While the three leading contenders in the U.S. presidential race say they oppose the Trans Pacific Partnership (TPP) deal, Asia’s apparel and footwear manufacturers are acting as though it’s a done deal.

“Thousands of companies invested in China are diversifying and moving part of their production into Vietnam,” Oliver Massmann told about two dozen members of the Sports and Fitness Industry Association during a Jan. 14 webinar. “This is happening now.”

Massmann was asked to address the TPP by the Sports and Fitness Industry Association because he has 20 years of experience practicing commercial law in Vietnam, where he is a partner in Duane Morris Vietnam LLC. In his 40-minute presentation, Massmann said the trade agreement establishes a degree of legal certainty for investors unmatched by any other international standard and far above that of the World Trade Organization.

“I have just attended here in Hanoi, in Vietnam today, an information round with European delegation from Brussels,” Massmann said. “They have concluded three trade agreements between Vietnam and the European Union and I asked for a comparison of TPP with their free trade agreements and they refused to compare. One reason being they are concerned about the very high level of the TPP and really shy away from comparison.”

The TPP agreement, which was reached in October after a decade of negotiations, sets more liberal trade rules between 12 countries that account for a third of world trade. As the group’s poorest country, Vietnam is expected to benefit the most from the deal. And as reported by The B.O.S.S. Report in November, 2015 Vietnam’s textile, garment and footwear industries stand to benefit the most if they can meet the yarn-forward provisions of the agreement. 

Asian and European investors have been pouring billions into Vietnam’s power and textile industry in recent years to not only offset rising costs in China, but to build up Vietnam’s capacity to make yarns, fibers and fabrics in anticipation that the United States, Vietnam and Japan will ratify the agreement.

Under TPP, U.S. investors would be able to seek redress against Vietnamese companies in U.S. venues. Theoretically, he said, a U.S. company that prevailed in a U.S. arbitration proceeding against a state-owned Vietnamese company could enforce their judgement by seizing their assets in the United States. That provides a degree of legal certainty unmatched by any other multilateral trade agreement. 

“If you are a company from the U.S. that is producing machines that produce this yarn or other raw resources then you should come here to Vietnam and invest now, because this is the time,” he said.

Under the agreement, Vietnam and Japan will also permit U.S. companies to establish wholly-owned import, distribution and retail companies for the first time.

“It’s the most modern trade agreement ever created by mankind,” Massmann said. “Thailand, Indonesia, the Philippines will have to join TPP at some point and are probably not doing themselves any favor by waiting too long.”  

–Charlie Lunan

SportsOneSource

15/01/2016

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