The Trans Pacific Partnership for Vietnam: a good thing for Vietnam?

To study the consquences of the Trans Pacific Partnership on the Vietnamese economy Using a five product econometric modelto measure the impact of individual elements, then synthetize the full set of measures. Vietnam, along with 11 other countries having a Pacific coast (including the USA and Canada), is now finalizing negotiations on an agreement, which will change profoundly the conditions of trade in the region. Our goal is to understand the consequences of the agreement, and test if it will have favorable consequences for Vietnam, considering that, as all treaties of this kind, we have to measure the balance of both positive and negative individual decisions. For this we shall use a five product model, developed for the Vietnamese Ministry of Planning and Investment. The products are: Agriculture, Manufacturing, Construction, Non-Financial Services and Financial Services. The model will use annual data for the period 1995-2012, built especially for the project by the General Statistical Office. Its structure can be described as short term Keynesian, with long term classical features. Its uses a Cobb-Douglas production function, and it features a price-wage loop, with a WS-PS wage determination. Its equations follow globally an error correction framework. It identifies Foreign Direct Investment, through its motivations and its impact on structural parameters of the economy. It has been estimated using a system method, and the process mostly met with success, in spite of the volatility of data and the ongoing transition process, which questions the stability of formulations. In our study, we shall start from a reasonable 10 year forecast, and shock in success the elements of the agreement: tariffs rates, quotas, local subsidies. Then we will use the actual decisions, or what we know of them at the time of the study, to summarize the outcome of the actual agreement.