WASHINGTON — President Obama, on a historic visit to Vietnam, said Monday the two countries will work together to strengthen bilateral trade ties and investment and ratify the 12-nation Trans-Pacific Partnership trade deal, while his administration keeps up the pressure on the Southeast Asian nation to improve its record on human rights.
Obama, who is the third U.S. president to visit Vietnam since the end of the war, will spend three days in the country before traveling to Japan, another TPP partner country, where on Friday he is set to be the first U.S. president to visit the Hiroshima memorial.
On his first stop in Hanoi on Monday, Obama and Vietnamese President Tran Dai Quang touted the broad benefits of TPP.
“We agreed to work to ratify and implement the Trans-Pacific Partnership as soon as possible because it will support vital economic reforms here, further integrate Vietnam into the global economy and reduce tariffs on American exports to Vietnam,” Obama said at the top of a joint press conference at the Presidential Palace. “And we discussed the high standards that Vietnam has committed to meet under TPP on labor, the environment and intellectual property. And I conveyed that the United States is prepared to offer technical assistance to Vietnam as it works to fully implement these standards so that TPP delivers the benefits that our people expect.”
TPP includes the U.S., Australia, Japan, Mexico, Canada, Vietnam, Malaysia, Peru, Singapore, Chile, Brunei and New Zealand and aims to remove barriers to trade to encompass nearly 40 percent of the world’s gross domestic product if enacted. Trade ministers signed TPP in early February and it now must be ratified by the 12 countries.
“On this occasion, important deals were also reached in terms of trade, health care, humanitarian assistance, education and training, law enforcement and judicial cooperation, and people-to-people exchanges, as well,” Quang said in his remarks. “Both sides agreed to give higher priorities to addressing war legacy issues and committed to continue to work together in this regard.”
At a signing ceremony in Hanoi, Boeing said it will sell 100 aircraft to VietJet; Pratt & Whitney said it will sell advanced engines, and GE Wind said it will partner with the Vietnamese government to develop more wind power. More than $16 billion in commercial deals were unveiled.
In a sign of the strides the two countries are making to strengthen diplomatic ties since the Vietnam War, Quang said the U.S. will work with Vietnam in a clean up project at Danang Airport. He called the U.S. decision to lift the ban on lethal weapon sales to Vietnam “clear proof that both countries have completely normalized the relations.”
But it was the sweeping TPP trade deal that the two leaders sought to shine the spotlight on as a solid sign that the two countries can become strong economic and geopolitical allies.
“President Obama and I also discussed the future direction of bilateral ties and measures to further deepen bilateral cooperation,” Quang said. “We underscored the importance of confidence-building and priority for development cooperation in trade and investment, science and technology, human resource development and addressing climate change. Both sides reaffirmed the commitment to promptly ratifying the Trans-Pacific Partnership agreement, or TPP.”
On the labor side, Vietnam has agreed to establish sweeping labor rights provisions for workers and unions. Vietnam is subject to a special labor mechanism with a penalty process that could lead to the U.S. withholding or suspending tariff reductions if it does not live up to its labor commitments under TPP.
Trade between the U.S. and Vietnam has nearly tripled in the last seven years and is now more than $45 billion, according to the White House. U.S. exports to Vietnam rose 23 percent in 2015, representing the largest increase among the top 50 trade partners of the U.S., and the U.S. remains Vietnam’s largest export market, with exports to the U.S. increasing 24 percent in 2015 compared with 2014.
But Congressional passage of TPP in the U.S. is uncertain this year. The deal faces opposition from key Democrats in Congress, concerns from GOP leaders, all of the remaining presidential contenders, labor and environmental groups and growing numbers of the public.
Asked whether he would change his strategy on seeking Congressional approval due to the concerns and opposition, Obama said he expects a tough fight but will stay the course. He also said he believes provisions in TPP addressing currency manipulation are strong enough.
“I’ve spent enough time in the Senate to know that every trade deal is painful because folks are always seeing if they can get an even better deal,” Obama said. “And especially when you have multiple parties involved, folks are going to be scrutinizing it, they’re going to be debating it, and in an election year, you can anticipate that some folks are going to try to score political points off it. Having said that, I remain confident we’re going to get it done.”
Quang said the finalization of TPP is based on the “successful outcomes of all 12 members of TPP, rather than any individual effort. And we are prepared to ratify TPP, and we stand ready to implement all the commitments under TPP.”
“In our view, TPP is a significant trade and economic linkage, contributing to sustaining the dynamism and the role as a driver for economic growth in our country, as well as in the Asia-Pacific region,” Quang said. “And for Vietnam, TPP and Vietnam’s participation in TPP is one step undertaken by the Vietnamese government in our process of extensive international integration.”
The fashion industry has been anxiously awaiting the enactment of TPP and Vietnam is considered the linchpin for many companies.
The TPP trade pact holds great potential for U.S. retailers, apparel brands and textile producers that exported $7.9 billion to the TPP partner countries in 2015, according to the U.S International Trade Commission. Imports of textiles and apparel from TPP countries to the U.S totaled $19.9 billion last year.
Within the TPP countries, Vietnam accounted for the largest share of U.S. textile and apparel imports last year, $11.1 billion, or 56 percent of TPP imports, the ITC said. Vietnam is the second largest supplier of apparel to the U.S. and the top supplier of footwear.
Imports of apparel from Vietnam are expected to grow most significantly from Vietnam, already the second-largest apparel supplier to the U.S behind China, which is expected to see the largest decline if TPP is enacted, according to the ITC.