The TPP is important for both
Kim Them Do‘
Vietnam, faced with a variety of domestically-generated problems and a geographical proximity to a China too close for comfort, has a major stake in the shift of the American focus from the Atlantic to the Pacific, welcoming the United States as a resident Pacific power to balance Vietnam’s often-belligerent neighbor to the north.
Certainly Vietnam, which is experiencing economic slowdown because the market economy under socialist orientation didn’t work, is looking for a counterbalance to Chinese influence. People are angry that Chinese workers are everywhere, that dubious Chinese-exported foods are flooding the markets, that its naval operations in the South China Sea are increasing and that the government has no legal or military way of resolving claims over disputed territories.
As anti-Chinese sentiment grows and concerns about the uncertain future continue to mount, the main questions on everyone’s minds are obvious: Why did the leadership fail to take the appropriate corrective action? Where are we today in addressing these underlying problems? What do we have to look for, what to expect and where and how best to adapt? How do we identify these aspects as explanatory variables? How do we navigate these interrelated dynamics?
Culturally and geopolitically Vietnam is too close to China and its position has never been so weak for so long as today. Vietnam is less peaceable internally and more vulnerable externally than ever before because the quality in governmental effectiveness, regulatory improvement and the control of corruption are in decline. And most relevantly, elites are placing Chinese interests and their own above the political will of the people.
Thus encouragingly there are many reasons that the American focus in world politics is shifting from the Atlantic to the Pacific. By looking outward Vietnam can get really excited that the US would be a resident Pacific power in order to support Vietnam to balance China. How can Vietnam translate its aspirations into actions in continuing to live with China peacefully?
The scope of the Trans Pacific Partnership is enormous and would facilitate coordination for Vietnam to be more integrated into Pacific economic development. The proposed pact is under negotiation between 12 countries stretching from Peru and Chile in South America all the way to many of the ASEAN countries including Brunei, Malaysia, Singapore and Vietnam
It would include Japan, the world’s third-biggest economy, as well as the US, the biggest. Ratification would the agreement the biggest such trade accord in the world, dwarfing the European Union. The P-4 Agreement calls for Chile, New Zealand, and Singapore to reduce tariffs to zero on all goods by 2017, and for Brunei to reduce tariffs to zero on all but a handful of products.
Launched in 2006 as a free trade pact between Brunei, Chile, New Zealand and Singapore, the P 4 is aimed at eliminating tariffs through a network of agreements, it forms a key part of the Obama administration’s so-called „pivot“ policy, which shifts security priorities to Asia. In November 2009, President Obama announced to increase U.S. engagement in all aspects of its relations with countries in the Asia-Pacific. He hopes to be „America’s first Pacific president.“
Not unnaturally, China, notably absent from the agreement, views the pact as an effort to contain what is now the world’s second-biggest economy, both economically and militarily.
It doesn’t mean that the US can or will place Vietnam at the center of this shift. The US is no longer the chief regulatory power in the global trade system and no longer has the energy for negotiation in context of the World Trade Organization although it may work around the regional trade architecture.
Although it is difficult to foresee US-Chinese economic confrontations within the TPP context, both countries can improve their ability to manage the risks they would face. It is not a life-and-death struggle because they are not currently adversaries, certainly not in the way that Vietnam could expect.
Vietnam does have the potential to become a very attractive partner for US business, however. It is the third biggest market among the TPP economies after the US and Japan. Obviously, the US is not driven by purely strategic considerations in favor of Vietnam. The rising concerns about territorial sovereignty, food safety, environmental degradation and control of labor market are not the major objectives of the US engagement. The US’s wariness of China, both as a strategic competitor and as a massive deficit trade partner, obviously is a precipitate factor for Vietnam when dealing with the US.
The euphoria that surrounded the recent talks between Presidents Truong Tan Sang and Barack Obama has faded. The disparity of parties in terms of human right issues is wide but not too wide to lead to a deadlock of ongoing negotiations as some activists expect. The bilateral nature of the talks could provide them the ability to hash out difficult issues, such as the preoccupation with Chinese regional dominance in Vietnamese domestic politics.
Vietnam nonetheless has managed to create the entirely spurious impression that it must rely on the US comeback. Therefore, the outcome of the present negotiation did not fit very happily with Vietnam’s existing plans. That is wrong.
On this view, Vietnam needs to have an adequate understanding and a comprehensive effort to convince the US to do what is good for them. Arguably most importantly, what matters is the practical reasoning of American interest and the dynamic comparative advantage of Vietnam in the long run, which can be shaped.
Certainly, in the long term, Vietnam is unlikely to carry out an acrobatic diplomacy that neither American nor Chinese partner would expect. In order to achieve its objective, the leadership should look both inward and backward in figuring out how to respond to the shifting conditions. It is an inherently difficult task at a time when rapid change in global diplomacy has left us still trying to understand what it means for regional peace through trade development. The most part of the problem can be only solved by public understanding, political consensus, redirection and determination.
As a result, Vietnam is not well placed either to move the TPP forward in harmony or to lever the progress in negotiating with its diplomatic partners. Both approaches are damaging progress in establishing a multilateral initiative.
* Kim Them Do is a researcher on International Competition Law and Policy at the Research Partnership Platform, United Nations Conference on Trade and Development, Geneva. His forthcoming book is „Global Competition Governance: Key Issues“.