Innovative diplomacy is inspiring trade strategy

The government considered 2016 a year for inspiring innovations. What innovations has the diplomatic sector made to lure foreign direct investment and expand external trade? What will it do in 2017?

In Vietnam, innovative diplomacy means that we continue to pursue a foreign policy of independence, self-reliance, and diversification and multi-lateralisation of external relations. Along those lines, Vietnam is a friend and reliable partner of all nations for peace and development.

Our innovations lie in being flexible with these principles, to most effectively devise external activities in line with our national interests.

These activities will help us attract more external participation, such as in foreign direct investment (FDI). For example, we are currently concentrating on attracting environmentally friendly and high-tech FDI.

When talking with foreign investors, we try to direct their investments to innovative, environmentally friendly projects. This is not only a tough job, but also a necessary one.

To this end, we have to study and understand investors’ needs, and what kinds of FDI Vietnam needs.

Previously the government attracted FDI into labour-intensive sectors and those that use a lot of electricity and natural resources. Now the focus is changing, to lure FDI into high-tech sectors. The goal will be to learn from the technology use of foreign firms, which can co-operate with local firms in order to build higher value chains together. Vietnam has succeeded in attracting a large volume of FDI overall, but FDI interest in supporting industries remains limited.

Another way that innovative diplomacy can help is in connecting global startup trends with those of Vietnam. Our representative diplomatic agencies overseas have to help the government find new sources of FDI in the service of national socio-economic development.

In November 2017, Vietnam will host the Asia-Pacific Economic Co-operation (APEC) Summit in the central city of Danang. From Vietnam’s perspective, what are the major priorities of the event?

The coming APEC will be accompanied by big expectations from the international community. The hosting of APEC 2017 is Vietnam’s biggest external event of the year, and the hope is for Vietnam to expand its external relations.

Vietnam has proposed a theme for the year “Creating a new driving force for a common future” based on APEC’s common need for new momentum to promote integration and connectivity in the region.

Vietnam has advanced four key priorities: generating inclusive, innovative, and sustainable growth; improving economic connectivity; enhancing the competitiveness of small- and medium-sized enterprises; and ensuring national food security and adaptation to climate change.

These priorities have been welcomed by APEC member economies. They reflect both the members’ needs and Vietnam’s own ideals.

Vietnam expects to host tens of thousands of delegates at 200 activities across the country. This will result in great opportunities for locals to attract visitors, and advertise their products to APEC partners and world-leading businesses.

The ASEAN Economic Community (AEC) has been operational for one year since it was officially established on December 31, 2015. What are Vietnam’s biggest contributions to the community so far?

In 2016, Vietnam accomplished almost all its tasks for the community, and actively joined hands with other regional nations in creating a single market and a common production base via the removal of tariffs.

Currently we are planning what needs to be done for the future of the community, in order to implement the master plan to build the AEC Blueprint 2025.

ASEAN is a market of more than 600 million people, with surging demands for production and consumption. Under the regional commitment, many nations have already reduced all of their import tariffs to 0 per cent. This has brought many opportunities for Vietnamese goods.

Meanwhile, Vietnam will have to reduce almost all of their import tariffs to 0 per cent by 2018 for goods imported from AEC member nations.

But, there are challenges for Vietnam in regional integration. Vietnamese people and enterprises’ awareness about AEC remains limited. And other countries’ businesses have been capitalising on the opportunities that Vietnam is leaving on the table.

For example, in the past year made-in-Thailand goods have been flooding Vietnam, and investors have been flocking here and purchasing firms. Meanwhile, Vietnamese goods are finding it difficult to establish footholds in ASEAN trade.

Since the AEC was established, Vietnam has continuously suffered from trade deficits with ASEAN.

According to the General Statistics Office, in 2016, Vietnam’s export turnover from other ASEAN markets hit $17.4 billion, down 4.8 per cent year-on-year. Vietnam also spent $23.7 billion importing goods from these markets – down 0.3 per cent against 2015.

In total, Vietnam was hit by a $6.3 billion trade deficit with the ASEAN markets, higher than the $5.5 billion deficit in 2015.

What did diplomacy accomplish for socio-economic development in 2016?

Diplomatic activities built on those of previous years. 2016 saw Vietnam basically conclude construction of a network of strategic partnerships and comprehensive partnerships with many of the most important nations in the world. Vietnam has signed strategic partnership deals with five permanent member nations on the UN Security Council, and with almost all nations that play an important role in international life.

In 2016, bilaterally, Vietnam exchanged visits of top leaders with its strategic partners, such as Russia, China, the US, France, the UK, Japan, South Korea, and India. The visits reflect Vietnam’s ever-growing relations with these nations.

Multilaterally, Vietnam also deployed various external activities, with top leaders partaking in many significant meetings in the region and in the world.

But despite such achievements, we have faced some challenges. For example, during the visits, co-operation agreements are often inked in many sectors. But to some extent, the implementation of the deals in Vietnam remains limited, even though the agreements are aimed at creating good conditions for the people, ministries, localities, and enterprises of Vietnam. We have to improve our “culture of enforcement”.

The government has participated in many free trade agreements, and will join more in the future. But the way to make local people and enterprises fully understand the advantages and disadvantages brought about by the agreements remains problematic. This is the responsibility of ministries and localities.