During the past 30 years, regional trade agreements (RTAs) and free trade agreements (FTAs) within APEC framework have made strides compared with other regions around the world. Trade transaction of goods and services has increased by 6.7 times with a total value of approximately US$20 trillion in 2015.
The average tariff was cut down from 17% in 1989 to 5.6% in 2014 thanks to the consolidation of trade and investment relations along with the significant increase of bilateral and regional FTAs.
At the recent dialogue on RTAs and FTAs in Ho Chi Minh City, Deputy Minister of Foreign Affairs Bui Thanh Son affirmed that over half of FTAs across the world originated from 21 member economies of APEC. According to statistics from the APEC Secretariat, by 2016, more than 150 RTAs/FTAs (with the participation of at least one APEC member) took effect and nearly 60 RTAs/FTAs were signed and implemented between APEC members.
In recent years, more and more new-generation FTAs have been focusing on 'new-generation' trade and investment content, which effectively deal with 'behind-the-border' and non-tariff issues.
Thanks to positive impacts of RTAs/FTAs, trade transaction among APEC members increased by 274% from US$2.3 trillion to US$6.3 trillion in the 2000-2016 period.
The formation of RTAs/FTAs is of great significance to APEC member economies including Vietnam. According to Minister of Industry and Trade Tran Tuan Anh, APEC is one of the most important multilateral forums for Vietnam, which has also brought about substantial benefits. Specifically, APEC gathers 13 out of 25 strategic partners, comprehensive partners and other leading trade partners of Vietnam. In addition, 18 APEC members are important partners involved in bilateral and multilateral FTAs with Vietnam.
APEC members also account for 78% of the foreign direct investment (FDI) capital, 75% of goods transaction, 38% of official development assistance (ODA) and 79% of foreign tourists to Vietnam.
In particular, after the FTAs signing between Vietnam and its partner took effect, domestic exporters have reached out to the world in an easier manner.
Dang Xuan Quang, Deputy Director of Foreign Investment Agency under the Ministry of Industry and Trade said that, beyond all predictions, Vietnam posted a record high of over US$28 billion worth of FDI in the first ten months of 2017. All large-sized projects registered to invest in Vietnam in the first ten months of this year are from enterprises from APEC member economies. Seven APEC member economies are now included in the top ten exporting markets of Vietnam.
APEC member economies also poured a total investment of US$24 billion into Vietnam in the first ten months of this year, accounting for 85% of the total FDI in Vietnam during the period.
As the host of APEC 2017, Vietnam also has golden opportunities to increase FDI attraction. There are also good prospects for Vietnam to attract more high quality investment inflow from APEC.
Although RTAs/FTAs have brought about favourable conditions for socio-economic development of APEC member economies, there raises concerns about the emergence of trade protectionism and non-tariff measures, thus slowing down efforts to promote trade liberalisation and market opening. This is a big challenge facing Vietnam and several APEC member economies.
Minister Tran Tuan Anh said that APEC began to discuss its prospects after 2020, following the completion of Bogor goals which aimed to turn APEC into the world’s leading region of trade and investment liberalisation. In the current context, the rise of doubts about the benefits of globalisation and trade liberalisation has created conditions for the outbreak of trade protectionism.
Anh noted that after 2020, APEC still has much work to do to ensure that its member economies will continue their commitments on market opening for trade and investment in the region.
Besides the building of a working agenda to handle trade and investment barriers in the region, Vietnam together with other APEC members are promoting several initiatives related to sustainable, inclusive and innovative growth to ensure that different entities in the economy benefit from globalisation and trade liberalisation.
Chairman of the Vietnam Chamber of Commerce and Industry (VCCI) Vu Tien Loc affirmed that APEC 2017 would prioritise the support of small and medium-sized enterprises including micro-enterprises so that they will have opportunities to approach and connect with the global value chain. Vietnamese enterprises expect that with a series of RTAs/FTAs, trade flow between APEC member economies will become stronger in the future, Loc added.
