Rules of origin, labour standards and the TPP

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Source: David Vanzetti & Pham Lan Huong, “Rules of origin, labour standards and the TPP”, paper presented at 17th Annual Conference on Global Economic Analysis, June 18-20, 2014, Dakar.

Abstract: Vietnam is in a process of active negotiations to participate in Trans-Pacific Partnership (TPP) — a free trade agreement among Pacific economies, including the United States but excluding China. The negotiations are considered of high priority for Vietnam, because the likely impacts are thought to be positive. Although the negotiations have not yet been completed, the three sectors to benefit most in Vietnam include textiles, apparel and footwear. However, Vietnam may face major constraints in maximizing TPP’s potential benefits due to restrictive rule of origin requirements. Furthermore, Vietnam may be obliged to improve its labour standards, for example by allowing freedom of association. The likely effects of these restrictions are quantified using a general equilibrium model. 

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