and will be cut

according to these FTAs without TPP coming into force Second, tariff reductions may

lead to an increase in imported products from other TPP countries into Vietnam with more competitive price, which adversely affects domestic industries This is especially dangerous for agricultural products which associate with vulnerable groups in the integration - farmers and rural areas However, there are some optimistic ideas that in the case of TPP, the loss is not too serious For example, the goods from U.S are different from similar goods of Vietnam in segmentation and target customers; therefore, the competition happens between U.S with other foreign competitors on the

market, not with Vietnamese enterprises

(b) Market access for trade in services and investment

When service markets in TPP partners are currently widely open and are quite limited

in Vietnam, the issue does not bring about strong affect This explains why there are some ideas that developed countries will benefit from market access in services and investment while smaller economies such as Vietnam hardly enjoy anything from this advantage Furthermore, compared to a positive – list approach in the WTO, a negative – list approach in TPP negotiations is expected to create dramatic changes The strong and free participation of services suppliers with great potentials and long-term experience (especially the United States) can cause serious troubles for Vietnamese enterprises

However, the actual situation is not completely disadvantageous Specific competition may be the incentive for enterprises to carry out innovation and build capacity for better development Competition also helps remove weak companies which are unsuitable to new situation Furthermore, possibility of cooperation between Vietnam and partners companies should be considered Opening markets is also an opportunity

to attract investment in service sector; especially industries requiring strong capital and high technology This could be a basis to develop more services industries in the future

(c) Public procurement

Although the level of opening in public procurement market in TPP has not been specified but contents in the WTO will be likely to be applied in this agreement In the case of Vietnam, this issue can be presumed to cause adverse effects The attack of the foreign suppliers can make local firms not to compete in the big biddings while it is

unlikely that Vietnam can access public procurement of other TPP countries

However, if it is considered carefully, there are certain advantages such as transparency and diversity in suppliers Therefore perhaps Vietnam should be positive to accept at the appropriate level and with the appropriate route

(d) Standards of labor and environment, TRIPs, TBT, SPS and Safeguard

Labor and Environment: In fact, these requirements in foreign market (particularly the

United States) have been or are causing a lot of challenges for Vietnamese goods (e.g the rules of origin for products containing wood) So this is always a tricky problem for Vietnam export industries However, environmental or labor regulations are applied in TPP partner market, especially the United States regardless of origin In other words, they will be applied whether Vietnam has involved in TPP or not In addition, carefully considering, some of criteria would be a good opportunity for Vietnam to better environmental problems and protect domestic employees

TRIPs: It has become a big problem for Vietnam where violence rate is high and

regulations are ineffective Strict protection of TRIPs will lead to immediate difficulties for many Vietnamese enterprises when they have to invest more capital and for consumers when they have to pay higher price In this issue, it also must be fully aware that current situation should gradually cease in the future if Vietnam wants to achieve an industrialized and modern economy As a result, TRIPS and TRIPS + implementation should be considered as a good opportunity to promote this difficult problem

TBT, SPS and Safeguard: They are among problems Vietnamese enterprises have

dealt with for many years in exporting markets, especially in the United States Therefore, the danger that benefits from tariffs may be disabled by these commitments

is not without basis Nevertheless, relevant provisions in FTAs that U.S and its TPP partners have signed recently mostly include these contents Similar to the environment

or labor, Vietnamese goods with or without TPP still have to meet requirements of TPP

partners On the one hand, implementation of these requirements would be a great

burden to the State including accessing to the conventions concerned, amending domestic laws and building mechanism and procedure The implementation also creates costs for businesses such as technological change in farming - production, change of material supplies, supplementing of control mechanism In addition, there

are institutional issues that are uneasy to change such as rights of association or

collective bargaining On the other hand, as mentioned above, implementation of

these commitments would be a good opportunity for Vietnam to improve the legal system, especially from the view of sustainable development (environment) or human rights (labor) or transparency and administrative reform (remaining issues)

To summarize, TPP is indeed an important FTA Firstly, it includes global trade

policy when it plays as a solution to Doha stalemate which can avoid bilateral agreements and a progress with like-minded partners Secondly, the agreement helps

to link Asia- Pacific trade One point easily seen is that TPP strengthens development and create employment among members In addition, it enhances the relationship between Asia and the United States as well as supports and impacts on existing FTAs within the region Last but not least, TPP plays as 21 st century template which is reflected in comprehensive, behind border liberalization; consolidation of existing FTAs like a noodle bowl; supporting for new sectors such as technology, services, investment; and promotion in cooperation in sectors including SMEs, development, labor or environment

CHAPTER 2: PROSPECTS FOR TRADE

RELATIONS BETWEEN VIETNAM AND THE

UNITED STATES 2.1 Overview about U.S market

There is a saying of economists: "When America sneezes, the whole world is cold" The United States is regarded as the most powerful economy in the world, which is reflected in the position of top 10 countries from 2000 to 2010 (VTC, 2011)

Figure 2.1.Top 10 economies in the world in 2010