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|APEC is vital to Vietnam’s development as it includes half of its strategic and comprehensive partners, Photo: apec2021nz.org|
At the 32nd APEC Ministerial Meeting (AMM) held in the form of a teleconference on November 8-9, Vietnam suggested that APEC step up its trade credentials.
“APEC needs to promote its leading role in promoting free trade: limiting measures to hinder trade, discrimination, especially against essential goods; and expanding the network of free trade agreements. APEC also needs to promote an open, transparent, and inclusive multilateral trading system based on the rules of the World Trade Organisation (WTO),” stated Vietnam’s Minister of Foreign Affairs Bui Thanh Son.
“APEC also needs to improve the resilience of supply chains and speed up the implementation of agreed cooperation programmes on connectivity, digital economy, and small- and medium-sized enterprises in order to facilitate the flow of goods and people,” he continued.
Vietnam also called for APEC to assist member economies in accessing vaccines in a timely manner and promote cooperation in technology transfer as well as research and production of vaccines, while improving the capacity of the community health system and its ability to respond to infectious diseases and medical emergencies.
The country also urged the bloc to promote cooperation on facilitation of trade in goods and services, the environment, the circular economy, energy-water-food security, climate change, and disaster risk management.
According to the Ministry of Foreign Affairs (MoFA), between 1994 and 2019 when all Bogor Goals were implemented, APEC’s economic growth, trade, and investment increased strongly. The organisation’s total trade of goods and services quadrupled, with an average tariff under the most-favoured-nation principle reduced from 13.9 per cent to 5.2 per cent in 2019.
APEC’s inbound and outbound foreign direct investment increased at an average annual rate of over 10 per cent. APEC’s GDP grew 3.9 per cent annually on average.
Facing a persistent and uncertain pandemic and its continued impact on the health, wellbeing, and economic prosperity of the region, resulting in estimated $1.2 trillion losses from unrealised economic activity as a consequence of border and travel restrictions, ministers from the 21 APEC member economies concluded the AMM by issuing a joint statement on responding to the COVID-19 crisis.
The joint statement describes collective policy commitments to be implemented by APEC economies over the next year to accelerate and ensure a resilient and sustainable long-term recovery, with trade, inclusion, sustainability, innovation and digitalisation as drivers of quality growth. These include continued support and response to COVID-19; economic and trade policies that strengthen recovery; increasing inclusion and sustainability for recovery; and pursuing innovation and a digitally-enabled recovery that strengthens APEC as an institution.
In terms of trade and investment, APEC economies underline the vital role trade has played in mitigating the impacts of the pandemic, the statement said. “Trade should be a pillar for the development and future prosperity of all our people. We want to enable our people to share in the benefits of trade, including through advancing economic inclusion. We reaffirm the contribution that trade can make in addressing important global and regional issues.”
To ensure that Asia-Pacific remains the world’s most dynamic and interconnected regional economy, the statement added that APEC will continue to work to ensure the trade and investment environment is free and fair. “We reaffirm our commitment to keep markets open, and to address supply chain disruptions, thereby fostering mutually beneficial trade relations and reducing trade tensions. We will continue to work to ensure a level playing field to foster a favourable trade and investment environment,” it continued.
APEC economies will also advance economic integration in the region in a market-driven manner. They support ongoing efforts to conclude, ratify, implement, and upgrade trade agreements in the region that benefit their people and their businesses.
“In this context, we will advance the APEC Free Trade Area of the Asia-Pacific (FTAAP) agenda in line with implementing the Lima Declaration, to contribute to high quality and comprehensive regional undertakings. We also note that the APEC Business Advisory Council considers the realisation of FTAAP its preeminent economic priority,” read the statement.
Last week, APEC economies also discussed the APEC Putrajaya Vision 2040 adopted one year ago and agreed on a plan for implementation of the vision. Under this vision, all APEC economies underlined the need to further regional trade and investment cooperation in order to ensure that Asia-Pacific remains the world’s most dynamic and interconnected regional economy.
“We will continue to work together to deliver, a free, open, fair, non-discriminatory, transparent, and predictable trade and investment environment. We reaffirm our support for agreed-upon rules of the WTO in delivering a well-functioning multilateral trading system and promoting the stability and predictability of international trade flows,” read the vision statement.
Covering 21 economies making up 38 per cent of the global population and almost half of global trade, APEC is home to many leading economic partners of Vietnam, from Australia, Russia, and China, to the US, Japan, and Singapore.
According to the MoFA, APEC is extremely important to Vietnam’s security and socioeconomic development. Its members account for over 77 per cent of trade, 85 per cent of foreign visitors, and 38 per cent of official development assistance in Vietnam.
Under APEC’s Bogor Goals, by 2020 all APEC member economies experienced trade and investment liberalisation through reduced trade barriers and the promotion of free-flowing goods, services, and capital.
Investment from APEC economies into Vietnam has climbed remarkably, currently holding 83.64 per cent of total foreign-invested projects, and 81.65 per cent of total registered capital.
Senior economic expert Raymond Mallon pointed out to VIR that foreign investment flows to Vietnam, as a ratio of GDP, are already amongst the highest in the world. Thus, the challenge is to further reform the business environment to attract such investment that is more likely to bring maximum benefits to Vietnam, while minimising potential social and environmental costs.
“Key factors that matter to investors considering long-term sustainable investments in Vietnam are long-term profitability and risks. Reform efforts should continue to focus on reducing administrative bottlenecks in Vietnam, improving public infrastructure and services, and strengthening skills and the institutional foundations for productivity growth while also ensuring macroeconomic and social stability,” Mallon said.
Vietnam became an official member of APEC in 1998, raising the forum’s membership to 21. This was a significant milestone for the country during the economy’s open foreign policy of diversifying external relations and integrating into the global economy.
APEC is critical to the country’s security and development as it gathers 15 of the 30 strategic and comprehensive partners which are leading economic and trade partners of Vietnam, and 13 of 17 free trade agreements that it has signed or is negotiating are with 17 APEC members.
According to the MoFA, Vietnam has actively proposed many feasible solutions in order to help APEC avoid broken supply chains and ensure the smooth operations of export-import markets in the region this year.
“Vietnam has also boosted experience sharing and policy cooperation in deploying financial and economic solutions, while also strengthening support measures for enterprises and people to weather recent difficulties,” said an MoFA statement on Vietnam’s APEC membership.
Vietnam is also one of APEC’s leading members to urge APEC to commit to further cooperation in vaccine sharing, ensuring they are distributed equally.