Multidimensional impacts of joining trans-pacific partnership: favourable and adverse effects on Vietnamese economy
Abstract
Although the U.S. has withdrawn from the Trans-Pacific Partnership (TPP) agreement, Japan and other members are currently encouraging to figure out the solution to continue TPP. The prospect of a TPP without the U.S. is still bright, and Vietnam needs to determine both positive and negative effects to be ready in case TPP gets into force. This paper evaluates the impacts of that agreement on the Vietnamese economy through the changes in tariffs. The results of Computable General Equilibrium (CGE) model imply that TPP will have favourable effects on improving households' income and welfare, encouraging domestic production and firms' revenue. At the same time, TPP has adverse impacts that increase the government deficit and decrease the national account; especially, those situations will be worse when firms have poor competitiveness. Moreover, TPP's impact on the oil and gas sector will lean toward the negative side due to the weak competitiveness of local producers. Thus, firms and the government must work harder, especially in the oil and gas sector, to improve the competitiveness and to sustainably protect domestic production.
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