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The Asia-Pacific Economic Cooperation and Viet Nam’s 15 years of effort
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Illustration. Picture: http://www.nciec.gov.vn

APEC - the primary regional economic “playing field”

Established in 1989 as an initiative of Australia, APEC initially constituted 12 economies in the Pacific rims with a modest objective to create more favorable environment for trade and investment cooperation. Since then, APEC has expanded and developed in both quality and quantity. After several admissions, APEC has now 21 members including 9 members of the G20. According to estimated data, APEC member economies together account for: 40 percent of world population, more than 57 percent of world real GDP in purchasing power parity (PPP) terms and about 47 percent of global trade.

As an open economic forum to promote economic cooperation, trade and investment among member economies on voluntary basis while opening to all other countries and regions, APEC carries out work in three main areas: Trade and investment liberalization; business facilitation and economic and technical cooperation. To achieve these objectives, APEC operates on four main principles: equality and mutual respect, assistance and mutual benefit, sincere and constructive partnership and consensus.

APEC’s objectives and cooperation principles demonstrate that it means to be a dialogue forum not an organization. Thus, commitments within APEC are not highly binding as those in the Association of Southeast Asian Nations (ASEAN) or the World Trade Organization (WTO). However, given its distinctive characteristics, APEC has made positive contribution to strengthen multilateral trade which focuses on: First, APEC, as an open dialogue mechanism has made positive impacts on the negotiation for global trade liberalization in the context of multilateral trade crisis and continued failure of the Doha round. Second, through APEC cooperation mechanism, member economies have opportunities to study one another’s trade and economic perspectives, facilitate rapprochement and enhance their participation in other multilateral organizations, particularly WTO. Third, as economic and technical cooperation is one of its three main objectives, APEC has actively supported member economies to build capacity for regional economic integration and better implementation of commitments.

It is possible to say that APEC is a premier forum for trade and investment liberalization in the Asia-Pacific which has made positive contribution to regional trade liberalization. When APEC was established in 1989, average trade barriers in the region stood at 16.9 percent; by now barriers was reduced to 5.8 percent. As a consequence, intra-APEC merchandise trade increased almost 7 folds since 1989, achieving US$ 11,000 in 2011. Average tariff has been reduced by 70 percent during the past 25 years. Thanks to the APEC Trade Facilitation Action Plan (TFAP), the costs of business transactions across the region was reduced by 5 percent between 2002 and 2006, and 5 percent between 2007 and 2010, representing total savings for business of nearly US$ 59 billion. These achievements bespeak the Forum’s role and effectiveness towards the development of regional trade in particular and of regional economy in general.

Viet Nam with 15 years of accession to APEC

With fundamental changes in the way of thinking and awareness of the world situation, Viet Nam has made important adjustments in its external relations and economic development strategies, paying special attention to expanding external relations and international economic integration. Fully aware of APEC’s importance towards the country’s economic development and in implementation of the Party’s foreign policies and international economic integration, on 15 June, 1996, the Vietnamese Government applied for APEC membership. While waiting for official admission, Viet Nam made recommendations and active contribution to the Working Group on Trade Promotion, the Working Group on Science and Industrial Technology and the Expert Group on Agricultural Technical Cooperation of APEC.

In 1998, Viet Nam became the official member of APEC. This was an important turning point on the way to achieving multilateral and diversified international relations and integration into the world economy. Resolutely abiding by the motto: “Proactive integration in international and regional economy in the spirit of maximizing internal strength, enhancing international relation effectiveness, safeguarding independence, sovereignty and socialist orientation, national interest, security, cultural identity and environment protection”, Viet Nam set out basic tasks to effectively participate in the largest economic forum in the region. Viet Nam has joined the programme on trade and investment liberalization and business facilitation in 15 areas to achieve the objective of liberalization by 2020, renovation of tariff system, custom procedures, policies and laws on competition against monopoly, dispute settlement by demands and needs during its participation in APEC.

In that spirit, right after becoming the official member of APEC, Viet Nam has actively joined in APEC’s cooperation programmes and projects, taking advantage of support and assistance in terms of investment, science, technology, human resource training for socio-economic development, poverty reduction, industrialization and modernization. For Viet Nam, APEC plays an extremely important role in politics, economy and social security. Within APEC, Viet Nam boasts several important economic partners such as ASEAN countries, Japan, China, the US, Australia and New Zealand. Some APEC members have gradually become Viet Nam’s strategic partners in economic relations, trade and investment.

On trade, statistics in recent years showed that Viet Nam’s trade export turnover to APEC economies accounted for more than 70 percent of its total export value. Benefits from trade and investment liberalization in APEC have helped a developing country like Viet Nam make important stride forward, bringing its economy out of poverty, accelerating is growth and integration in regional and world economy. After 15 years as an APEC member, due to trade and investment liberalization and business facilitation, Viet Nam’s commodities have met with less barriers when exported to APEC market. Tariff lines of APEC members reduced by more than 70 percent, and average tariff barriers decreased to 6 percent from 17 percent. After ten years since its accession, trade turnover between Viet Nam and APEC members increased to US$ 90 billion from US$ 10.6 billion, making APEC its main export market with turnover increased 8 folds as compared with 1995. Import from APEC members also constitutes more than 80 percent of the total import value of Viet Nam with increasingly diversified commodities.

On investment, more than 60 percent of foreign direct investment in Viet Nam have come from APEC members. These FDI projects have made important contribution to Viet Nam’s growth and economic development through transfer of advanced technology and share of management experience, thus leaving clear imprint on Viet Nam’s economy. Due to assistance in capital, technology and management from APEC, Viet Nam has quickly enhanced its integration capacity and proved to be ready and able to participate in greater international economic issues.

Prompted by proactive spirit, Viet Nam’s participation in APEC is selective on the basis of balancing international obligations and national interests, capability and economic development. Not only benefiting from APEC programmes, Viet Nam has been proving itself as an active and responsible member. Viet Nam has strictly honored its annual cooperation commitments to APEC such as updating the National Action Plan, updating the Progress Report on Collective Action Plan on trade facilitation; updating the Anti-terrorist Action Programme and providing information on policies in other fields upon APEC’s request. In many forums, Viet Nam has actively taken part in an independent and convincing manner, helping to remove disputes among APEC economies in sensitive areas. Besides, Viet Nam has made several new cooperative initiatives, mainly under the form of assistance to capacity building in a series of fields such as trade facilitation, intellectual property, anti-corruption, disease prevention and emergency preparedness. Though the number of project is not high, they have helped improve human resource capacity and understanding of businesses on regional and international economic integration. Through these activities, Viet Nam has gained sympathy, strengthened relations with leading economies in the region and heightened its status in APEC in particular and in the international arena in general.

Viet Nam’s participation in APEC in the past 15 years has brought about encouraging results. We have initially created high prestige and profile of a dynamic, open and integrating Viet Nam with almost 20 initiatives in different fields of APEC. Especially in 2006, Viet Nam successfully hosted the APEC 2006 with the theme: “Towards dynamic community for sustainable development and prosperity”, recording substantive results in terms of content: Ratification of Ha Noi Action Plan to realize the Busan Roadmap towards the Bogor Goals for trade and investment liberalization no later than 2010 for industrialized economies and no later than 2020 for developing countries. This was an important initiative of Viet Nam which will be an orientation to economic and trade cooperation of APEC in future. Moreover, the declaration of APEC leaders on Doha round also confirmed the strong political will of members to early start the negotiation round. The APEC 2006 set out to promote cooperation in human security, counter-terrorism, energy security, and joint response to common challenges such as natural disasters, epidemics and corruption.

In 15 November, 2013, Viet Nam coordinated with the United Nation Development Programme in Viet Nam organized the conference “APEC in the Asia-Pacific region of the 21st century” in Ha Noi. This was the most important conference on the forum organized by Viet Nam in 2013, at a time when Viet Nam was celebrating its 15 years of accession to APEC. The conference strongly confirmed Viet Nam’s policy which set great store by the regional economic mechanism as well as its commitments together with ASEAN Community and APEC members to accelerate regional growth and economic linkage for a peaceful, stable, self-reliant and increasingly cohesive Asia-Pacific region. APEC members highly appreciated Viet Nam’s role, participation, proactive and effective contribution to APEC as well as to regional economic linkage mechanism.

Promoting regional linkage

Currently, APEC continues to be a focus in Viet Nam’s foreign policy to realize the Party and State’s policy on proactive international integration and promotion of Viet Nam’s role in cooperation mechanisms in the Asia-Pacific region. At the APEC Summit in Bali (Indonesia) in October 2013, Viet Nam was nominated and approved to be Chainman of the 25th APEC Summit organized in 2017. This proves that Viet Nam’s efforts in integration have recorded remarkable achievements and won international friends’ recognition. However, along with honor, Viet Nam needs to review comprehensively the world and regional situation to map out relevant integration policies.

First, by now, APEC remains the largest regional economic forum which is highly appreciated by countries. It has promoted dynamism and economic linkage in the region while playing the coordinating role to link economies toward a free trade area in the Asia-Pacific region. Rapid changes as turning points in the region have brought about new opportunities mixed with great challenges to the development of member economies in particular and APEC in general.

Second, to overcome crisis, economies in the world have started to make changes and restructured growth models to conform to the new situation. This process has taken place strongly together with rigorous development of information technology. It has partly removed traditional economic concepts and thinking as well as manners in economic relations and international trade administration. Thus, both APEC and member economies including Viet Nam should take into account these changes in their operation and development strategies.

Third, the world economic strength has seen major changes. The Asia-Pacific region is the key driving force to world economic growth and linkage and the most dynamically developing region with expanding scale and linkage. APEC which connects Pacific rims will play an important role in identifying new economic order in the world. So, APEC members should be fully aware of their roles and responsibilities to heighten the forum’s effectiveness.

Fourth, five years after the global financial and monetary crisis, recovery of economies has not been sustainable and is facing with risks. The multilateral trade system has shown weaknesses which should be overcome. In the past, APEC was said to hold monopoly in trade liberalization in the Asia-Pacific region. However, there is an explosion of free trade agreements (FTA) such as the Trans-Pacific Strategic Economic Partnership (TPP), the Regional Comprehensive Economic Partnership (RCEP) or other bilateral partnership treaties. Competition and conflicts among these mechanisms require APEC to map out clearly its operation orientation and firm position.

The 11th Party Congress set out strategic orientation for the countries to move from international economic integration to international integration. This is a new substantive development, marking the growth and confidence of Viet Nam after 30 years of renovation and integration. The participation in the forum has created opportunities for Viet Nam to expand its market, attract investment and diversify relations. Nevertheless, it has also posed challenges such as commitments overlapping. So, we should early identify objectives of integration and development, position and role of Viet Nam in international linkages as well as significance and importance of these linkages to Viet Nam’s objectives. In such a context, relation with APEC is a need and a priority in its policy. Viet Nam should give priority to realizing Bogor Goals on trade and investment liberalization, new growth strategy and increased regional linkage.

The organization of the 25th APEC Summit in 2017 demonstrates our determination in implementing the Party’s orientation on active international integration as well as Viet Nam’s long-term vision on the Asia-Pacific region. Viet Nam’s efforts to contribute to APEC activities for continued cooperation among APEC members towards a self-reliant, cohesive, equally developed, equitable and sustainable Asia-Pacific region do not only support APEC’s sustainable development but also help Viet Nam confirm its policy on deep international integration and gradually enhance its position in the international arena./.

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This article was published in Communist Review, No 854 (December 2013)

Hoang Anh Tuan*, Han Lam Giang*** Ph.D., Director-General, Institute for Strategic Studies, Ministry of Foreign Affairs ** Researcher, Institute for Strategic Studies, Ministry of Foreign Affairs