Vietnam: Opportunities, challenges in TPP


HANOI: After organizing communist Vietnam’s first peaceful mass strike at a shoe factory, labour activist Do Thi Minh Hanh was arrested, beaten bloody by police, and jailed for four years.

Authoritarian Vietnam does not allow the millions of workers in its export-orientated factories, which are driving impressive economic growth, to form independent trade unions.

But this should change with the coming into force of the Trans-Pacific Partnership (TPP), a deal that has been touted as a foundation for “21st century trade” by US President Barack Obama.

The TPP seeks to liberalize commerce in some 40 percent of the global economy, and if ratified would oblige signatories—be they the US, Japan, Canada or Vietnam—to allow independent trade unions.

But activists like Hanh say the one-party state is a long way from concretely committing to that kind of change.

“Vietnam still wants to maintain its monopoly on trade unions,” said Hanh, who was released from prison in 2014 but lives under constant police surveillance.

Currently, all unions are part of the Vietnam Confederation of Labor, which is older than the ruling communist party.

Such official unions are “established to control workers, not to represent them,” activist Hoang Dung told Agence France-Presse.

The lack of meaningful representation is counterproductive as it leads to more wildcat strikes, said labor activist Nguyen Ngoc Nhu Quynh.

“Workers demonstrate as they cannot negotiate,” she said.

Quynh is not optimistic about the TPP as “who can ensure that the trade union is really independent and will listen to workers’ concerns?”

Company vs worker rights
The TPP contains a controversial investor-state dispute settlement mechanism which allows companies to take governments to court if they feel their rights are violated.

But the deal has no equivalent enforcement mechanism to make sure member states live up to their commitments on labor or the environment.

Oxfam’s Andrew Wells-Dang notes that Vietnam has signed up for numerous rights and labor agreements in the past but failed to implement them.

The TPP “could contribute to opening up space on labor issues . . . but what happens if it doesn’t?” he said.

The risk is the deal will simply “replace one set of [local]state owned actors with another set of international corporate actors,” and do little to benefit workers or farmers.

Vietnam, whose low-wage economy relies heavily on exports, is projected to see the biggest percentage boost to the economy of any country in the TPP—about 10 percent by 2030, mostly thanks to textiles and apparel, according to World Bank figures.

Last year the economy grew at 6.68 percent, its fastest pace in five years, partially thanks to record foreign investment.

But in order to attract new high-quality TPP-linked investment, the communist country, which has the lowest GDP per capita and competitiveness ranking of the group, will have to introduce wide-ranging reforms.

“It requires a lot of effort for Vietnam to develop a full market system and define better the role of the state,” said economist Pham Chi Lan.

From brewing to baby formula, often inefficient state-run companies still have their fingers in every sector of the economy, and restructuring will be a long and painful process, she said.

But when the country signed on to the TPP it showed “they are serious about changing the system,” she said.

Vietnam’s participation in the TPP reflects a “new consensus” among the country’s ruling elite about their foreign policy direction, said Jonathan London, a Vietnam expert at City University of Hong Kong.

The communist country wants to move close to the US and Japan, but is also eager not to antagonize its current largest trading partner Beijing, he said.

“Hanoi recognizes the TPP for what it is: a once in a generation opportunity to bolster the country’s standings, economically and strategically,” he said.



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