Why Is It Best To Start Preparing For Transactions Now In Vietnam?

Vietnam is currently at the final stage of negotiating the Trans-Pacific Partnership ("TPP") and the EU- Vietnam Free Trade Agreement ("EVFTA"). Meanwhile, the ASEAN Economic Community, which Vietnam became a full member in 1995, is to be established by the end of 2015. With such deep integration into the multilateral and regional economy, Vietnam is expected to be an attractive investment environment for investors and witness a significant growth in the upcoming years. Samsung Electronics Company has decided to choose Vietnam as the Number 1 country to put their world largest mobile and tablet production and invested more than 6 Billion USD after a researching worldwide. Also major Japanese companies are convinced Vietnam is a top investment destination and become the largest investors in Vietnam. However, whether foreign investors should wait until the TPP and the EVFTA are concluded and the AEC has been established to enjoy their benefits then is a big question. The following section provides an overview of these free trade agreements and the AEC to help investors understand what is awaiting them ahead and choose the right time for their investment.

TPP

The TPP is one of the largest trade and investment agreements ever to be negotiated, involving some of the largest nations in the world. Countries participating in the negotiations include those throughout the Asia- Pacific region, namely Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam. The TPP is touted to be the 21st century trade agreement, set a template for regional and global trade and investment and incorporate next-generation issues.

TPP Market Snapshot

GDP: US$28,136.0 billion (2012) GDP per capita: US$35,488 (2012) Population: 792.8 million (2012) TPP % of world GDP: 39.0% (2012) TPP % of world population: 11.3% (2012) TPP % of world trade: 25.8% (2012) The TPP is being negotiated across thirty chapters with deep focus on comprehensive market access, a fully regional agreement, cross-cutting issues (regulatory coherence, competiveness and business facilitation, small and medium sized enterprises, and development), new trade challenges (particularly rules on state owned enterprises and government procurement); as well as, finally, the notion of a living agreement.

The TPP would expand market access in goods and services among its signatories. The market access issues include liberalization of trade barriers...