WASHINGTON, D.C. — Without setting a time frame for a final agreement, representatives negotiating the Transpacific Partnership (TPP) in Sydney, Australia, last week described the agreement as "being crystallized."

As TPP negotiations continue in 2015 – and perhaps beyond – agricultural trade experts are identifying clear wins for U.S. agriculture in it. One case is Vietnam, already an important destination for some U.S. commodities and a nation whose growing middle class indicates a growing market for other food products from the United States.

Vietnam’s gross domestic product grew more than 5 percent per year after government-directed economic reforms began in 1986.

"The country has since emerged as one of Asia’s dynamic economies and a growing market for agri-food trade," said Shawn Arita and John Dyck, USDA economists, in a report released last week detailing Vietnam’s agri-food sector and the TPP.

As Vietnam restructured its economy, it promoted greater exports of goods like coffee, textiles, natural rubber and aquaculture. And it negotiated favorable trade policies for some raw goods – such as cotton and soy – required by exporters.

Vietnam’s aquaculture/fishery indus-try illustrates how U.S. farms benefited from the nation’s economic transition. Fisheries exports rose from $500 million in 1994 to more than $4 billion in 2012, according to the USDA. Vietnamese fisheries looked for soy and soybean meal from global producers, including the United States.

U.S. soybean exporters also benefited from higher demand for vegetable oils from Vietnamese consumers.

In 2012, Vietnam imported more than $2 billion in soy products; $333 million (about 8 percent market share) came from here. At a U.S. Soybean Export Council event in Vietnam in September, a major importer projected continued growth for U.S. soybean meal imports to Vietnam.

If soybeans and soy meal – as well as wheat, cotton and some other U.S. commodities – have already benefited from existing trade agreements between the two countries, how could the emerging TPP agreement benefit U.S. farm and food exports? Experts point to the potential in Vietnam’s growing consumer market and appetite for imported consumer food goods, especially dairy products.

Vietnam is already the eighth-largest destination for U.S. dairy exports, at $240 million worth in 2013. Its growing middle class and a more educated consumer base supports continued dairy product market growth.

"Rising income and urbanization led to increased expenditure on dairy products," said Van Phuong Nguyen, an agriculture faculty member at Germany’s University of Bonn, who co-authored a report published in September about Vietnam’s dairy demand.

In comments emailed to Farm World, Nguyen explained Vietnamese consumers like purchasing dairy products from developed countries. "In general, U.S. product has many competitive advantages in Vietnam," said Nguyen. "Vietnam’s milk products production is developing and Vietnam has to import big amounts of milk products."

Australia and Singapore are the other two main dairy product suppliers in Vietnam.

Higher education levels and more female heads of households have helped increase dairy product consumption, according to Nguyen’s research. Specifically, increased bottle feeding – a likely result of rising urbanization and female employment – creates demand for dried milk products used in baby formula.

This year’s export data already support a growing demand. U.S. dairy exports to Vietnam are up 41 percent through August 2014, powered mainly by the willingness of Vietnamese importers to purchase greater values. In August, the USDA raised the 2014 ag export value forecast for Vietnam by $100 million, citing the strength of nonfat dry milk.

"As a region, Southeast Asia looks to U.S. dairy product suppliers mainly for nonfat dry milk and whey products," stated the University of Wisconsin-Madison Babcock Institute’s 2014 U.S. Dairy Trade Situation and Outlook, in October.

Since U.S. dairy exports to Vietnam are already increasing without a TPP agreement, how could the new trade agreement benefit the U.S. and other dairy exporters?

One benefit, said Nguyen, is an increase in quantities, as lower tariffs would likely result in lower prices paid by importers: "Every year, we import a large amount of dairy products from countries like New Zealand, U.S., Singapore … so TPP will help to increase imported milk product from TPP members."

According to the USDA, Vietnam’s tariffs on nonfat powdered milk imported from preferential trade partners, including the United States, range from 10-30 percent. Tariffs on soy and dairy formulas and preparations for infant use are 15-40 percent. That contrasts with tariffs of 0-5 percent on soy, wheat, corn and cotton.

The difference is consistent with Vietnam’s export-oriented development strategy. "A natural outcome of this strategy is that it leaves the consumer-oriented sector as the primary area of untapped import growth," concluded last week’s USDA report.

In other words, lowering tariffs on dairy products shipped to Vietnam will make U.S. goods more competitive. "Beyond powdered milk, other dairy products also have growth potential," reported the USDA. "Yogurt, whey products and milk fats face high tariff levels. Demand for infant formula is growing."

And Vietnam’s dairy demand should keep growing. "The country is the 20th most important importer of dairy products in the world and it is foreseeable that the demand continues to rise," said Nguyen.

Lowering tariffs would also decrease the consumer price for dairy products in Vietnam, among the world’s highest, according to the paper by Nguyen. Lower dairy product prices could also build on existing consumer preferences in Vietnam for food items produced in developed countries with good food safety standards, as reported by the Foreign Agricultural Service.