TPP Trade Deal: Gains and challenges for Asia-Pacific countries

[Nike]

In some sense, that is exactly what it is. Keep in mind that US' initial goal and the most ambitious one when joining TPP is to integrate supply-manufacturing-consumption chain around pacific region, hence why countries like Australia are involved for resource, countries like Malaysia and Vietnam are involved. Truth to be told, the economic aspect isn't all that different from the way old colonial empires are organized.

There are differences though. Courtesy to cold war, US could not brought as much military strength to bear on these countries as the old colonial powers, especially around Southeast Asia region where the presence of China prevent direct US military action against these nations. This means the TPP nations would enjoy a much higher degree of independence than the colonies.

It is also worth to note that under US' organization, the role Malaysia and Vietnam plays will be low-end manufacturing where middle and high end products from US and Japan will saturate Malaysian and Vietnamese market. It would be a good deal for US and even good for Vietnam in the short term, but it will make future transition from low to middle manufacturing almost impossible because Vietnamese/Malaysian native middle-to-high end manufacturing will have problem surviving the flood.

actually, Malaysia is high middle income economics right now and they are never depending on exporting of low end manufacture products to generate their GDP like Chinese (in the past) and Vietnam (currently) do. Malaysia instead rely heavily on commodity sector and differentiate their economics source into middle and high manufacturing products like Chips, electronics, automotive and third tier of Palm oil, oil and rubber products.

 

[William Hung]

This means without protective measure in certain sectors, Vietnam is vulnerable to foreign products flooding into the Vietnam market and eliminate native companies from these sectors, this not only makes the country more dependent on foreign entities for its operation, it also homogenize the economic structure and make it more vulnerable to financial crisis.

It would be a good deal for US and even good for Vietnam in the short term, but it will make future transition from low to middle manufacturing almost impossible because Vietnamese/Malaysian native middle-to-high end manufacturing will have problem surviving the flood.

Cool, finally some longer analysis about TPP and its impact on Vietnam. But reading your posts, it seems like you are suggesting that you are familiar with various manufaring sectors in VN and its current environment? How did you come up with those conclusions?

I have asked these followimg questions before and now I will ask you the same:

Lets break down the individual industries specifically for Vietnam and post your analysis and forecasts for each of them:

For example in the Pharmaceutical sector - how much does each type of medicine currently cost in VN? How accessible are they to the average Vietnamese consumer? How many Pharma company does VN currently have and what kind of product do they make? What is the current research & development stage of the Vietnamese pharma industry? What kind of progress are they making? Once the TPP kicks in, what would the answers to all of these questions then be? How would it affect the economy of Vietnam? If there is going to be a difference, what would the effect on the overall economy be once we take into consideration the impact of the other sector like agriculture, diary, automobile, etc?

Then apply these same questions to all the other industries.

Can you answer those questions and give your analysis for specific sectors in Vietnam? you can ignore the questions about the cost of medicines...I’m especially interested to read your analysis on the current status of various Vietnamese domestic industries (oil, electronics, textile, automobile, etc.), the current research & development progress for specific sectors, and how, with proper reference to specific TPP rules and regulations, the TPP would impede this progress. You have specifically said that Vietnam’s domestic middle-to-high end manufacturing won’t survive the flood of foreign competitors. So what Vietnamese middle-to-high end manufacturing sector were you talking about? can you give specific examples and its current status? if there are any , how exactly are they surviving now? And exactly how will they not survive after the TPP? Notice the article I’ve previously linked said that certain sectors are exempted from the TPP, so you will have to be specific here.

 

[tranquilium]

Cool, finally some longer analysis about TPP and its impact on Vietnam. But reading your posts, it seems like you are suggesting that you are familiar with various manufaring sectors in VN and its current environment? How did you come up with those conclusions?

I have asked these followimg questions before and now I will ask you the same:

Can you answer those questions and give your analysis for specific sectors in Vietnam? you can ignore the questions about the cost of medicines...I’m especially interested to read your analysis on the current status of various Vietnamese domestic industries (oil, electronics, textile, automobile, etc.), the current research & development progress for specific sectors, and how, with proper reference to specific TPP rules and regulations, the TPP would impede this progress. You have specifically said that Vietnam’s domestic middle-to-high end manufacturing won’t survive the flood of foreign competitors. So what Vietnamese middle-to-high end manufacturing sector were you talking about? can you give specific examples and its current status? if there are any , how exactly are they surviving now? And exactly how will they not survive after the TPP? Notice the article I’ve previously linked said that certain sectors are exempted from the TPP, so you will have to be specific here.

Vietnam's manufacturing can be roughly estimated here:

Trade Map - List of products imported by United States of America (Go to the page and change country to Vietnam) I have also attached screenshots for easier viewing.
Export for Vietnam:

Specifically under electronics:

Vietnam's largest export sector is electronics. Specifically, item 8517 Electric app for line telephony,incl curr line system, its largest import is also electronics following by electric machinery. Specifically, in addtion to item 8517 as mentioned before, another large sector is Electronic integrated circuits and microassemblies. We then take a look at the destination for both the import and exports. For export purpose, Vietnam's export by far goes to United Arab Emirates, followed Austria, Germany, United Kingdom in much smaller shares.

Now, we open up the phone sales brand in these corresponding nations, we discover that none of the brands are Vietnam.
Mobile Phones in the United Arab Emirates
Hence, it is reasonable to conclude the position of Vietnam manufacturing export are in the lower level---ie, base component, assembly, etc.

Similarly, we look at the import of Vietnam. We see

The specific categories under electronics:

Vietnam imports the largest share of electronics from the following sources: South Korea, Singapore, China, Japan, Ireland, Taiwan, USA. Now removing China from the import source list because China exports both low and high end products, which confuses the issue. The other six sources, with exception of Ireland which I do not have a good understanding of, all primarily focus on mid to high end products. (to find out Chinese-Vietnam trade in the sector, I have to go into specific trade reports published by Chinese government sources, which takes quite a bit time to look through and organized, so I won't do it today) However, it can be concluded from these trade data that Vietnam mainly imports mid-to-high end products from other nations and exports low end manufacturing products. This supports my previous post with hard statistics.

I haven't comment on Vietnam's pharmaceuticals because I am an engineer, pharmaceuticals is a bit far away from my profession. The trade statistics do reflect the engineering industrial pretty well though. (It helps that Vietnam has a 1:1 export value to GDP ratio, this means the internal market is sufficiently small comparing to export/import that export/import dominates the economic structure. As oppose to China, which has a 1:4 export to GDP ratio or US with a 1:10 export to GDP ratio. In the latter two countries' case, domestic consumption would be the dominant factor.)

Ah, I looked up a bit farther for Vietnam's pharmaceutical industry:
Export:

Import:

The export is a bit too small, so I missed it the first time.

Roughly speaking, Vietnam pharmaceutical industry run a 1:20 export to import ratio (In comparison, out of the three top performing economies in the world, China has a 1:5 ratio, USA has a 1:2.5 ratio, Japan has a 1:7 ratio). Export mainly consist of item 3004 Medicine mixture not covered by standard categories (no idea what that is.) Imports is a bit more diversified with 3004 again dominating the composition, but item 3002 Human & animal blood; antisera, vaccines, toxins, micro-organism cultu also occupy a large share.

 

[William Hung]

Vietnam's manufacturing can be roughly estimated here:

Trade Map - List of products imported by United States of America (Go to the page and change country to Vietnam) I have also attached screenshots for easier viewing.
Export for Vietnam:
View attachment 264281
Specifically under electronics:
View attachment 264280

Vietnam's largest export sector is electronics. Specifically, item 8517 Electric app for line telephony,incl curr line system, its largest import is also electronics following by electric machinery. Specifically, in addtion to item 8517 as mentioned before, another large sector is Electronic integrated circuits and microassemblies. We then take a look at the destination for both the import and exports. For export purpose, Vietnam's export by far goes to United Arab Emirates, followed Austria, Germany, United Kingdom in much smaller shares.

Now, we open up the phone sales brand in these corresponding nations, we discover that none of the brands are Vietnam.
Mobile Phones in the United Arab Emirates
Hence, it is reasonable to conclude the position of Vietnam manufacturing export are in the lower level---ie, base component, assembly, etc.

Similarly, we look at the import of Vietnam. We see
View attachment 264278
The specific categories under electronics:
View attachment 264279

Vietnam imports the largest share of electronics from the following sources: South Korea, Singapore, China, Japan, Ireland, Taiwan, USA. Now removing China from the import source list because China exports both low and high end products, which confuses the issue. The other six sources, with exception of Ireland which I do not have a good understanding of, all primarily focus on mid to high end products. (to find out Chinese-Vietnam trade in the sector, I have to go into specific trade reports published by Chinese government sources, which takes quite a bit time to look through and organized, so I won't do it today) However, it can be concluded from these trade data that Vietnam mainly imports mid-to-high end products from other nations and exports low end manufacturing products. This supports my previous post with hard statistics.

I haven't comment on Vietnam's pharmaceuticals because I am an engineer, pharmaceuticals is a bit far away from my profession. The trade statistics do reflect the engineering industrial pretty well though. (It helps that Vietnam has a 1:1 export value to GDP ratio, this means the internal market is sufficiently small comparing to export/import that export/import dominates the economic structure. As oppose to China, which has a 1:4 export to GDP ratio or US with a 1:10 export to GDP ratio. In the latter two countries' case, domestic consumption would be the dominant factor.)

Ah, I looked up a bit farther for Vietnam's pharmaceutical industry:
Export:
View attachment 264284
Import:
View attachment 264283

The export is a bit too small, so I missed it the first time.

Roughly speaking, Vietnam pharmaceutical industry run a 1:20 export to import ratio (In comparison, out of the three top performing economies in the world, China has a 1:5 ratio, USA has a 1:2.5 ratio, Japan has a 1:7 ratio). Export mainly consist of item 3004 Medicine mixture not covered by standard categories (no idea what that is.) Imports is a bit more diversified with 3004 again dominating the composition, but item 3002 Human & animal blood; antisera, vaccines, toxins, micro-organism cultu also occupy a large share.

Vietnam mainly imports mid-to-high end products from other nations and exports low end manufacturing products. This supports my previous post with hard statistics.

No, all this data show is that Vietnam’s mid-to-high end manufacturing is currently almost non-existence. In other words, even right now without the TPP, Vietnam is already dependent on imports for mid-to-high end products. Same goes for Vietnam’s Pharma industry that currently doesnt have anything to speak about.

And that is all your data has shown. It doesn’t show Vietnam’s progress in R&D during the previous period nor does it give any forecasts for those sectors.

So it doesnt support what you have said previously, that with the TPP and without protective barriers, Vietnam will be flooded with foreign pharma and mid-to-high end products. The data has shown that it already is, as most Vietnamese already knew (which proves my earlier point that most Chinese TPP critics here does not know the current VN context to begin with).

So for you to say that the TPP and the lack of “protective barriers” will bring this flood in the future (ignoring the fact that it already is), you must provide data and forecasts showing how Vietnam’s mid-to-high end manufacturing and pharma sectors are on their way to challenge their foreign competitors AND how specific rules in the TPP will hinders that. Remember, the official TPP text has not been revealed yet and some Vietnamese officials has already said Vietnam had received some exemptions, so you need to specific here. So please provide data to back up what you have said:

This is really why TPP has been taking this long to negotiate---some of the more ambitious aspect of the TPP are contradictory to smaller nation's interest.

^ this sounds as though you have already read the final official TPP text, including all the exemptions and compromises that was made. So like what I have said, can you provide the specific texts and forecast data showing how it would affect Vietnam? You have only made generalised statements, like how protective barrier is good, but ignore the current VN context and data. Its just like me saying, if East Timor joins the TPP, their luxury car manufacturing sector will lose out to US and Japanese competitors between now and year 2020, which is a silly and meaningless statement if you already know the current context of East Timor. So please back up what you have said with specifc data on Vietnam.

 

[tranquilium]

No, all this data show is that Vietnam’s mid-to-high end manufacturing is currently almost non-existence. In other words, even right now without the TPP, Vietnam is already dependent on imports for mid-to-high end products. Same goes for Vietnam’s Pharma industry that currently doesnt have anything to speak about.

And that is all your data has shown. It doesn’t show Vietnam’s progress in R&D during the previous period nor does it give any forecasts for those sectors.

So it doesnt support what you have said previously, that with the TPP and without protective barriers, Vietnam will be flooded with foreign pharma and mid-to-high end products. The data has shown that it already is, as most Vietnamese already knew (which proves my earlier point that most Chinese TPP critics here does not know the current VN context to begin with).

So for you to say that the TPP and the lack of “protective barriers” will bring this flood in the future (ignoring the fact that it already is), you must provide data and forecasts showing how Vietnam’s mid-to-high end manufacturing and pharma sectors are on their way to challenge their foreign competitors AND how specific rules in the TPP will hinders that. Remember, the official TPP text has not been revealed yet and some Vietnamese officials has already said Vietnam had received some exemptions, so you need to specific here. So please provide data to back up what you have said:

^ this sounds as though you have already read the final official TPP text, including all the exemptions and compromises that was made. So like what I have said, can you provide the specific texts and forecast data showing how it would affect Vietnam? You have only made generalised statements, like how protective barrier is good, but ignore the current VN context and data. Its just like me saying, if East Timor joins the TPP, their luxury car manufacturing sector will lose out to US and Japanese competitors between now and year 2020, which is a silly and meaningless statement if you already know the current context of East Timor. So please back up what you have said with specifc data on Vietnam.

We have glimpse of what TPP represent and some details. And you are arguing semantics in the first part. Non-existent/almost non-existent isn't that different. My argument is referring to the total lift of tariff which will make matter worse because Vietnam does have possess a strong enough domestic industry to stand without government assistance in the form of tariffs.

 

[William Hung]

We have glimpse of what TPP represent and some details. And you are arguing semantics in the first part. Non-existent/almost non-existent isn't that different.

Not-existent or almost non-existent was not my point. So lets say mid-to-high end manufacturing does not exist in Vietnam. My point is below:

My argument is referring to the total lift of tariff which will make matter worse because Vietnam does have possess a strong enough domestic industry to stand without government assistance in the form of tariffs.

Your argument is meaningless because you are talking about protecting something that doesn’t exist, do you now understand?

The previous data shows that mid-to-high end and pharma industry does not exist in VN. So why are you criticizing the TPP for not protecting domestic industries that doesn’t even exist in Vietnam??

Your argument would only make sense if Vietnam has a realistic chance of competing against foreign competitors in those sectors. For you to argue for that, you would need to provide a credible forecast of how those sectors are projected to grow in Vietnam and provide specific details from the TPP how that projected growth will be impeded. So far, you have provided none of these. Saying you saw glimses of the TPP doesnt mean much if you havent seen the final agreement and all its exemptions and compromises.

Here is a side note, ever read all those positive reports on how Vietnam is going to be the biggeat benefactor? They argue that Vietnam will have more gain than lost...the things that Vietnam gain is where it is strong like agriculture, textile, etc. And where it loses out, Vietnam does not have much footprint anyway, such as pharma, automobile, etc. Now whether their analysis is true or not, I will reserve my own personal judgement until I see the TPP text for myself. But since you have made some specific claims here, then you need to provide data to validate your claims.

 

[tranquilium]

Not-existent or almost non-existent was not my point. So lets say mid-to-high end manufacturing does not exist in Vietnam. My point is below:



Your argument is meaningless because you are talking about protecting something that doesn’t exist, do you now understand?

The previous data shows that mid-to-high end and pharma industry does not exist in VN. So why are you criticizing the TPP for not protecting domestic industries that doesn’t even exist in Vietnam??

Your argument would only make sense if Vietnam has a realistic chance of competing against foreign competitors in those sectors. For you to argue for that, you would need to provide a credible forecast of how that sectors is growing in Vietnam and provide specific details from the TPP how that projected growth will be impeded. So far, you have provided none of these. Saying you saw glimses of the TPP doesnt mean much if you havent seen the final agreement and all its exemptions and compromises.

Here is a side note, ever read all those positive reports on how Vietnam is going to be the biggeat benefactor? They argue that Vietnam will have more gain than lost...the things that Vietnam gain is where it is strong like agriculture, textile, etc. And where it loses out, Vietnam does not have much footprint anyway, such as pharma, automobile, etc. Now whether their analysis is true or not, I will reserve my own personal judgement until I see the TPP text for myself. But since you have made some specific claims here, then you need to provide data to validate your claims.

So your point is that Vietnam should just forego any trade barrier and any hope for their country to ever move up the value chain?

 

[William Hung]

So your point is that Vietnam should just forego any trade barrier and any hope for their country to ever move up the value chain?

Answer my question first, because that was part of your original claims.

What is the projected growth rate of those domestic industries (e.g. mid-to-high end products and pharma) and how would the TPP specifically impede those projected growth? Can you provide data to validate your claims?

 

[tranquilium]

Answer my question first, because that was part of your original claims.

What is the projected growth rate of those domestic industries (e.g. mid-to-high end products and pharma) and how would the TPP specifically impede those projected growth? Can you provide data to validate your claims?

Are you asking to list by name Vietnam companies that considered to be mid-to-high end and their project growth rate? In that case, the answer is no. Nope, I can't. All I have is the data for Vietnam trade from across the industry and each specific category. If someone more familiar with Vietnam economy want to provide the data, be my guest.

My claim is this "TPP and the supposed total lift of tariff will damage Vietnam's domestic industry because according to the trade data I provided, Vietnam industry does not appear to be strong enough to prevail against international competition in mid-to-high manufacturing". Do you have any evidence contradicting this?

 

[Viva_Viet]

My claim is this "TPP and the supposed total lift of tariff will damage Vietnam's domestic industry because according to the trade data I provided, Vietnam industry does not appear to be strong enough to prevail against international competition in mid-to-high manufacturing". Do you have any evidence contradicting this?

Correct, we are still not strong enough, thats why we have a very careful plan to make some strong VN companies to become the multinationals corps with the help from JP-US partners ( and hope from Cnese partners,too)

Btw: if we cant compete with foreign multinationals we simply will burn their factories again

 

[tranquilium]

Correct, we are still not strong enough, thats why we have a very careful plan to make some strong VN companies to become the multinationals corps with the help from JP-US partners ( and hope from Cnese partners,too)

Btw: if we cant compete with foreign multinationals we simply will burn their factories again

Yeah, such a recipe for making strong domestic business----just burn their factories again. That is an absolutely invincible train of logic.

 

[William Hung]

Are you asking to list by name Vietnam companies that considered to be mid-to-high end and their project growth rate? In that case, the answer is no. Nope, I can't. All I have is the data for Vietnam trade from across the industry and each specific category. If someone more familiar with Vietnam economy want to provide the data, be my guest.

This just proves my earlier point that you do not understand the current Vietnamese condition yet still make generalisation about it without any data to validate your claims. Even if you don’t know the conditions avout the specific companies or industry, you’d still at least need to provide forecast data for each sector and category of concern. If you are you make validated claims about the future state of affairs of VN, then you would need to provide credible forecast data along with it. This is just a basic precept. Your “data” has not shown this.

My claim is this "TPP and the supposed total lift of tariff will damage Vietnam's domestic industry because according to the trade data I provided, Vietnam industry does not appear to be strong enough to prevail against international competition in mid-to-high manufacturing". Do you have any evidence contradicting this?

If you make a claim, you must first validate your claim before you can challenge me to find evidence against it. Your claim so far is flawed and has not been validated with proper data or analysis yet:

First of all, you have used a wrong premise to base your argument to begin with. What “total lift of tariff”? I have already previously provided you a reference of a Viet official saying there are exemptions and compromises agreed to in the negotiation. There is no “total lift of tariff”. How far and wide ranging these exemptions and compromises were made? We dont know yet because we have not seen the final TPP text. The onus is on you to provide those TPP text if you are to make sweeping generalisation about the impact of the TPP on Vietnam.

Secondly, you are still arguing about the TPP impact on domestic industries that does not exist in Vietnam. Granted, you can argue for the future growth and prospects of those domestic industries and how the TPP would kill it off. But as I have repetitively said, you would need to provide credible forecasts data for that first and argue which TPP stipulations would kill it. You still have not provide both of these and have admitted you do not know the specifics of the prospective companies.

So provide proper data and analysis first to validate your claim before you challenge me to provide evidence against it. I have already told another Chinese member once before, its like writing a research essay on a thesis without any proper data and analysis and instead just make a challenge for the marker to prove him wrong, and expect good results from that. It doesnt work that way.

 

[Viva_Viet]

Yeah, such a recipe for making strong domestic business----just burn their factories again. That is an absolutely invincible train of logic.

If they dont wanna be burn, then they should transfer high tech to us.

Thats how we make deal in TPP.

 

[tranquilium]

This just proves my earlier point that you do not understand the current Vietnamese condition yet still make generalisation about it without any data to validate your claims. Even if you don’t know the conditions avout the specific companies or industry, you’d still at least need to provide forecast data for each sector and category of concern. If you are you make validated claims about the future state of affairs of VN, then you would need to provide credible forecast data along with it. This is just a basic precept. Your “data” has not shown this.

If you make a claim, you must first validate your claim before you can challenge me to find evidence against it. Your claim so far is flawed and has not been validated with proper data or analysis yet:

First of all, you have used a wrong premise to base your argument to begin with. What “total lift of tariff”? I have already previously provided you a reference of a Viet official saying there are exemptions and compromises agreed to in the negotiation. There is no “total lift of tariff”. How far and wide ranging these exemptions and compromises were made? We dont know yet because we have not seen the final TPP text. The onus is on you to provide those TPP text if you are to make sweeping generalisation about the impact of the TPP on Vietnam.

Secondly, you are still arguing about the TPP impact on domestic industries that does not exist in Vietnam. Granted, you can argue for the future growth and prospects of those domestic industries and how the TPP would kill it off. But as I have repetitively said, you would need to provide credible forecasts data for that first and argue which TPP stipulations would kill it. You still have not provide both of these and have admitted you do not know the specifics of the prospective companies.

So provide proper data and analysis first to validate your claim before you challenge me to provide evidence against it. I have already told another Chinese member once before, its like writing a research essay on a thesis without any proper data and analysis and instead just make a challenge for the marker to prove him wrong, and expect good results from that. It doesnt work that way.

Current economic data is valid forecast, because they show the trend and distribution. Since your argument is based on the disbelief that my data, then by all means, feel free to show your data which disputes my claim.

If they dont wanna be burn, then they should transfer high tech to us.

Thats how we make deal in TPP.

Okay, then. Good luck with it.

 

[William Hung]

Current economic data is valid forecast, because they show the trend and distribution. Since your argument is based on the disbelief that my data, then by all means, feel free to show your data which disputes my claim.

You do realise that I’m not arguing whether those domestic industries will grow or not? Whether they indeed will grow or not, with or without the TPP, I will reserve my comments until I have seen proper data and forecasts.

It is you who need to argue for the prospective growth of those domestic industries. Otherwise, if those domestic industries does not have any prospects outside the TPP, then what is the point of saying the TPP will kill them? like I have said, you would be arguing about something that does not exist. And so far, you have only provided data showing that those domestic industries does not exist without the TPP. So according to your projection based on that data, does the mentioned domestic sector have any prospective to grow and challenge foreign competitors outside the TPP? If yes, then provide proper data and analysis to prove this. If there is no prospect, then it defeat your claim and makes it silly and meaningless (i.e. you would be talkimg about something that doesnt exist).

So no, I don’t need to provide any data to dispute your claim because your claim is already flawed and unvalidated to begin with. Validate your claim first before challenging me to dispute it.