1. The Trans-Pacific Partnership: Opportunities and Challenges Nathan Lane, U.S. Consulate General Ho Chi Minh City Vietnam Oregon Initiative Launch, April 22, 2015

2. Agenda 1.What is TPP? 2.What does TPP mean for Vietnam? 3.Opportunities Slide 2

3. What is the TPP? Slide 3

4. Slide 4 12 Countries 40% of the World Economy TPP – A Comprehensive High Standard Trade and Investment Agreement

5. TPP Basics A “21 st Century” Trade and Investment Agreement – Aims to eliminate all tariff and non-tariff barriers to trade and investment 12 Partner Countries - United States, Vietnam, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, Canada, Japan, Mexico Massive in scope – 29 chapters, from Market Access to IPR to environmental standards Model for future trade pacts among APEC members Slide 5

6. Ambitious Source: scores of provisions from FTA database.

7. 2025 2020 FTAAP 21 APEC Economies TPP12 Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, United States, Vietnam, Canada, Japan, Mexico TPP+ New countries join 20122015 TPP Scenario

8. What does TPP mean for Vietnam? Slide 8

9. AmCham/HCMC

10. What explains Vietnam’s gains? More exports of manufactured goods More access to imported goods Increased FDI Stronger linkage to production chains, overall productivity gains Support momentum of reforms, growth

11. Export gains by country (gains from trade effects) GDP ($bill)Value change ($bill)% GDP 2025TPPFTAAPTPPFTAAP Australia3289332.89.9 Brunei9001.84.7 Canada6137171.12.8 Chile157583.05.3 Japan1,239611804.914.6 Korea627481237.719.6 Malaysia32816295.08.8 Mexico51916583.111.1 New Zealand57355.78.5 Peru92101311.014.2 Singapore2322-100.6-4.2 United States2,845562922.010.3 Vietnam26468113 25.8 43.0 TPP economies7,3103018624.111.8 Others20,264-78962-0.44.7 World27,5742231,8240.86.6

12. Market Access Opportunities for Vietnam Increase market access opportunities: Promote Vietnam’s exports, especially to the U.S. market for products Improved market access and tariff reductions in other TPP countries – e.g. U.S. tariff rates are already low for electronics, appliances, and a multitude of other low-end manufactured products, but rates in many of the other TPP countries (or potential TPP countries) are high

13. Seafood – U.S. tariffs range up to 35% for canned seafood Other ag products (fruits, nuts, etc.) – U.S. tariffs can be as high as 30%-130% (e.g. for some peanuts) Flowers – U.S. tariffs up to 10% Footwear – U.S. tariffs average 17% (and can go as high as 48% for some sneakers) Accessories (hats, gloves, hair clips, etc.) – U.S. tariffs average 23.5% Auto parts – U.S. tariffs average 25% Wool cloth – U.S. tariffs average 25% Brooms and other straw materials – U.S. tariffs average 32% Ship parts – U.S. tariffs go as high as 50% Slide 13 Tariff Reductions Create New Opportunities

14. Investment International “vote of confidence” –TPP Differentiates Vietnam from other developing countries looking for investment; –International investors like TPP, and the seal-of-approval it connotes –Improved bond ratings and renewed investment flows; will pump up the overall economy and markets Higher demand for supportive industries Access to the larger TPP market should increase incentives for investors to move electronics and appliance factories to TPP countries; –Vietnam and Malaysia are the logical destinations Slide 14

15. FDI Gains by country (Vietnam FDI grows) GDP ($bill)Stock increase ($bill)% GDP 2025TPPFTAAPTPPFTAAP Australia1,53610190.71.3 Brunei28102.81.2 Canada1,255010.0 Chile444430.80.7 Japan47615625032.852.6 Korea40617584.214.3 Malaysia386431.00.9 Mexico1,046320.30.2 New Zealand182241.12.1 Peru18912106.45.3 Singapore1,678000.0 United States7,72640570.50.7 Vietnam39528427.110.6 TPP economies15,7462764512.9 Others40,33508950.02.2 World56,0822761,3450.52.4

16. Improved Business Climate – –Directly address complaints from U.S. and local businesses in Vietnam (IPR protection, increased international financial service providers, more level playing field for private firms, etc.) –New investment creates new jobs, new skills, and opportunities for new supportive industries Slide 16 Reform Attracts New Foreign Investment

17. Improved International Status Raise Vietnam's international status, and promote relationships with key partners International stability and a secure international environment brings economic security and stability

18. Overall All TPP members benefit Emerging economies like Vietnam benefit most

19. THANK YOU Questions? Slide 19