Negotiations over the TPP are taking place among the U.S., Vietnam and many other countries, and are expected to complete by 2012, said experts at a conference on TPP held here on Friday by the Vietnam Chamber of Commerce and Industry (VCCI).

When Vietnam becomes a signatory to the multilateral treaty, the country will face both challenges and opportunities from the U.S. as one of the biggest trade partners in the TPP, said Tran Huu Huynh, president of the VCCI Committee of International Trade Policies. He is positive of Vietnam becoming part of the TPP agreement after the negotiation round is completed in 2012. In fact, since the Vietnam-U.S. Bilateral Trade Agreement was signed between the two countries, bilateral trade as well as investment from stateside has increased strongly. And the TPP is expected to add dimensions to the economic ties. Jay Eizenstat, senior lawyer of Miller & Chevalier, explained that compared to the BTA, TPP would require deeper commitment from the U.S. in the service sector and investment. According to him, Vietnam will attract investors in such services as insurance, financial – banking, legal services, and other professional services.

The new agreement will also help Vietnam get further involved in global trade, he said. “The TPP agreement is a big opportunity allowing Vietnam to penetrate deeper into global trade. In the long term, it can help an export-based economy to shift from mainly low-valued products to other services and sophisticated, high-tech manufacture. The newly-opened US$1-billion chip assembly of Intel Corporation is a positive sign for that,” he said. On the other hand, concerning the labor commitment, Vietnam will have to reform labor laws to standards acceptable to TPP members, including the addition of the collective bargaining between employers and the trade union. Tran Huu Huynh from the VCCI worried about the capacity of local manufacturers once the market is swung open without a progressive road map like in other trade agreements. “We should be careful when looking at the import and export figures to see whether we gain a real interest once the market is wide open like that.

Joining the agreement not only means opportunities but also big challenges to local production,” Huynh said. The TPP negotiation is developed on the Trans- Pacific Economic Strategic Partnership Agreement concluded in 2005 between Brunei, Chile, New Zealand and Singapore, also known as P-4 agreement. The P-4 agreement includes many important issues in trade, including tariff reduction, technical barriers to trade, competition policy, intellectual property rights, and government procurement among others. In November 2008, the U.S., Australia, Peru and Vietnam announced they would all negotiate with the P-4 countries to conclude a “next generation” trade agreement as platform for an expanded trade network in the related regions. Round 4 of the TPP negotiation will start next December in New Zealand.