APEC 2017: Challenges and Opportunities in Vietnam
VietNamNet Bridge - Hosting APEC Year 2017 in the global political and economic context with many changes and fluctuations on many levels, Vietnam faces many challenges as well as opportunities.

After 11 years, Vietnam hosted APEC for the second time in the context of the world and region with many complicated political and economic developments. APEC is entering the last phase in the process of accomplishing the Bogor Goals and the liberalization of trade and investment in 2020. However, developments in the region and in the world show that there are many obstacles to the process of globalization and regional integration.

It can be said that the APEC Year 2017 hosted by Vietnam is a great opportunity for Vietnam to contribute to shaping the future not only of APEC, but also of the regional economic structure. As a dynamic and responsible member of the region, APEC Year 2017 reaffirms multilateral foreign policy as the cornerstone of the economy, regardless of scale, to maximize benefits and empowerment in a globalized world.

Regarding these issues, VietNamNet spoke with Mr. Bui Hong Duong, Head of the APEC Affairs Division, Multilateral Trade Policy Department of the Ministry of Industry and Trade and Mr. Tran Viet Thai, Deputy Director of the Foreign Affairs Research Institute of the Ministry of Foreign Affairs, Director of the APEC Research Center of Vietnam.

APEC 2017: Challenges and Opportunities in Vietnam

Photo: Mr. Tran Viet Thai (left) and Mr. Bui Hong Duong (right). 

Many opportunities and challenges

VietNamNet: This is the second time Vietnam has hosted the APEC Summit. Please tell us what opportunities and challenges the APEC Year 2017 will pose to the host country?

Bui Hong Duong: Vietnam joined APEC in 1998 with Russia and Peru as the last three members of the organization, raising the number of members to 21. It can be said that Vietnam is a very responsible, dynamic, and active member. Eight years after joining APEC, in 2006 we hosted APEC Summit for the first time, and now after 11 years, we will host APEC for the second time.

Joining APEC and hosting the APEC Year 2017 in the political and economic context in the world with many changes at many levels, Vietnam faces many challenges as well as opportunities.

Let’s talk about the opportunity first. Firstly, this event contributes to enhancing Vietnam's prestige in the international arena, in the region, especially in the Asia-Pacific region, which is considered the most dynamic developing region in the world.

Secondly, as the host of APEC Year 2017, Vietnam can take advantage of the integrated opportunities by adding the policies of the Party, State and Government of Vietnam into APEC agenda. For example, we can prioritize support to small and medium enterprises to reach international and regional markets, or give priority to e-commerce, sustainable development, and inclusive development.

Thirdly, on the sidelines of ministerial-level meetings and senior officials’ meeting, Vietnamese leaders always have bilateral meetings with their counterparts to strengthen economic and trade coordination between Vietnam and its partners, as well as to sign new agreements to strengthen bilateral relations between Vietnam and other countries.

Finally, business communities also have the opportunity to expand their networks to regional and international markets. During the summit week, there will be events such as the Vietnam Business Summit, the dialogue between APEC economic leaders and the business community.

Next is the challenge. Firstly, in the context of political and economic changes, there are some emerging problems. Some economies have changed their policies and they may not be as interested in integration as they were in the past and they want to solve domestic problems first. This also makes it difficult for us in the process of coordinating the APEC Year 2017.

Secondly, APEC is a forum with 21 member countries, which have a great diversity in terms of culture, politics, as well as the level of development. Thus, their perception of economic integration and their concerns are also different. As the host country, it is difficult for Vietnam to harmonize the views of developed and developing countries to achieve the final result of the year. It requires our flexibility and dynamism when coordinating events of the APEC Year 2017 and we may need bilateral consultations, convince members to come to a common view.

Another challenge is the view on WTO. The negotiation process in the WTO has been stagnant since 2001, since the Doha Round. As a result of this delay, countries have tended to switch to bilateral FTA negotiations. So, to some extent, they may no longer be interested in multilateral and regional cooperation.

VietNamNet: What is your opinion, Mr. Tran Viet Thai?

APEC 2017: Challenges and Opportunities in Vietnam

Mr. Tran Viet Thai

Mr. Tran Viet Thai: I would like to have some more ideas about this issue.

In terms of opportunities, apart from asserting our position, role, and strengthening relationships with key partners since many APEC economies are partners of Vietnam, I think this is a very good opportunity to promote the country’s image to the world, especially Da Nang as the center. With this summit, Da Nang will be introduced to the region and the world as a new dynamic center of the world and this is a very good opportunity for this city as well as neighboring localities in the central region like Hoi An, Hue ... to rise up.

In addition, we can utilize the resources of APEC economies, though not very large, to serve socio-economic development, especially the socio-economic development strategy to 2020, maybe later.

These are opportunities that are not easy to obtain without such a big event on our territory.

As for the challenge, I agree with Mr. Duong’s ideas but I would like to group them up.

The first group of challenges is the strategic issues. The context when we assume the task of hosting the APEC Year 2017 is very different from 2006 and the previous time. The financial crisis in 2008 then, but now there are new trends like populism, trade protectionism, anti-globalization, which are very strong

We realize that the competition among the largest economies in APEC - the US and China – has become  more obvious in recent years. They differ in the viewpoints and their sources of access, for example the construction of the Asia-Pacific Free Trade Area (FTAAP). Especially this year, at the first and second APEC Senior Officials’ Meetings (SOM), which both I and Mr. Duong attended, it was surprising that the US delegation did not speak much. It was because they did not have specific policies at that time and they just had a new president so it is difficult for us to identify them. Until recently they have been more explicit. But to tell the truth, handling problems of America itself is hard, and it is even harder to reconcile their competition.  

The second group is technical challenges. Over the past few years, the APEC Policy Support Unit (PSU) reviewed the implementation of the Bogor Goals and it has identified one thing that is absolutely correct. It is in addition to the sharp reduction of tariff barriers, non-tariff barriers and technical measures have greatly increased. We also want to reduce barriers to facilitate export, and other countries too, but tackling this challenge is not easy. That is not to mention other technical issues, the difference between the views, qualifications, benefits as Mr. Duong mentioned.

Inclusive growth: No one is "abandoned"

VietNamNet: Why is"inclusive development" considered to be the focus of APEC this year?

APEC 2017: Challenges and Opportunities in Vietnam

Mr. Bui Hong Duong

Mr. Bui Hong Duong: The issue of "inclusive development" is in fact "inclusive growth". Since 2010, when the APEC Summit was held in Yokohama, Japan, APEC leaders outlined APEC's growth strategy with five key implications, including inclusive growth. After five years of implementation, in 2015, APEC leaders continued to adopt the quality growth strategy for the period 2015-2020.

Thus, Vietnam’s identification of "inclusive growth" as one of the priorities of this year is the continuation of the results previously identified by the APEC leaders and we will continue to implement it in the future. 

I think "inclusive growth" means putting all financial and social issues into growth. We will need to pay more attention to vulnerable people in society. For example, we put small and medium-sized businesses in the overall growth target of the economy to help them grow and integrate better into the regional and world economies.

Mr. Tran Viet Thai: Over the past few years we have emphasized "inclusive growth" because we do not want to leave any part of our society or business out of this process. After the crisis in 2008, in international relations, international economic relations as well as international trade relations, there is a reality that the impact of globalization divides economies and social classes, including the weaker groups, which are vulnerable to market entry, especially when it comes to integration.

We put this "inclusive growth" goal into APEC agenda to reach consensus among countries, which also supports our growth strategy as well as ensure that all components of the economies in the region, including the people, benefit from inclusive growth and development. In the process of facilitation and liberalization of trade and investment as well as integration, they enjoy the fruits and are not abandoned or left behind. That's the point that we think very important.

Businesses should be proactive and should not act individually

VietNamNet: The Vietnam Business Summit is considered an initiative of Vietnam and will be held annually, with a special session on the special economic zone, which is still a matter of Vietnam. What will Vietnam bring to the discussion on this topic?

Mr. Bui Hong Duong: This is an initiative of Vietnam that will be an opportunity for businesses of Vietnam and in the region to meet and exchange with each other. The APEC Business Summit will be held on November 7, under the guidance of the Prime Minister and leaders of ministries and localities, which shows that the Government is very interested in connecting businesses.

In terms of special economic zones, Vietnam has to learn a lot. This is a chance for us to listen to the experience of the world.

VietNamNet: What should the Vietnamese business community do to make sure that they do not miss the golden opportunity offered by APEC Year 2017?

Mr. Tran Viet Thai: In my opinion, there are three things to focus on. The first is the connection. An occasion when thousands of foreign businesses visit our "home" is really a golden opportunity with a cheap cost. Vietnamese enterprises should actively connect, exchange and introduce their products and services. The second is promotion associated with the media. The third is building capacity for our businesses in integration.

Mr. Bui Hong Duong: In APEC, we have paid close attention to public-private dialogue, dialogue between the Government and businesses. It is an opportunity for businesses to reflect their problems and policy challenges that need to be solved, for example creating capital resources or disseminating FTAs.

The public-private partnership channel in APEC is very important and really useful. Vietnamese businesses should take advantage of that dialogue. 

Secondly, in APEC there are programs such as business travel cards, for example, which is a very useful program. Currently there are about 19 participating countries. According to the Government's regulations, there are 3 titles to be granted with the card - the chairman of the board of management, the general director and the chief accountant. This card makes it easy for businesspeople to go abroad easily and quickly without having to apply for a visa.

The dialogue between the business community with APEC economic leaders is also very important. Every year, the APEC Business Advisory Board has a brochure to offer advice to businesses and recommendations to governments to improve the quality of their business environment. Businesses should take advantage of that opportunity.

VietNamNet: How will small and medium enterprises in the start-up business sector face difficulties when making cross-border transactions and accessing the market?

Mr. Tran Viet Thai: Cross-border trade cooperation as well as access to international markets requires many factors. The first is the legal element. You must know well the legal issues, business conditions of the partner country that you intend to approach. To prepare for this, the first step is to get legal advice, but for small and medium enterprises, it is difficult to have legal advice for each individual firm. Lawyers should provide a common service to small businesses.

The second is social culture. For example, in the food and foodstuff industry, food safety standards are very different. To export food to Malaysia or Indonesia, for example, you must meet standard Halal, which few products of Vietnam can satisfy. In Malaysia, chicken must be slaughtered at night to meet Halal standards. Apart from legal issues, consumption habits and religious beliefs have a great influence.

Third is the issue of credit, people, and mechanisms. It is simple for small businesses to do small things in the home market but when they start approaching the big international market, it is different. My recommendation is that small and medium enterprises must reorganize, and should not go alone. Most important, they must be active even at home.

Mr. Bui Hong Duong: This year, on the occasion of the APEC Year 2017, the Ministry of Industry and Trade has built a framework to facilitate cross-border e-commerce. This initiative was approved at the Trade Ministerial Meeting in May and the SOM3. In the near future we will present it to the APEC Foreign-Economic Inter-Ministerial Meeting for approval. We also work with Japan to develop a good set of supporting industries. These are the two initiatives that Vietnamese have completed and will be adopted at the APEC Foreign-Economic Inter-Ministerial Meeting.

APEC 2017: Challenges and Opportunities in Vietnam

VietNamNet reporter and the two guests.

VietNamNet: In APEC Year 2017, the topic of the Small and Medium Enterprise Ministerial Meeting is: "Enhancing Competitiveness, Innovation of Micro, Small and Medium Enterprises in the Age of Globalization". In your view, what are we going to do to improve the competitiveness and innovation of small and micro enterprises in the era of globalization?

Mr. Tran Viet Thai: One of the focus of this year, besides finding new motivation for growth, food or labor in the digital age ..., I think the capacity for small and micro enterprises is always the priority for many years. This year it is linked with the digital era, which is influenced by the 4.0 revolution with the advent of many scientific products such as robots, artificial intelligence, cyberspace ... That is the risk for small and micro-enterprises, especially in terms of labor recruitment and participation in the value chain and the supporting industries ...

As the initiative of the Ministry of Industry and Trade and other ministries, I think the first step is to approach technology, improve access to capital, promote start-ups, build teams, or broadly, build human resources and connect them with assisting tools, and provide them with information. The direction has been deployed, and this year the highlight is the new technology era.

Mr. Bui Hong Duong: I agree with Mr. Thai’s opinion. We stressed many times that businesses must take the initiative in taking advantage of opportunities of integration. In addition to the State and Government’s efforts to clear up administrative procedures, implementing the one-stop mechanism, negotiating FTAs or reducing tariffs, border and cross border barriers, and even beyond-border barriers - the use of procedures that may negatively affect our exports by other countries, businesses have no other way to save themselves, especially in the age of new technology, by groupinginto associations.

Thank you for your time with VietNamNet!

APEC 2017: Challenges and Opportunities in Vietnam