Thursday, 15/11/2018
APEC Vietnam 2017: Strong Dynamics of Growth, Free Trade and Regional Linkage
23/2/2018 16:1' Send Print
President Tran Dai Quang and his spouse take pictures together with APEC leaders and their spouses at the reception on November 10. Source: VNA

With the attendance of more than 10,000 delegates, nearly 3,000 journalists and about 4,000 domestic and foreign businesses, APEC 2017 was an event of largest scale in APEC’s history and it was the first time for Vietnam to organize such a large-scale event in the central region with the participation of 21 leaders of all APEC member economies.

New background, new demands

Coming into being in 1989 amidst the end of the Cold War, APEC is a prestigious mechanism rallying most of the key economies in the region. In the past three decades, from initially focusing only on promoting free trade, investment and trade facilitation, in recent years, APEC has expanded cooperation, becoming the most important regional mechanism not only on economic linkage, but also on promotion of regional cooperation in other areas, such as anti-terrorism, security and maritime safety.

Although APEC cooperation principle is voluntary and informal, the results achieved by APEC are big and substantial. By heading towards the Bogor Goals in 2020, APEC has truly become a driving force for regional economic growth and linkages, removing many barriers to trade and investment, creating huge trade and investment flows in the region; promoting value chains, and bringing regional economies together. APEC is also a “nursery” of many ideas for cooperation, turning Asia-Pacific into a region of peace and increasing prosperity.

In 2017, when Vietnam assumed the position of APEC host country, there were new developments in the world and regional situation, strongly impacting the organization and trend of cooperation within APEC.

First, the rigorous emergence of trade protectionism and anti-globalization tendency in many parts of the world, especially in the United States. In 2017, Vietnam had to directly deal with the strong interaction between the two trends. On the one hand, most of the countries wanted to continue promoting free trade and deepening regional integration. On the one hand, there was a tendency of anti-globalization and increased trade protection represented by the United States - the world's largest economy. The strong interactions between these two trends in fact caused difficulties for the host country in the process of drafting documents, organizing the summit, and regulating the interests of the parties.

Second, the world is entering the digital age with many new features. The fourth industrial revolution is strongly taking place, deeply changing the foundation of the world economy, and creating a very basic transition. Globalization has been accelerated at much faster pace than ever before. This raised new issues that the APEC Vietnam 2017 should tackle, such as promoting inclusive growth in globalization, labor issues, employment in the digital age, cross-border e-commerce.

Third, the trend of reform, innovation, sustainable development, inclusion and better response to global challenges has been strongly boosted. APEC member economies have the need to restructure and modernize the economy, and to renovate their thinking about management and global governance.

Fourth, economic cooperation and linkages are for wider and broader development. Many global agreements on sustainable development associated with better response to environmental problems and ecological imbalances have been concluded, such as the United Nations Sustainable Development Goals (SDGs) and agreements in the United Nations (UN) Climate Change Conferences (COP21-23) within the UN Framework Convention on Climate Change. Many new generation free trade agreements (FTAs) have been signed with broad and large-scale contents, high commitments and strategic and political elements, such as the Trans-Pacific Partnership (TPP), now the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Trans-Atlantic Trade and Investment Partnership (TTIP), the Regional Comprehensive Economic Partnership (RCEP), the Free Trade Areas of the Asia-Pacific (FTAAP). Meanwhile, old global governance mechanisms have been strengthened and reformed to adapt to the new situation, such as the Group of Twenty (G20), the Group of Emerging Economies (BRICS); new cooperation mechanisms at different levels have been established, such as the Asian Infrastructure Investment Bank (AIIB) in 2014, the Asia-Europe Economic Union (EAEU) in 2015, and the ASEAN Community in 2015. The trend of integration and development has been constantly strengthened, leading to sweeping changes and flexibility in gathering forces in international relations as well as international economic relations.

Fifth, the correlation of forces in the world is changing profoundly with the rise of China, India and many economies in East Asia. The global power transition is taking place in three directions: 1. From the Northern hemisphere to the Southern hemisphere; from Western Europe to Eastern Europe; from developed countries (mainly G7 industrial countries) to developing countries (mainly G20, with an increasingly important role of developing countries). A multi-centered, multi-tiered landscape is taking shape in Asia-Pacific, where competition between major countries, particularly the United States and China, is increasingly severe.

Sixth, the profound transformation of the global and regional political and security landscape. Multilateral diplomacy has grown steadily, becoming a prominent tool in international relations in the 21st century as humanity faces more and more global challenges. The trend of inter-mingled interests and multi-layer cooperation with new, flexible forms, such as global institutions on the basis of multilateral diplomacy has been associated with new and old intertwined regional mechanisms, forums, high-level dialogues which are formed in parallel with the gathering of forces between small and medium countries, and increasing sub-regional and inter-regional cooperation.

Seventh, in the context of the world and regional situation mentioned above, Vietnam’s security and development environment. more than ever before, are facing instability and uncertainty. Global challenges, both traditional and non-traditional, are increasingly severe, particularly the spread of terrorism, climate change, the negative impact of problems, such as migration and epidemics require APEC member economies to strengthen cooperation to better respond to the challenges.

Motivation for growth, free trade and regional economic integration

During the APEC Summit Week in Da Nang, despite many difficulties, and at times some ministerial and high-level meetings within the framework of the Summit Week reached deadlock, in the end all events in the Week were successful. The Da Nang Declaration of the leaders of the 21 APEC member economies together with the Joint Ministerial Statement at APEC 2017 affirmed this which was manifested in seven main contents:

First, for the first time APEC 2017 successfully shaped a major strategic direction, through the APEC Action Plan on promoting inclusive development in the three economic, financial and social dimensions to assert determination of member economies towards building a sustainable and inclusive APEC community, especially in the current globalization. This is also an important topic in the dialogue between APEC leaders and businesses and at the APEC Ministerial Meeting.

Second, to create a new impetus for regional economic linkages in a multilayered international context, APEC member economies were committed to promoting open, free and multilateral trading system, accelerating efforts to address trade and investment barriers unsuitable to the World Trade Organization (WTO) and take concrete steps to achieve the 2020 Bogor Goals by 2020; pledged to take further action to facilitate an enabling environment for investment in the Asia-Pacific region, enhance cooperation to bring into play the potential of the Internet and Digital Economy through the adoption of relevant policies and regulations, such as the APEC Roadmap on Internet and Digital Economy and the APEC Cross-Border E-commerce Facilitation Framework. APEC member economies also reaffirmed their commitment to comprehensively and systematically strengthen the process towards the realization of the Free Trade Area of the Asia-Pacific (FTAAP) in order to promote regional integration process.

On the multilateral trading system, the leaders of APEC member economies as well as ministers issued strong messages to support a rule-based, free, equitable, open, transparent, inclusive, multilateral trading system, emphasizing the important role of APEC and striving to build a favorable environment for investment and job creation. The APEC economies also pledged to strengthen the overall and inclusive connectivity in the region and sub-region.

Third, to foster a shared future, and follow up APEC Dialogue on APEC towards 2020 and Beyond initiated in Peru in 2016 and continued in Vietnam at a time when the Bogor Goals are approaching deadlines and APEC is about to enter its fourth decade, APEC member economies reaffirmed their long-standing commitment to build a dynamic, inclusive and prosperous Asia-Pacific towards a common future; to attach importance to partnerships in the Asia-Pacific region based on mutual trust, mutual respect, inclusive cooperation and mutual benefit. At the initiative of Viet Nam, APEC established the APEC Vision Group to assist Senior Official Meetings (SOM) in building Post 2020 Vision.

Fourth, in order to create new impetus for free trade, sustainable and inclusive growth, the leaders of APEC member economies and ministers discussed extensively on measures to enhance competitiveness and innovation of the business community, particularly micro, small and medium enterprises (MSMEs), to expand MSMEs participation in the global value chain through various measures, such as enhancing MSMEs innovative capacity, improving access to the Internet and digital infrastructures, strengthen MSMEs' resilience and competitiveness, building an enabling environment for MSMEs start-up. They also welcomed APEC's adoption of the APEC Strategy for Green, Sustainable, and innovative MSMEs.

Fifth, in order to improve the quality of APEC's growth, the leaders emphasized APEC's key role in ensuring food security and agriculture, sustainable aquaculture and fisheries in Asia-Pacific and the world, especially in the context of climate change and rural-urban development; reaffirmed commitment to set up an APEC sustainable food system by 2020; pledged to take action to strengthen the food market, food standards and link regional food supply chain to reduce food trade costs, and improve market transparency. APEC also committed to strengthen sustainable management of natural resources and endorsed the Food Security and Climate Change Multi-Year Action Plan 2018-2020.

Sixth, in parallel with the results achieved in APEC, TPP negotiations also achieved substantial results. After the President of the United States D.Trump decided to withdraw from the TPP, TPP members have been divided into groups with very different opinions, positions and interests. Some countries namely Japan, Australia, New Zealand have actively advocated for and wanted to maintain the existence of TPP-11. Some other countries like Canada, Malaysia, Mexico, Peru, Chile wanted to renegotiate or even delay rather than push forward TPP-11. Without exception, Vietnam has also been affected by a serious imbalance between its responsibilities and its interests after the United States withdrew from the TPP. Vietnam has to renegotiate to balance its responsibilities and rights, and as the host country of APEC 2017, Vietnam also has interest in promoting free trade, trade and investment facilitation and showing the responsibility of the host economy.

The negotiations on TPP-11 were very tense, and dramatic to the last minute. However, with affirmative efforts of Japan, and Australia, the active and responsible participation and coordination of the host country, the remaining 11 members of the TPP achieved agreement including the following five key points: 1. Renaming TPP-11 into CPTPP with the core contents remain unchanged as compared to the core TPP contents; 2. Allowing members to postpone the implementation of a number of obligations, including 20 obligations, of which 10 relate to intellectual property rights; 3. There remain four contents of CPTPP that need to be further processed; 4. Supplementing the regulations on effect, procedures for withdrawal, accession and reviews of CPTPP in future; 5. Leaving open the possibility of the US return and other economies’ accession in the future.

The successful negotiation and endorsement of the CPTPP at the APEC 2017 Summit Week was of positive significance, contributing to furthering the current major trends in creating motive force for inclusive growth, free trade and sustainable development and building the future for both Asia-Pacific and the world.

Seven, on the sidelines of the APEC 2017 Summit Week, Viet Nam hosted and welcomed many delegations of heads of state, and high-ranking leaders of its key partners. Most prominently were the bilateral visit of Party General Secretary and President of China Xi Jinping, which took place immediately after the APEC 2017 and the 19th Congress of the Communist Party of China; and the visit of US President D.Trump in his first year of office. Both visits and other bilateral visits coupled with vibrant and effective diplomatic activities on the sidelines of APEC 2017 contributed to strengthening of Vietnam's partnership with many countries in the region and the world. 

In summary, with utmost efforts and will, Vietnam successfully organized the APEC Summit Week and many important events, both bilateral and multilateral, as well as the APEC Year 2017 in Vietnam which were much appreciated by the international community. Looking back at the entire APEC Vietnam Year 2017 and APEC Summit Week, we have enough evidence to confirm that Vietnam achieved all five objectives:

First, Vietnam has successfully implemented the foreign policy adopted at the 12th Party Congress, especially the lines of comprehensive international integration and enhancement of multilateral diplomacy with the highest goal of maintaining the peaceful, stable environment, creating favorable conditions for national construction and development.

Second, Vietnam maximized support and APEC resources to serve the Socio-Economic Development Strategy for 2011-2020 to restructure the economy, transform the growth pattern and gain advocacy for Vietnam’s market economy Vietnam in 2018.

Third, through APEC, Vietnam consolidated and deepened relations with key partners, seized opportunities to sign agreements with key partners, and attracted resources for development from thousands of world leading businesses.

Fourth, Vietnam enhanced its position in the international arena, especially in ASEAN, thereby created favorable conditions for Vietnam to hold important multilateral foreign relation positions, especially when Vietnam will assume the post of ASEAN Chairmanship in 2020, and hold the non-permanent seat of United Nations Security Council for the second term in 2020-2021.

Fifth, Vietnam promoted the image of the country, people, culture, tourism potential, development of to friends in the world.

Sixth, Vietnam introduced Da Nang as a dynamic developing city, a new hub of Asia-Pacific and Southeast Asia and created new momentum for promoting sustainable and inclusive development in the Central of Vietnam.

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(1) Vietnam hosted APEC for the first time in 2006 in Hanoi

This article was published on the Communist Review No. 902 (December-2017)

Tran Viet ThaiDiplomatic Academy of Vietnam