I need help with this! You are attending a discussion on an issue that involves
ID: 1165945 • Letter: I
Question
I need help with this!
You are attending a discussion on an issue that involves Vietnam and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Your US-based firm has been outsourcing the production of a set of its consumer products from Vietnam. Your management is aware that the US has withdrawn from the Trans-Pacific Partnership agreement. However the remaining countries The issue to be discussed is, how would the CPTPP affect your firm's outsourcing from Vietnam? And how should it respond?
Explanation / Answer
Answer:
As we all know that US has withdrawn from TPP (Trans-Pacific Partnership) after that Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) came into existence in 2017 as a renovated version of TPP. This decision of US ahs affected many trade practices negatively because it has reduced our free trade access in many big global markets.
If US-based firm has been outsourcing the production of a set of its consumer products from Vietnam than this decision will negatively affect the firm’s outsourcing from Vietnam as all the benefits of free trade access has gone with the withdrawn so now firm will need to pay tariff to get the supply from Vietnam. It will increase prices of the products as Vietnam will charge increased prices because Vietnam have other markets also where he can supply his products. It can also reduce the supply of products from Vietnam.
The firm needs to find suppliers in US or we can say firm need to find sources in their own country to avoid the high import prices. As high price will affect demand for their products.