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Seeking ways forward

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Dr. Alan Bollard, Executive Director of the APEC Secretariat, spoke about the bloc’s outlook prior to the APEC Summit 2017 in Da Nang this month.

■ What are your thoughts on the development of trade, investment, and economic partnerships between APEC members over the last few years?

APEC has had a very strong record on trade and growth, driving economic growth and helping people in the region escape from poverty. 

Over the last few years, some of that trade growth has slowed, particularly traditional merchandise trade growth, and there have been some questions about whether we might be at a point of peak merchandise trade. 

However, in the meantime we have seen continued growth in trade and services. That also means that small businesses in the region are often for the first time getting the opportunity via electronic channels and supply chains to take advantage of regional economic integration and growth drivers. 

In addition, foreign investment in the region continues to grow. There is massive growth in cross-border data movement and we are also seeing very big regional movements in people, be they businesspeople with an APEC business travel card, students taking advantage of APEC scholarship schemes, or tourists helped by travel facilitation initiatives. 

■ How does trade in the APEC region affect Vietnam and vice-versa?

Trade has been a big growth driver for the whole APEC region in the past. 

Over the last decade, it has been a very important part of Vietnam’s growth and there is no sign of that slowing, so Vietnam is a big trader in the region and this is important for the economy. 

In addition, Vietnam is a member of the ASEAN Economic Community (AEC), is negotiating the Regional Comprehensive Economic Partnership (RCEP), and is a TPP-11 member, and continues to look for ways that these trade arrangements will open up markets and help Vietnam to grow further. 

We are also seeing considerable foreign investments into Vietnam, often aimed at production for international markets.

■ What are the biggest trade and economic obstacles considered as weak points in the APEC region?

In addition to protection in agriculture, we continue to have tariffs in some areas of merchandise trade, although they have reduced in size. 

Perhaps more important now are non-tariff measures that can be encountered at the border through complicated administrative processes, for example in customs and logistics operations or behind the border in continued regulation, particularly of services with requirements for localization. 

The big area for the future is undoubtedly e-commerce, and we have a lot of discussions right through APEC about how best to ensure that we have opened up the possibility for good movement of data and e-commerce while still protecting appropriately data privacy and cyber security, but this area still has quite a way to go.

■ What do you think of the increase in populism and anti-globalization sentiments globally and the threat of protectionism, and how that could impact on trade development in APEC?

Over the last couple of years, we have seen increasing concern in some parts of some populations about the negative effects of trade on their communities. This has been mainly felt in developed economies and was particularly exhibited by the Brexit vote in the UK and the more recent US elections. 

We need to pay attention to these, as sometimes trade has been blamed for job losses that have actually occurred through automation. Sometimes there are complaints about social disruption from migration, which again is not necessarily to do with trade development. 

But there have been concerns about this and I think all of APEC don’t want to see reductions in trade and they don’t want to see growth in trade protectionism. 

There are some discussions going on about the future of multilateral trade liberalization compared to bilateral deals, and some arguments, particularly from the US, that we need to pay more attention to enforcing the existing rules of trade better. 

But when we actually look at protectionist measures, while there has been a large amount of media speculation there has also been an increase in economies seeking trade remedies. Actually, based on the WTO’s and other data, there hasn’t been an increase in trade protectionist measures put in place.

■ How are APEC member economies seeking to address these various trade and economic challenges in 2017?

Vietnam has specified four priorities for its Chairmanship this year and they are to continue our initiatives on regional economic integration. We have many initiatives going on at the border, behind the border, across the border, and so forth.

Secondly, Vietnam focuses on sustainable growth in the region. This has been a catch-cry in APEC for some years but we have not necessarily focused in on just what that means in detail, and Vietnam has led a project to try look at how to improve social, economic, and financial inclusion through policy redesign and best practices through APEC. 

In addition, there is a focus on helping to modernize small businesses in the digital age with the development of e-commerce or some really big opportunities for small businesses to get into trade, provided we are able to regulate cross-border e-commerce in a way that works for small businesses and not just for larger businesses.

Fourthly, Vietnam has focused on food security with a big food market week in Can Tho and a number of proposals to improve food security, especially in this age of very volatile climate change. 

■ What are your expectations for the APEC Economic Leaders’ Week in Da Nang?

I’m expecting and hoping that we get all the APEC economic leaders together, and that’s a very powerful group of people who will be talking about economic ways forward for the region. 

We are all aware that there are a number of background geopolitical issues, but that won’t be on the table. We will be talking purely about economic development and how we can move this forward in a complicated world with some more negative growth drivers around. 

So, all leaders will be interested in how we can point the way forward for APEC, bearing in mind that APEC, as a voluntary consensus-driven organization, is more amenable in this period of arguments about globalization than some of the formal multilateral trade organizations.

■ Where would you like to see Vietnam and APEC go after the Leaders’ Week, in 2018 and beyond?

2020 is something of a deadline for a number of very important projects and it will be a chance for us to examine what we have achieved and what we could achieve for the future. 

There are other opinions that we could help to integrate some of the multilateral trade negotiations underway and we do have an ongoing work program for a long term, including the possible realization of a free trade area for Asia Pacific.

Thirdly, there is a view that we should be focusing more on how to ensure that regional economic integration regionally is inclusive domestically, and that would mean looking in a more and more focused way at domestic policies to mitigate the bad effects of trade and pass on the good effects.

 

 

Source: VN Economic Times 

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