Why Vietnam needs a success from APEC

Vietnam will host the Asia Pacific Economic Cooperation (APEC) meeting on November 10-11. For most of us who follow the transformation of the Trans-Pacific Partnership (TPP), after the US withdrawal from the deal early this year, we may simply assume that APEC meeting can be the international trade forum for Vietnam to regain its momentum with the renewal of TPP deal. If truth be known, Vietnam suffered tremendously after Trump’s decision to withdraw from the trade deal. As APEC host, Vietnam has no choice but to support TPP 11 at this international trade event.

With regard to Vietnam’s future economic plans, Hanoi will have to seek further commitment on the sidelines of APEC from the members of the TPP11 that the trade deal should and must continue even without the US participation. More importantly, Vietnam will use APEC as a forum to confirm the message that this important free trade agreement should be pursued for the long-term benefit of Southeast Asia.

 In fact, Vietnam may be able to offer some deeper contributions to the new global trade order. In the new global order where China has been attempting to connect the world to China, Vietnam is perceived as an active member of China’s One Belt One Road (OBOR) Initiative, the world’s largest platform for economic cooperation, including policy coordination, trade and financing collaboration, and social and cultural cooperation. Vietnam now can positively promote this initiative, in addition to existing frameworks of connectivity espoused by ASEAN and its dialogue partners.   The APEC meeting will certainly enhance the role of Vietnam as an active player in the development of OBOR in Indo-China.

The success of APEC can also further enhance the bilateral relationship between the US and Vietnam. In the past few months, Donald Trump has held bilateral trade discussions with Malaysia, Singapore, Thailand, and Vietnam. These four ASEAN countries have long been seen as the ‘friends of America’ with long-term engagement in security and trade. Vietnam is listed by Trump as a partner with unfair trade practices as it has enjoyed high trade surpluses with the US. Vietnam will use APEC as a platform to discuss future plans for bilateral investment, more in the US. The discussion will lead to the creations of thousands of jobs for Americans. The success of bilateral discussion under the umbrella of APEC will further enhance trade and political bonds between the US and Vietnam. More importantly, as the APEC host, Vietnam can seize the opportunity to lead the action on fair trade to benefit everyone, including the US.  

Vietnam and the other APEC member economies have traditionally focused on promoting trade and investment growth between one another. They are now intensifying the focus on who benefits from it, and how to tackle trade barriers in various forms. The efforts to reduce trade barriers and increase international investment and trade liberalisation must continue, as APEC is entering its fourth decade of development.

It is still a tall order because, for Vietnam, there are various structural challenges in dealing with issues such as intellectual property, copyright, non-tariff barriers, and trade liberalisation policies for electronic commerce and service. Vietnam will need APEC as a forum to discuss strategies to sustain its economic growth by promoting bilateral trade with various other APEC members. This is vital action for Vietnam to expand it export horizon and inward and outward foreign direct investment. Lest we forget, Vietnam is among the largest free trade networks in Southeast Asia, with 17 free trade arrangements. 

The success of the APEC meeting will certainly further enhance Vietnam’s leading role at the coming ASEAN summit, which will be held in the Philippines. Vietnam has already prepared itself for its ASEAN chairmanship in 2020. The success of Vietnam as the host of APEC will ensure that Southeast Asian nations will work in tangible ways to improve the faltering status of the ASEAN economic community, as well as to promote community-building by closing the economic and developmental gaps between its old and new members.

With the potential TPP 11, the political and trade power with China through OBOR, the promotion of fair trade with the US, and its role as the future regional leader, Vietnam, as the rising star of ASEAN and the world, will need to strategically position itself at this forthcoming APEC meeting. Its success can potentially support APEC’s ultimate goals: economic inclusion, financial inclusion and social inclusion.