With all the news and high profile visits last week for the Asia Pacific Economic Cooperation (“APEC”) Summit, it would be remiss of me not to remind my readers of the goals of APEC and importance to Vietnam.
APEC is a forum for 21 Pacific Rim member economies that promotes free trade throughout the Asia-Pacific region. It was established in 1989 in response to the growing interdependence of Asia-Pacific economies and the advent of regional trade blocs in other parts of the world; to defuse fears that highly industrialised Japan (a member of G8) would come to dominate economic activity in the Asia-Pacific region; and to establish new markets for agricultural products and raw materials beyond Europe.
In 1994, APEC members committed to achieve free and open trade and investment by 2010 for industrialized economies and by 2020 for developing economies (“the Bogar goals”).. APEC members agreed to pursue this goal by further reducing barriers to trade and investment and by promoting the free flow of goods, services and capital. This commitment has helped Vietnam solidify its commitment to free and open trade further supported by the accession to WTO in early 2007.
APEC has help provide Vietnam with a platform for Vietnam to integrate more deeply into the global economy since the adoption of “Doi Moi” in 1986, and today APEC accounts for 39% of the global population, 57% of global GDP and 49% of global trade. In terms of Vietnam’s relationship with APEC, APEC accounts for 75% of total trade revenue, with 7 member countries featuring in Vietnam’s top 10 export destinations. APEC also accounts for 78% of Vietnam’s foreign direct investment and 38% of ODA funding and also accounts for 79% of Vietnam’s inbound foreign tourists
As a further step in improving the business climate and attracting FDI. Vietnam is discussing a new draft law on Special Administrative Economic Zones which is expected to help build a more favourable business environment in three designated special zones in Quang Ninh, Khanh Hoa, and Phu Quoc. The aim is to simplify investment at a regional level and encourage PPP projects in particular.
To conclude APEC and the relatively new Regional Comprehensive Economic Partnership which consists of 10 ASEAN members and six FTA partners, Vietnam is well placed to continue its growth and development and will be supported in its efforts to improve the business environment, transparency and governance.