HANOI — The fingers of both hands tightly intertwined, retired Maj. Gen. Le Van Cuong describes how Vietnam is overly dependent economically on its giant neighbor, China. Then, as he talks about the Trans-Pacific Partnership, a U.S.-led trade deal involving a dozen Pacific Rim countries, the general’s grip relaxes, and his fingers pry themselves apart.
“The TPP is not just economic. It is also a political and security deal,” said Cuong, a former head of the Ministry of Public Security’s Strategy Institute, arguing that the accord would help loosen China’s grip on his country. “It has more value for Vietnam than buying 10 submarines.”
Vietnam stands to be one of the biggest economic beneficiaries of the regional trade deal, reached in October after eight years of negotiations. The country wants to reduce its dependence on China and forge closer ties with the United States — an attempt at reorientation that is given added impetus by China’s aggressive assertion of its territorial claims in the South China Sea.
But the political implications at home could be even more significant, with Vietnam agreeing to transform its labor laws and allow workers to form independent trade unions.
Tom Malinowski, assistant secretary of state for democracy, human rights and labor, calls it a once-in-a-lifetime opportunity to guide this communist one-party nation down a path of greater openness and reform.
“Vietnam has made commitments that are potentially far-reaching and transformational,” he said. “Allowing the formation of independent trade unions breaks the one-party monopoly on social organization.”
President Obama says the TPP will create new jobs at home and new markets for U.S. goods as well as counter China’s growing influence in Asia. Defense Secretary Ashton B. Carter — reaching, like Cuong, for a naval comparison — has said the TPP is as important to him “as another aircraft carrier.”
But Obama faces a tough battle getting congressional approval for the deal next year, with critics worried the pact could undercut U.S. labor standards and push jobs overseas.
The Peterson Institute for International Economics says the TPP could bring Vietnam’s exports up by nearly 30 percent by 2025 and raise gross domestic product by more than 10 percent — in an economy already growing by more than 6 percent a year.
Vietnam runs a large and growing trade deficit with China, its biggest trading partner, and the deal would help it diversify. It would also benefit Vietnam’s garment industry, at the expense of China. But farmers in this largely agricultural nation would face greater competition.
“TPP is going to transform Vietnam’s economy, which is why they are sawing off a leg to get into it,” said Evan S. Medeiros, until recently Obama’s top adviser for Asia and now a managing director with the Eurasia Group, an international business consultancy.
Foreign investors are already eyeing Vietnam eagerly, lured by its combination of cheap labor and duty-free access to the U.S. and Japanese markets. In November, Pou Chen, a Taiwanese company that is among the world’s largest shoe manufacturers, announced that it was moving more of its operations from China to Vietnam, in part to take advantage of opportunities under the TPP.
Yet high expectations also bring added pressure on Obama to get congressional approval.
“It is extremely important, having come this far and having secured the kind of commitments that Vietnam has made, which hard-liners in the government were very reluctant to make, that we do our part,” Malinowski said.
Without congressional approval, he added, “we go back to square one. Nothing happens on labor rights, and America’s word would no longer be seen as reliable.”
Under the deal, Vietnam has agreed to reform state-owned enterprises, adopt stricter environmental standards, allow a “free and open Internet,” permit workers’ freedom of association, and end child labor and forced labor.
John Sifton, Asia advocacy director at Human Rights Watch, acknowledges that the deal forces Vietnam to make a “historic change” to its labor laws, but he is skeptical about Vietnamese implementation and U.S. enforcement.
“The agreement looks good on paper, but what happens if Vietnam makes those changes and yet it continues to allow unions to be crushed by employers and the government?” he asked. The U.S. government, he says, has a “terrible record” around enforcing agreements on labor rights in past trade deals.
U.S. officials counter that the TPP has much stronger standards explicitly built into the pact and that tariff cuts kick in only if Vietnam certifiably implements the changes in years to come.
Within Vietnam, activists are divided over the TPP deal, with one calling it “a very good entry point” for a nascent civil-society movement to grow. But others are skeptical that the government would honor its promises, especially as two leading labor activists remain in prison and police still beat others with impunity.
Last month, 30-year-old labor activist Do Thi Minh Hanh said she was detained and badly beaten by police after she talked to fired workers in southern Vietnam. She was in jail from 2010 to 2014 and says she was beaten by guards and prisoners there.
She said she welcomes the promises made under the trade deal. “The TPP opens a new horizon for labor activists and workers that has never happened in the past, but the fact that the police arrested me and beat me up, and threatened the workers who were complaining about the company — that is worrying to me,” she said.
Negotiations over the deal prompted an internal debate within the Communist Party, Vietnamese and U.S. officials said.
“As we were engaged with them in this process, we would constantly go back to them and say, ‘This is what we are going to be seeking in TPP in these various areas; are you sure it’s for you?’ ” said U.S. Trade Representative Michael Froman. “They would go back and have their internal discussions and then come back to us and say, ‘This is the direction we want to take our country.’ ”
In the end, officials said, the party’s top leaders united behind the deal.
“We are confident this is the right thing for Vietnam to do, despite huge challenges,” said Nguyen Ba Hong, the director general of the Americas Department at the Ministry of Foreign Affairs. “Despite the debate, despite different opinions, we are determined to drive this boat to the ocean.”
Skeptics argue that similar expectations of economic reform leading to greater political openness accompanied China’s accession to the World Trade Organization in 2001 but never came to fruition.
But within Vietnam, experts such as Tran Viet Thai, the deputy director of a Ministry of Foreign Affairs think tank, says his country has chosen a “100 percent different course” from its northern neighbor.
China, he says, is pushing reforms in a top-down fashion, using the “visible hand” of Communist Party power to “clean house.”
The Vietnamese, he said, “want to use the invisible hand of the market to clean house.”