Scott H. Murray &Tai H. Pham Discipline of Mathematics & Statistics August, 2014

1. The Trans -Pacific Partnership Agreement: an Opportunity for Viet Nam to reduce its Economic Dependence of China Scott H. Murray &Tai H. Pham Discipline of Mathematics & Statistics August, 2014

2. Problem statement Members of AEC, TPP, RCEP & FTAAP USA’s TPP Vision China’s FTAAP Vision Theories of international trade The Extended Input-Output Table Scenarios Conclusion Contents

3. 1. Problem statement • The ASEAN Economic Community (AEC) by 2015 • The Trans-Pacific Partnership (TPP) by 2014. • Quantitative assessment of economic effects of AEC and TPP on the textile & apparel, footwear and furniture industries in Vietnam

4. The flagship FTAs: AEC, TPP, RCEP & FTAAP?

5. 2. Members of AFTA, TPP, RCEP & FTAAP Russia Taiwan FTAAP Australia Japan New Zealand Canada Chile Mexico Peru United States China Korea RCEP Cambodia Indonesia Laos Myanmar Philippines Thailand Brunei Malaysia SIngapore Viet Nam India TPP AEC

6. TPP

7. RCEP

8. FTAAP

9. 3. USA’s Trans-Pacific Partnership Agreement vision • Strengthen ties across three continents: America, Asia, and Oceania • Become basis and means to establish the Free Trade Area of the Asia Pacific (FTAAP) • The baseline: existing US trade and investment agreements • Create mutual benefits among participants • Ensure third parties do not take advantage of the agreement • Apply “yarn-forward” style rules of origin

10. 4. China’s Free Trade Agreement of the Asia Pacific vision • Build step by step the ambitious “New Silk Road” and “New Maritime Silk Road” through bilateral negotiation, Sanghai Cooperation Organization (SCO), ASEAN & APEC • Compete with the USA

11. China’s New silk road vision

12. FTA: Beneficial to poor countries?

13. 5. Theories of international trade

14. 5.1. China encourages exports and discourages imports

15. 5.2. China keeps its exchange rate weak

16. 5.3. China & New International Division of Labor

17. 5.4. China & Viet Namarecompeting economies Trade indicators

18. Revealed symmetric comparative advantage (RSCA) index • Revealed comparative advantage (RCA)  = (RCA -1) RSCA = (RCA +1)

21. 5.4. TPP& Vietnam arecomplementary Trade indicators

24. Extended Input-Output Table for Vietnam

25. Inaccurate data of value of exports and imports between Viet Nam and countries Countries_export > VN_import: 3.3% Countries_import > VN_export: 5.8%

26. Inaccurate data of value of exports and imports between Viet Nam and China China_export > VN_import: 8.6% China_import > VN_export: 1.2%

27. Inaccurate data on exports and imports between TPP and Viet Nam TPP export > VN_import: 4.6% TPP_import > VN_export: 10.2%

28. Inaccurate data on exports and imports between ASEAN* and Viet Nam VN_imports > ASEAN*_exports: 0.02% VN_exports > Asean*_imports: 27.0%

29. 6. Extended Input-Output Table for Vietnam ASEAN 9% FTAAP 28% RCEP 23%

30. 6. Extended Input-Output Table for Vietnam ASEAN 7% FTAAP 23% RCEP 20%

31. 6. Extended Input-Output Table for Vietnam 41% = 0 30% < 0 29% > 0 ASEAN 8% FTAAP 31% RCEP 27%

32. 6. Extended Input-Output Table of Vietnam FTAAP 81% ASEAN 25% RCEP 68% ASEAN 17% FTAAP 74% RCEP 47%

33. 6.1. Vietnam's imports from the blocs

34. 6.2. Vietnam's exports to the blocs

35. Top ten exporters to Vietnam Unit: Billion USD

36. Top ten exporters to Vietnam Unit: Billion USD

37. Top ten importers from Vietnam Unit: Billion USD

38. Top ten importers from Vietnam Unit: Billion USD

39. 7. Scenarios The scenarios reduceseconomic dependence on China

40. 7.1. The Extended Input-Output Table Unit: Billion VND

41. 7.2. Scenario 1 Unit: Billion VND GDP - 5.1%

42. 7.3. Scenario 2 Unit: Billion VND GDP - 6.2%

43. 7.4. Scenarios (cont.) Scenarios reduce economic dependence on China

44. 7.5. Scenario 3

45. 7.6. Scenario 4

46. 7.7. Scenario 5

47. 8. Conclusion Thanks for listening!