Henry Dinh Huu Thanh, president of Vietnamese forwarder Bee Logistics, is looking forward to the Trans-Pacific Partnership (TPP). Like many other Vietnamese forwarders, he said the TPP will “bring many opportunities for our company.” For example, if the mega-trade deal is ratified, Bee Logistics will be able to increase traffic volumes, diversify its customers, optimize cost structure and achieve faster market expansion, thanks to the removal of entrance barriers that once held his business back.
He’s not alone in his optimism. Li Wenjun, senior vice president and head of airfreight, Asia-Pacific, at DHL Global Forwarding (DHL-GF), shares the bright outlook on Vietnam. “Airfreight inbound and outbound tonnage will increase, especially the textile and apparel industry, which will attract more carriers to route via Vietnam,” he predicted. “Vietnam will most likely have the strongest trade export to the U.S., but they will still rely on China for raw materials.” Steve Sato, vice president, alliance sales, Asia-Pacific, at United Airlines Cargo, said he is “focusing on ex-Vietnam business. We have a lot of expectations for Vietnam after TPP.”
With heavy support from pro-free-trade integrators, forwarders and carriers, it would seem like ratification of the massive TPP – a process that may take two years – would be a slam-dunk. But look elsewhere in the vast market of 800 million people covered by the proposed partnership across a dozen Pacific Rim countries, and the perspective shifts.
Markets like Singapore, for instance, are not likely to see much impact from TPP – at least as far as U.S. trade is concerned – as they already have a free trade agreement in place with the U.S. In fact, just five of the twelve TPP countries do not have such agreements with the United States at this point – New Zealand, Japan, Malaysia, Vietnam and Brunei.
The perspective is similar for Sandra Faraj, vice president of Montreal-based A.G.O. Transportation. In additon to NAFTA, Canada already has trade agreements with several TPP member countries (Chile, New Zealand and Australia), she noted. A.G.O. president Andre Goguen said TPP will be most useful for Canada in the agriculture, pharmaceuticals and automotive exporting sectors – none of which play a large factor in A.G.O.’s business. “TPP is not going to make a huge impact on our customer base,” he added.
Even in Vietnam – which most experts say will reap the richest benefits from the deal – the TPP is on the back burner. In mid-September, the Vietnamese parliament decided to hold off on a TPP ratification vote until after its next session begins on Oct. 20. In the United States, the TPP has gone from a major priority for the Obama administration to a political hot potato that neither presidential candidate wants to touch.
Ratification among the 12 member states is looking like more of an uphill battle than ever before. However, TPP advocates still insist that the benefits of the agreement outweigh the drawbacks, which may be enough to – eventually – tip the scales in favor of the trade deal.
