The Hanoitimes - Asian Pacific Economic Cooperation (APEC) is the beginning of more than half of the world free trade agreements and brings massive benefits to its economic members. However, with the rise of protectionism and imported tariffs, it is necessary for APEC to be active and have solutions to overcome challenges.
At the conference with regard to Regional Trade Agreements (RTAs) and Free Trade Agreements (FTAs) in Ho Chi Minh city, Vice Minister of Foreign Affairs Bui Thanh Son said, more than half of the number of FTA in the world started from 21 economic members of APEC. In the recent 30 years, RTAs/FTAs in APEC have witnessed breakthroughs compared to other regions in the world.
Trade transactions with regard to goods and services have increased 6.7 times, with the total value of 20 trillion USD in 2015. The average imported tariffs reduced from 17% in 1989 to 5.6% in 2014, thanks to the improvement in trade and investment relations, as well as the efficiency of bilateral and multilateral trade agreements.
The APEC Economic Leaders’ Meeting will be held in the upcoming November in Da Nang, Vietnam.
According to statistics from the APEC Secretary board, as of 2016, more than 150 RTAs/FTAs, in which include at least one APEC economic member, have come into force, including nearly 60 RTA/FTA signed between APEC economic members. Recently, more and more new generation of FTAs in the region have come into force, which focused on new regulations with regard to trade and investment, with an aim to solve issues related to cross-border and imported tariffs. Thanks to positive impacts from RTAs/FTAs, trade transactions within APEC have increased at 274%, from 2.3 trillion USD to 6.3 trillion USD in period 2000 – 2016.
The formation of RTAs/FTAs have significant meaning to APEC economic members, which includes Vietnam. According to the Minister of Industry & Trade Tran Tuan Anh, for Vietnam, APEC is one of the most important multilateral forum with practical benefits. In particular, since FTAs of Vietnam and other partners in the world came into force, domestic export companies have better access to international markets. According to information of the Vietnam Custom Administration, trade value of Vietnam in 2014 was 98.37 billion USD; in 2015, the number had increased at 8% to 106.12 billion USD and in 2016 reached 119.69 billion USD. 7 APEC economic members are in the top 10 biggest export markets of Vietnam, including: the US, China, Japan, Korea, Hong Kong, Malaysia and Singapore.
However, after fulfilling its commitment on the free trade and investment within the framework of APEC, Vietnam is facing challenges and pressures from foreign companies, which requires domestic companies to improve and compete in domestic market.
Despite RTAs/FTAs have brought positive impacts for economic growth of APEC economic members, but there remains concern over protectionism and imported tariffs. This has caused the slowdown of free trade progress and market opening, which is the biggest challenge for Vietnam and some APEC economic members. According to the Minister Tran Tuan Anh, APEC is considering the vision and development strategy after 2020, which is after the completion of Bogor goals that aim to achieve free and open trade and investment by 2010 for industrialized economies and by 2020 for developing economies. 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 is an ambitious manifestation of APEC's common belief that free and open trade and investment are essential to realize the growth potential of the region and enhance economic and social outcomes for all APEC economies.
However, with the rise of protectionism and imported tariffs, it is unclear whether these Bogor goals can be achieved, which require APEC to be active and have solutions to overcome challenges. According to the Minister Tran Tuan Anh, after 2020, APEC has to put up effort to ensure its economic members to continue opening their economies for trade and investment development.