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Foreign and domestic perceptions of the Trans-Pacific Parnership

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In this paper, we return to analysis of the Trans-Pacific Partnership (TPP) Agreement, in order to investigate whether firms’ views of the agreement have changed as the negotiations have ended and the final form of the agreement seems clear.


The final TPP Agreement was concluded on October 5, 2015 after seven years of negotiations between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam. The 12 TPP countries signed the agreement on February 4th, 2016, officially starting the two year ratification process for all countries.
Taking advantage of the PCI and PCI-FDI surveys, we tracked the views of businesses operating in Vietnam, probed their knowledge of the agreement, assessed their general support for the TPP as well as support for specific issue areas, and examined their predictions about the impact of this landmark on their businesses, and even measured their advisory interactions with government officials and negotiators. The key points to take away from our analysis are: 

Awareness of and support for the TPP remain generally high among all parties, and both have increased on average as firms have learned more about what is included in the TPP agreement. Average awareness increased from 68 percent in 2014 to 78 percent in 2015, while average support increased 62 percent to 72 percent. 

Both awareness and support were enhanced between two and three percentage points by increased certainty that the United States would ratify the agreement and uphold the terms of the negotiations, indicating that access to the U.S. market is an important part of firms’ calculations about the TPP’s benefits.

Domestic firms demonstrated the lowest awareness of the TPP in 2015 (77 percent), compared to 86 percent among foreign members and 82 percent among foreign non-members.
By contrast, domestic firms express the greatest overall support for the TPP (73 percent), compared to its 67 percent favorable ratings among FIEs from TPP members and 65 percent advocacy among foreign firms from non-TPP member countries. 

Distributional Effects: Aggregate support conceals substantial concerns about the distributional effects. Comparing responses from domestic firms in sectors cited as potential winners by economic analysts with those from businesses cited as potential losers, demonstrates that the latter were far less knowledgeable about the provisions of the TPP and even less likely to support its passage. Further sub-dividing by export orientation illustrates that export-oriented firms in projected winning sectors diverged considerably from other domestic firms in terms of their levels of awareness and support. This finding has critical policy implications. The firms most likely to be harmed by the TPP are those that are the least aware of this agreement.

Specific Articles: A majority of domestic and foreign firms remain positive about all provisions of the TPP, including market opening and behind the border reforms, such as the labor rights and SOE chapters.
The level of support for specific provisions of the TPP differed across types of firms:

For domestic firms, support declined for four provisions that were tested: 1) market access; 2) investment; 3) labor; and 4) SOEs. Declines were extremely pronounced for domestic-oriented firms in losing sectors, but small declines were also visible among export-oriented firms as well.

For FIEs from TPP-member states, domestic-oriented enterprises showed marginal increases in support for every provision of the agreement, and significant increases in support for the investment provisions. 

By contrast, exporting foreign firms from TPP-member states show stable support for the trade openness provisions, but demonstrably less support for the investment and behind the border chapters.

For FIEs originating in countries not party to the TPP, opinions of domestic-oriented enterprises toward the trade pact have remained stable, but there is increasing negativity observable among export- oriented operations, which must pay the transaction costs of the agreement without a corresponding increase of opportunities stemming from expansion of domestic market openness.

Source: PCI report 2015

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