The implication of tariff reduction in trans-pacific partnership on textiles & garment industry in Vietnam

Abstract

There are heated debates about how Vietnam will be affected by the Trans-Pacific Partnership but there is a lack of study that focuses on the industrial characteristics of Vietnam, especially on the key industry in this deal, the textiles and garment industry. A quantitative access is applied in this study to predict the change direction and the size of changes of Vietnam economy as well as each individual industry. The Global Trade Analysis Project (GTAP) model, which is a Computable General Equilibrium (CGE) model, has been used to evaluate different impacts that the TPP agreement would have on Vietnam. The study found that despite the positive impact on real GDP growth, household income and export, the TPP also has negative impacts to some of the industries in Vietnam. The study is a base for further analysis to recommend appropriate policies to reduce the risk on negative impacts and increase the chance for the positive ones. Keywords: CGE model, GTAP model, TPP, Vietnam T&G industry, tariff removal.