(HSC strategy and macro report)
One of the biggest challenges in understanding the impact of TPP is the fact that few people have seen it. This is not only the most comprehensive trade agreement in history but also likely the most secretive. No draft has been circulated for public discussion and the information concerning the contents has mostly come from leaked documents. Those members of Congress who have seen draft copies are not allowed to take notes and in many cases confess to limited understanding of what is highly technical language in some cases. Another challenge is related to the sheet scope of the treaty covering as it does such a wide foot print that it’s hard to underestimate its effect. Especially on an emerging economy such as Vietnam where the cumulative effect of the many obligations in relation to (1) opening up the economy to more foreign competition; (2) strengthening intellectual property rights; (3) speeding up reform including equitization of SOEs may be felt over the next decade or see. In other words it a game changer. However while we will be talking about it for years, the main impact may not be felt for some time.
Even so, assuming TPA is signed it’s a lot more likely that the final version of TPP will pass a vote in Congress. Nothing is guaranteed of course even with fast track authority. However, given that the Republicans control both Houses of Congress and are in favor of TPP it’s likely that with support from a small number of Democrats only that the final treaty will be passed. Although we may expect a heated debate given fears over job losses, and assuming that the treaty would be enacted over a still to be decided timeline from 2016 onwards.
These submissions are extracted from reports accomplished by Ho Chi Minh City Securities Corporation (HSC)’s Research Division team led by Fiachra Mac Cana, Managing Director, Head of Research
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