Vietnam Sees Trade Deals as Way to Build EconomySkill Level 8, Published on: Jan 19, 2019
Vietnam is on a path this year to approve its biggest trade expansion since the country joined the World Trade Organization (WTO).
The country’s National Assembly in Hanoi approved the Comprehensive and Progressive Agreement for Trans Pacific Partnership in December. The trade deal became effective on January 14.
The Pacific trade deal would open the markets of Japan and Canada to Vietnam’s products. In addition, the deal will permit Vietnamese to enter 10 countries easily for work-related business.
Vietnam also is seeking to reach a trade agreement with the European Union soon. The two trade agreements together would sharply reduce trade barriers with countries that account for 45 percent of the world’s economy.
Lawmakers of other countries in the Pacific partnership are in the process of approving the deal. Six countries have already approved it meaning that it is likely to legally go into effect.
Vietnam hopes that the EU approves this year the free trade deal which the two sides negotiated in 2015.
Experts say that the two major trade deals will speed growth of the country’s growing middle class. They also help Vietnam compete with China as a place where international companies want to build factories.
Vietnam hopes for trade gains
Vietnam may be one of the nations that gain the most from the Comprehensive and Progressive Agreement for Trans Pacific Partnership. That is because exports are such an important part of the country’s growth. Exports are estimated to have reached $200 billion in 2017. Other countries in the Pacific deal are expected to have trade deficits with Vietnam.
Since 1986, Vietnam has sought foreign direct investment in factories that make clothing and electronic devices. It entered the WTO in 2007.
European and Pacific countries hope trade deals with Vietnam will let them sell products to that country’s growing middle class. The Boston Consulting Group predicts that will mean more than 30 million people by next year.
However, as a member of the trade partnership, Vietnam must permit independent labor unions. Vietnam also must have rules so that companies from partnership countries can make bids for business. And Vietnam will have to protect partners’ intellectual property rights.
Trung Nguyen heads international relations at Ho Chi Minh University of Social Sciences and Humanities. He said Vietnam wants to follow the deal’s rules. “They want (to) get some new momentum for Vietnam’s economy, and TPP is one of the solutions,” he said.
Read the following vocabulary with your teacher.
class (n.) - a group of people in a society who are at the same economic and social level
bid (v.) - to make an offer to pay a certain amount or to do work for a certain amount of money
intellectual property (n.) - something such as an idea, invention or process that comes from a person’s mind
momentum (n.) - the force that something has when it is moving
Answer these questions about the article.
- What are these trade deals going to speed up?
- What is the level of exports?
- WIll Vietnam have to make trade unions legal?
- Must Vietnam follow deal´s rules?
Please give your opinion on the following statement and give your reasons behind it.
- Free trade is the basic condition for making a strong economy
Have a discussion on following questions.
- Is Vietnam´s economy getting better?
- What they must do to progress?
- Are thing made in Vietnam of good quality?
- Have you ever been there?