Vietnam's legislature was almost certain to ratify the 12-nation Trans-Pacific Partnership (TPP) agreed last year but had deferred it until after the U.S. presidential election won by Republican Donald Trump, whose protectionist agenda on the campaign trail has unnerved Asian economies.

The TPP, the signature economic policy of President Barack Obama's Asia-Pacific rebalance, looks increasingly uncertain with a Republican Congress and an incoming president who had called the agreement a "disaster".

The TPP would be a big boon for Vietnam's exports and manufacturing economy, which is receiving record foreign investment due to its numerous trade accords, cheap labor and relative stability.

"The United States has announced it suspends the submission of TPP to the parliament so there are not sufficient conditions for Vietnam to submit its proposal for ratification," Prime Minister Nguyen Xuan Phuc told the National Assembly.

Post-U.S. election responses by the Asian countries on the TPP varied, from suggestions by Malaysia that it would focus efforts on wrapping up a multi-nation trade pact led by China, and Japan trying to stick with the TPP and push ratification.

According to TPP's statutes, it can only be adopted if the United States is part of it, given its economy represents about two thirds of the combined GDP of the original 12 members.

The TPP was a major factor in the rapid strengthening of ties between former war enemies Vietnam and the United States. The relationship has gained momentum over the past two years, coinciding with fissures between Hanoi and neighbor Beijing over troubles in the disputed South China Sea

But that has complicated the balancing act that Vietnam's Communist Party has for years carefully managed as it seeks to expand its economy and build alliances while not becoming too dependent on one country for security, trade or investment.

Phuc said that with or without the TPP, Vietnam was committed to further opening up its economy to the world. Earlier on Thursday he raised his forecast of Vietnam's annual export growth this year to 8 percent.

"We already have signed 12 free trade agreements, so joining the TPP is good, but without joining TPP we will still continue to further the economic integration under programmes we have joined," he said.

His comments echoed those last week by the country's trade minister, who said the textiles, seafood and footwear sectors would still stay competitive on global markets without the TPP.

Phuc said relations with the U.S. administration would remain strong, but he emphasized how Vietnam was committed to sticking by its longstanding foreign policy.

"The party, the state are implementing a policy aimed at diversification and multilateral ties, considering all countries as friends," he said.

"We are ready to cooperate with the United States for co-development on the principle of respecting independence, territorial sovereignty, causing no harms to each other. In that spirit, I believe the Vietnam-U.S. ties will be better in the coming time."

By Ho Binh Minh - Reuters - November 17, 2016

Another blow to Obama’s TPP after Vietnam says it won’t ratify trade pact

Vietnam’s government has stopped seeking the National Assembly’s ratification of the US-led Trans-Pacific Partnership (TPP) pact, as conditions are not sufficient following changes in the United States, the country’s prime minister said on Thursday.

“The United States has announced it suspends the submission of TPP to the parliament so there are not sufficient conditions for Vietnam to submit its proposal for ratification,” Prime Minister Nguyen Xuan Phuc told the National Assembly.

Prospects that the 12-country deal could be ratified in Washington have dimmed after Donald Trump, who pledged to tear up a giant Pacific trade pact, won the US election.

Vietnam was projected to see the biggest percentage boost to the economy of any country in the TPP – about 10 per cent by 2030, mostly thanks to textiles and apparel.

But in September, a member of the National Assembly, or parliament, foreshadowed the deal’s demise in Vietnam, saying the country would not ratify the TPP until after the US election.

The TPP, which excludes economic powerhouse China, must be ratified by all participating countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam.

The Vietnamese prime minister added that “whether to join TPP or not, the Vietnamese economy will take part in extensive integration as it has done with the current 12 trade deals.”

With President-elect Trump saying the Barack Obama-championed TPP would be “catastrophic” for the US economy and Congress, and the chance of it passing in a lame duck session looking increasingly remote, its looming demise gives China an opportunity.

China’s President Xi Jinping is expected to use this week’s Asia-Pacific Economic Cooperation summit in Lima to gain momentum for the Regional Comprehensive Economic Partnership (RCEP), which China has championed in recent years. Moving ahead on the pact, long designed as a counterweight to the TPP from which China is left out, would give it greater economic prestige in a region where it is seeking to displace US influence.

Japanese Prime Minister Shinzo Abe on Tuesday confirmed his nation is turning attention toward RCEP - which would in turn omit the US. That’s even as he plans to stop off in New York on Thursday en route to Lima to meet Trump and make a last-ditch sales pitch for the TPP.

Asia members have said it can’t be renegotiated and have urged Congress to pass it. Singapore Prime Minister Lee Hsien Loong, speaking in the US in August after meeting Obama, said America’s credibility was on the line.

“If at the end, waiting at the altar the bride doesn’t arrive, I think there are going to be people who are going to be very hurt not just emotionally but damaged for a long time to come,” Lee said.

Alan Bollard, a former New Zealand central bank governor who is executive director of the Asia-Pacific Economic Cooperation secretariat, suggested Trump may transplant some elements of TPP into another form to keep the US engaged in a region that Standard Chartered Plc estimates will account for 58 per cent of global growth next year.

“There would continue to be a lot of interest from almost all the economies in Asia for easing trading conditions with the U.S.,” Bollard said.

“But there is the question of whether there has to be a formalised legally binding agreement like TPP or not.”

New Zealand Prime Minister John Key said the deal was not going to happen anytime soon. Still, he told Radio New Zealand: “Trump will get the same advice from the State Department, from the Pentagon, from the Treasury that President Obama got, which is that you need to have influence and you need to have a presence in Asia, and to do that free trade locking you in there is the way to do it.”

The South China Morning Post - November 17, 2016