APEC 2006 IN VIETNAM

Transcription

1 APEC 2006 IN VIETNAM By Phan Thanh Ha Central Institute for Economic Management and Nguyen Hoang Thuy Ministry of Trade Hanoi, Vietnam 2006 is a special year for Vietnam: the five-year plan for will be passed, Common Effective Preferential Tariffs (CEPT) system will be implemented in the framework of ASEAN Free Trade Agreement (AFTA) after ten years of preparation, and it is expected that Vietnam can finish his negotiations to join WTO. Moreover, Vietnam will host APEC 2006 as a result of consensus among APEC members. After 8 years of joining APEC, Vietnam is trusted by all APEC members to be in charge for APEC year APEC 2006 is not only a honor, but a challenge for Vietnam as an organizer. Recently, Vietnam hosted the ASEAN ministerial meeting and ASEM 4. But these events are not comparable with APEC 2006 which consists of many activities and lasts for a whole year. In total there are more than 100 events in APEC As usual the top event is the APEC leader summit in November. Before that ministerial meetings will be held. There will be 4 SOM meetings to help the leaders making decision for the next activities. In addition there are numerous symposiums on different issues. APEC 2006 has been prepared with great efforts of the whole government. Not only the substance of the events has been paid much attention, but also the logistics, propaganda, security, ext. Vietnam tries his best so that APEC 2006 goes far towards the Bogor goals. Besides Vietnam also wants to show himself as an open and dynamic economy, active in integrating with the world, in promoting trade, investment and tourism. 1

2 The slogan for APEC 2006 is Toward a Dynamic Community for Sustainable Development and Prosperity. The Bogor goals are trade and investment liberalization, but trade and investment liberalization are not our only objective. Common prosperity for the Asia-Pacific region is our final objective and sustainable development is a means to achieve that. As a community, Asia-Pacific region should take concerted efforts to get the set targets. For this purpose APEC should effectively respond to the challenges in a fast-changing international environment. What APEC 2006 will do to facilitate the progress towards the Bogor goals? 1. Support WTO negotiations To support the Doha Development Agreement (DDA) negotiations is the highest priority for APEC 2006 as decided at the first SOM meeting last March. APEC has opportunities to contribute to the WTO in following ways: to express continued political commitment by its members, to undertake technical initiatives or activities to support the WTO process, to build up WTO needed capacity and to coordinate with the Geneva Caucus. The first attempt is a strong and credible statement at the minister responsible for trade (MRT) meeting. The draft statement will be circulated in mid of May. In addition to DDA, there is another issue which needs joint efforts. That is the WTO accession of Russia and Viet Nam. These two members are approaching the final stage of negotiations. Regarding Vietnam, WTO members are satisfied with his most commitments such as immediate implementation of WTO agreements like Custom Valuation CVA, Import Licensing IL, Trade Related Intellectual Property Rights TRIPs, Trade Related Investment Measures TRIM, Technical Barriers of Trade TBT, Sanitary and Phytosanitary Standards SPS, Antidumping, Subsidies and Countervailing Measures. Vietnam also commits to accept non discrimination against imported goods and services, to abolish quantitative restrictions as well agricultural subsidies after accession. The negotiations on market access, both on import tariffs and services are still going on. The binding covers nearly all tariff lines and binding tariffs would not exceed the current levels; they will be cut down at the accession or shortly after that. 2

3 The discrepancies between Vietnam and WTO members remain just a few. They are SOEs, industrial subsidies, transparency and domestic taxation. WTO members are still unhappy with the practice of government intervention in SOEs business. Moreover, they find that SOEs still get subsidies from the government, especially in the forms of preferential credits. The government actually plays an important role in Vietnam s economy. But in general it does not intervene anymore in enterprise operation, including SOEs. This is stated in the laws and implemented in the practice. The exceptions are the cases where the government intervention is necessary for macro-economic stability, a precondition for economic development. This is common characteristic of the Asian economies, especially those at the first stage of development. Moreover, in 2005 Vietnam passed the common Enterprise Law and Investment Law which are applicable for all types of businesses: SOEs, private and foreign ones. These laws create a level playing field for enterprises of different ownership and prevents government agencies from unreasonable intervention in business in general, and the public sector in particular. Concerning preferential credits, it is noted that banks also do business. They may provide credits with lower rates to SOEs based on their evaluation of risks. The banks often choose SOEs clients because they find them more solvent than private ones. Lending to private firms often is more costly and riskier due to their small size. Industrial subsidies are requested by WTO members to be abolished immediately at the accession. On the one hand, it is acceptable for both Vietnam and WTO members on phasing out subsidies after accession. On the other hand, it is more rational to maintain subsidies for the projects which were granted before accession. There are some reasons for that. Firstly, the subsidies are insignificant by their size in both absolute and relative terms. For example, the disbursement of the export promotion fund in 2000 was USD 7 millions or less than 0.3 % of export revenues. Secondly, it is meaningful to keep the business environment stable and to ensure that changes in government policies do not adversely affect firms. Thirdly, the 3

4 government should respect commitments himself, including his commitments to grant preferences to firms. To create more transparency it is requested to open a government website where all draft legal documents are to be posted. Draft legal documents are also required to be published for comment and stakeholders to be given at least 60 days for that purpose. It is noted that draft laws are posted on the websites and currently all ministries and many provinces have their websites already. In addition, the government website is under preparation. Vietnam s APEC secretariat also has its website. Its address is http// Vietnam has adjusted special consumption tax to ensure non discrimination. Now the same special consumption tax rates are levied for domestic and imported products. But some WTO members still concern about potential discrimination against spirits because cognac, whisky and so forth are charged higher rates than wines. For long time in Vietnam spirits have not been highly recommended for public consumption due to their effects. Different rates for wines and spirits are not intended discrimination. 2. FTAs/RTAs FTAs/RTAs become more popular. One of the reason is that multilateral negotiations in facts are very slow due to consensus requirement. FTAs/RTAs may have divergence effects if there is no coordination taken place. It is proposed by 2008 to develop the model chapters of FTA/RTA which are comprehensive and consistent with the WTO rules. They should be adopted on a consensus and step-by-step basis and used flexibly. The application of measures included in these species should be non-binding, non-mandatory as APEC is for reference and models, dislike WTO- a rule-making institution. The list of possible chapters should be presented at SOM II for consideration. 3. Implementation of the Busan Roadmap The discussion is going on whether an action plan should cover all six key elements in the Roadmap (i.e. Support for Multilateral Trading System; Strengthening Collective and Individual Actions; Promotion of High-quality 4

5 RTAs/FTAs; Busan Business Agenda; A Strategic Approach to Capacity Building; and the Pathfinder Approach) or selected elements of the Roadmap. There is also a suggestion that the work program could be a multi-year one with the active involvement of future host economies. The Committee of Trade and Investment is assigned to incorporate relevant elements of the Roadmap into its work program in cooperation with its subfora and to report progress at the Senior Official Meeting (SOM) II. 4. APEC Reform APEC reform is another priority on the APEC agenda in For that a Friend of the Chair for Reform (FOTC) 2006 was established. It comprises of - The Senior Officials of Australia, China, Japan, Peru, Singapore, the United States, Viet Nam, and - The Executive Director and Deputy Executive Director of the APEC Secretariat and the Budget Management Chair (BMC), as ex-officio members. The reform will be conducted in three dimensions: - Improving Operational Efficiency which is led by Singapore; - Promoting Operational Linkage which is led by Australia; and - Enhancing Operational Dynamism which is led by the USA. APEC reform is a continuous process and Reform FOTC 2006 will ensure that reform measures approved in 2005 would be followed up for successful implementation. There are some suggestions for operational reforms, such as - As a forum, APEC Senior Officials should make every attempt to strengthen the informal atmosphere of their meetings. This would create the 5

6 synergy required for frank and blunt exchanges and reduce the bureaucratic approach; - SOM should avoid duplication with Working Groups, which are allowed to go on with what they are entrusted to do; - The role of the APEC Secretariat could be enhanced by undertaking research functions; and - Reform FOTC should rely more on information technology to enhance the work of APEC. 5. Tourism and Cultural Exchange Intra-APEC tourism cooperation is very crucial in contributing to regional socio-economic development, increasing mutual understanding, strengthening friendship and enhancing the sense of community among the APEC members. One of the priorities of APEC 2006 is to promote community linkages by synergizing tourism and cultural exchange. A Statement on Promoting Tourism Cooperation Among APEC Member Economies is expected to be delivered at the 4 th APEC Tourism Ministerial Meeting which is to be held in October Before that the Tourism Working Group will elaborate and discuss the measures to promote APEC tourism cooperation, such as - Organize annual APEC Tourism Fair; APEC Tourism and Investment Mart; - Reduce unnecessary procedures like visa requirement - Facilitate connecting tours and direct flights between the world cultural heritages. Vietnam proposes cultural exchange activities including the second APEC Film Festival and an APEC Photo Exhibition. The plan for that will be submitted to SOM II for consideration 6

7 6. Research on Socio-Economic Disparity Following APEC Leaders Busan Declaration in November 2005 to conduct a study of ways to confront the challenges and impediments related to socio-economic disparity issues, it is proposed to undertake research in order to - Enrich the understanding of socio-economic disparities as a consequence of trade and investment liberalization ; - Ensure that all people have the opportunity to share the benefits generated by trade liberalization and economic growth. The proposal includes an international symposium between SOM II and SOM III in The work may extend beyond Private Sector Development with Focus on SMEs In the Busan Declaration, APEC Leaders welcomed the initiative to develop a Private Sector Development agenda for APEC to create an enabling environment for small businesses. A symposium is to be held to Examine the link between improvement of business environment and productivity/growth; Share best practices and positive examples ; Identify possible government action/attention and Propose possible capacity building projects and other means to improve business environment within the region. * *** There is a lot of work to do for Vietnam as a host of APEC As the latest APEC member Vietnam needs APEC members and APEC 7

8 secretariat s assistance in many aspects: technical, financial and organizational. This symposium is an valuable and timely attempt to contribute ideas to APEC 2006 in Vietnam. All discussion, ideas presented and experience shared at the symposium is particularly worthy for Vietnam as a host and APEC as a whole. 8