Against tide, APEC seeks deeper trade integration

14:07 | 05/11/2017

Hosting APEC Year 2017 is a focus of Vietnam’s external relations activities this year, as well as the country’s most important contribution to fostering APEC co-operation as part of its deeper and more comprehensive international integration strategy. On the occasion of the 2017 APEC Economic Leaders’ Week, held during November 6-11 in Danang, APEC Secretariat executive director Dr. Alan Bollard talked with VIR’s  Van Ngoc about his insight into APEC 2017 and its implications for regional economic integration.

As the executive director of the APEC Secretariat, could you give us an overview of APEC’s role since its inception as well as how it has contributed to Vietnam and other economies in the region and globally?

APEC has been in operation for more than a quarter of a century. In that time, it has focused on improving regional economic integration by tearing down obstacles for trade and investment in its member economies, which are most of the economies around the Pacific Rim.

This started with a focus on traditional barriers at the border, like tariffs and non-tariff measures that make it difficult to ship goods between economies. Structural reforms and registry harmonisation within borders was then scrutinised. APEC economies also took into account blockages for supply chains operating across borders and increasingly looked at obstacles to uniform trade such as data movement and electronic commerce.

The success of this approach has been huge. It has contributed to a reduction in the number of people living in poverty in the APEC region by around a billion people over the last two decades. That is a massive achievement; of course not all this is due to APEC, but APEC and its ideal of regional economic integration has been a major driving factor in combating poverty.

In Vietnam, APEC has contributed to growth that is aligned with the ideals of the country in terms of trade and investment, and has stimulated important regional growth drivers.

What can be done to change public attitudes about globalisation and advances in technology which can impact APEC’s trade agenda?

We have been cautious when talking about public attitudes towards globalisation and technology because they differ quite considerably between economies. Within APEC, it is probably fair to say that in some developed economies, there have been growing concerns about globalisation and its potentially negative effects on some jobs and sectors.

But in emerging markets, there is generally a much more positive view on the advantages of globalisation. The work that the Policy Support Unit has done in APEC suggests that there is a very clear relationship between trade openness and growth rates in economies.

However, the relationship between globalisation and inequality is very complex and differs between economies. The approach of APEC has been continuing to strengthen the benefits of open trade and investment while paying more attention to the fact that some people and some economies can also be hurt by the effects of trade competition.

The focus of APEC is on moving goods with a progressive trade system where we can find harmony in credible rules. To do this, we have to pay attention to the different rules of trade in different economies. This means that we will keep moving on multilateral and regional action. We expect that the current bilateral trade tensions will take place off the table, between the respective economies.

APEC’s goals for regional connectivity have helped move Pacific Rim economies towards greater prosperity

Could you share your thoughts about the prospects of APEC’s pursuit of free and open trade in the region by 2020 under Bogor Goals?

APEC has long dedicated itself to improving trade and investment. It has been doing this through a number of initiatives, the biggest of them being the Bogor Goals. The goals are a set of targets used to pursue free and open trade in developed economies by 2010, most of which has been achieved. However, we have not been completely successful yet. In addition, they have a target set for 2020 for free and open trade in developing economies. We have seen some progress and are going further on this.

Vietnam is currently organising a process to help us consider the direction of APEC beyond 2020. At that stage, we need to decide whether we will extend the Bogor Goals or push into other areas.

Can you talk about trade opportunities for small businesses and how APEC is working to support greater prospects in this area?

Small businesses in Vietnam make up a large part of the economy, and the same thing is true for all of the economies in APEC. But when we look at participation in international trade and investment, it all involves larger firms and the global supply chain. We now see the prospects of bringing the benefits of regional economic growth drivers into these smaller firms. We encourage them to focus on the possibilities they have to link up with the regional value chain and to make use of technology that is becoming available in digital economies and through electronic commerce.

That means we are now looking at a whole range of digital possibilities for small businesses to enter their goods and services into the regional markets. And all the while, we try to move towards harmonising ways of dealing with data privacy, cyber security, global data standards, localisation requirements, and other aspects these businesses need to work with.

What are your expectations for APEC Economic Leaders’ Week?

In November 2017, economic leaders from APEC will get together in Danang to talk about the achievements of the year, put them into perspective with a wider view of global economic progress, and give direction to APEC; to decide where we would like to see things going in the year ahead.

First of all, I expect to see leaders emphasise the importance of continuing regional economic integration in terms of improving people’s living standards and driving the economy forward. Bearing this in mind, they will certainly talk about the role of social inclusion and the importance of making globalisation work for all.

At the same time, I expect they will talk in detail about specific initiatives to improve regional economic integration, to improve food security in markets, to modernise small- and medium-sized enterprises, and many other initiatives that APEC has been working on this year. And they will talk about the direction in which they want APEC to move in the future.

What is the legacy APEC will have for Vietnam and the region as a whole, and where will things go from there?

Vietnam takes on a role of leadership in APEC during a potentially difficult year. There have been growing concerns about globalisation and uncertainty about where some regional trade agreements will end up. Vietnam is in a good position to deal with this because it is a potential member in the Regional Comprehensive Economic Partnership (RCEP) and the Trans-Pacific Partnership (TPP), a member of ASEAN, and the leading member of APEC this year.

With all our economies together, we will look at how regional economic integration will move forward and work out what to do this year to overcome the challenges that lie ahead.

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