Published August 10, 2015 in Episode 16
If you have asked yourself, “What the heck is a TPP?”, you’re not alone. As a Congressional staffer and a political junkie, I spend a lot of time reading and analyzing politics. TPP is the hot topic du jour and I have been following countless debates on it. Yet even I still find the discussions of the TPP overwhelming. So I'll boil it down to the five things you need to know about the TPP.
1. What is the TPP?
TPP stands for Trans-Pacific Partnership and President Barack Obama called it, “[T]he biggest trade deal that we’re working on right now.” It’s a mega international trade deal between the United States and 11 other Pacific Rim nations, including Việt Nam.
Let me try to put it in perspective: If you combine all the partner countries, you have a market size of about 793 million consumers - that very likely includes you and me, your cousins, and my cousin’s cousin and almost everybody’s mom, if any part of you is Vietnamese!
In 2012, the 12 countries together had a combined gross domestic product (GDP) of $28.1 trillion and, according to the Office of the United States Trade Representative (USTR), they contribute to nearly 40 percent of the world’s GDP. That’s almost half of the world’s output! See why people say it’s a big deal? It literally is.
2. Who is in, who is out?
Let's take a look at the 12 countries involved in the TPP negotiations. They are the United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Việt Nam. Notice which big player is not a part of this trade bloc? You guessed it: China! Where is China in this discussion?
Even though China is on course to become the world's largest economy and is already trading with half of the countries involved with the TPP, the Asian giant is shying away from the deal. If China joins the negotiations, it knows that it would have to play by international rules to conform with international business and human rights norms. And, just maybe, China is not ready to give up its authoritarian political system.
3. What's in it for Việt Nam?
According to a recent Pew Research survey, 89 percent of the Vietnamese participants polled said the TPP would be a “good thing" for their country. They are probably right!
The Peterson Institute finds that if an agreement is reached, Việt Nam would benefit the greatest from the TPP. Việt Nam would be able to export clothes and shoes to the U.S. at a zero percent tariff rate. That means: No tax! What this also means is a whole lot more “Made in Việt Nam” tags on shoes and clothes at stores near you. Through the TPP, Việt Nam hopes to increase its GDP by more than 30 percent in the first ten years by attracting more foreign investment. If it does, it will become one of the leading economies in the Asia-Pacific region.
In the wake of an ongoing power shift within the Asia Pacific region, the TPP is also a “soft balancing" strategy against China's growing military presence in the East Sea. For survival's sake, Hà Nội is seeking a balanced position between the two superpowers, the United States and China, for economic and political reasons, just as the U.S. is seeking to pivot to Asia.
4. What does Việt Nam have to give?
It's not a secret that Việt Nam wants the TPP. What does Hà Nội need to do in order reach the final TPP agreement? The sticking point with Việt Nam is its frequent arbitrary detention of dissidents who speak out on basic rights. It's a problem because the TPP is supposed to address workers’ rights and other human rights, such as freedom of expression and assembly.
Secretary of State John Kerry was very frank during a visit to Hà Nội last week and said Việt Nam needs to show continued progress on human rights.
“Only you can decide the pace and the direction of the process of building this partnership,” he said, addressing his host country. “ But I’m sure you’ve noticed that America’s closest partnerships in the world are with countries that share a commitment to certain values.”
The TPP requires negotiators to adopt worker protections, respect freedom of association and improve their human rights records, which theoretically means, the United States has more bargaining power to push Việt Nam for more progress on those fronts. But the reality that concerns U.S. lawmakers and rights advocates is that negotiations are conducted in secret and no one knows what is in the trade agreement.
5. Where are we in these mammoth negotiations?
The latest round of negotiations ended last week in Hawaii without a resolution. The negotiators are hoping to meet next month to try to iron out the remaining disagreements. Hence the acronym DOA - dead on arrival! If Việt Nam doesn't clean up its act, the TPP may well be DOA, as many rights groups have already spoken out against its human rights record.
So, the outcome of all this is TBA: To Be Announced!