On the occasion of the New Year 2014, Vietnam Business Forum interviewed Deputy Prime Minister and Foreign Minister Pham Binh Minh on the implementation of the XI Party Congress Resolution on foreign policy and international integration. Nguyen Mai reports.
Deputy Prime Minister and Foreign Minister Pham Binh Minh affirmed that in 2013, Vietnamese diplomacy recorded both comprehensive and strategic achievements. Vietnam is among few countries establishing comprehensive and strategic partnership with all big powers. We have upgraded our relations to strategic partnership with 13 countries in Asia and Europe including comprehensive strategic partnership with China and Russia, comprehensive partnership with the United States and Denmark. Those countries are also major trade and investment partners of Vietnam, for instance, Japan, Singapore and South Korea. In 2013, diplomatic relations were also enhanced by the exchanges of visits of Vietnamese and foreign leaders such as visits to Vietnam by Chinese Prime Minister, Russian President and President of Republic of Korea, while Vietnamese Party General Secretary visiting India, UK and EU, Vietnamese President visiting China and the US, and Vietnamese Prime Minister visiting Russia, France and Japan. Multilateral diplomacy was upgraded in 2013 with impressive messages made by Vietnamese leaders at various international forums. Also in 2013, Vietnam, for the first time, was elected to the UN Human Rights Council with the highest votes, as President of IAEA Governor’s Council for 2013-2014, and member of UNESCO International Heritage Committee for 2014-2017. Vietnam has also been entrusted for the second time hosting APEC Summit in 2017. Presently, Vietnam is actively participating in UN peace-keeping force and standing for its second candidacy as non-permanent member of UN Security Council for 2020-2021 and ECOSOC. Vietnam has not only participated in multilateral diplomacy, but also proved to be a responsible member of the international community.
What are the main tasks of Vietnamese diplomacy in 2014?
2014 is an important year to implement Party XI Congress Resolution and Politburo Resolution 22 on international integration. The priorities are to maintain peaceful environment and stability, facilitate socio-economic development, defend national independence, sovereignty and territorial integrity and attract more resources for national construction. Accordingly, diplomatic activities of the Party and State in 2014 will focus on the following:
-High priority for the implementation of Politburo Resolution 22 on international integration with 2014 diplomatic theme of “Pro-active diplomatic activities for international integration” to successfully implement the programme of action set forth by the 28th Diplomatic Conference.
-Continued priority for the enhancement of stable cooperation and friendship with neighbouring countries, fair treatment of existing problems and newly arising issues on the basis of equality and international law.
-Continued efforts to develop relations with other countries, especially countries of strategic and comprehensive partnership, for deeper, more efficient and stable relations, and promote the implementation of agreements already concluded for mutual interests.
-Increased activities of economic diplomacy with priority for research and consultancy on economic policy, especially in economic restructuring and growth model, assisting negotiations on TPP, RCEP and trade agreements with EU, Russia-Belarus-Kazakhstan Customs Alliance, increasing the recognition of Vietnamese market economy status, assisting Vietnamese businesses to expand export markets and investment partners, protecting Vietnamese interests in commercial disputes, against protectionism and double standard in trade. By those activities, economic diplomacy can contribute the economic growth, macro-economy, FDI attraction, market expansion and others.
How did economic diplomacy assist Vietnamese businesses in international integration in 2013?
In the process of international integration, economic diplomacy is an important task. We participated actively in negotiations and promoted free trade agreements. In line with regional and world tendencies of free trade, Vietnam has participated in negotiations for six trade agreements: Trans-Pacific Partnership (TPP), Regional Comprehensive Economic Partnership (RCEP), Free Trade Agreements (FTAs) with EU, Republic of Korea, and Russia-Belarus-Kazakhstan Customs Alliance. We have also succeeded in convincing other countries to recognize Vietnam as market economy. So far 43 countries have recognized Vietnam as market economy. Promotion for trade, investment and tourism have also been intensified to assist Vietnamese businesses and localities to expand markets and find partners with such activities as Vietnam Days in Italy (January 2013), Meeting between Diplomatic Corps and Central Coastal Provinces (June 2013), Vietnam Days in Japan (September 2013), Mekong Delta Economic Cooperation Forum in Vinh Long province (MDEC, November 2013).
What advantages and challenges will Vietnamese businesses face in TPP?
TPP is a multilateral negotiation with larger scale, new items and more commitments than any trade agreements we ever had. In implementation, TPP will make up 40 percent of world GDP and one third of international trade. Therefore it will have strong and multi-faceted impact on all economic sectors and business community.
As an export-oriented economy, Vietnam will have great benefit from TPP. Leading independent research institutes believe that Vietnam will get the biggest benefit from TPP.
First, Vietnam can expand trading space. Vietnamese exports, especially agricultural products, apparel and footwear can reach markets of nearly 800 million people, especially the US, with low tariffs and trade advantages of TPP system.
Second, Vietnam can receive more foreign investment flows; expand business cooperation, approach high technology and modern management skill from leading economies of the region. Consequently, Vietnamese businesses can participate deeply in regional and global production and supply chains.
Third, Vietnamese businesses can have a bigger choice of goods, equipment, machinery, materials and services of high quality and lower prices from TPP members for economic restructuring, especially in the agricultural sector.
Fourth, TPP includes provisions to promote small and medium sized enterprises (SMEs). It is very important for Vietnam, an economy with high percentage of SMEs. Vietnamese businesses can benefit from assistance programmes of technology and human resources development reserved for developing countries, members of TPP.
Finally, TPP can create more favourable business environment for local businesses. TPP negotiations take place at the time Vietnam is surging forward and the government is fully committed to restructuring and market economy. TPP will motivate those efforts, promote transparency, simplify administrative formalities, and allow businesses to participate more efficiently in the process of policy making.
Opportunities brought by TPP are great; however, they remain as potentials, while addressing the challenges are truly crucial for both businesses and national economy.
First, Vietnam will be under the pressure of competition when opening its market to goods and services of partner countries. Vietnamese businesses will have to compete, most critically in the domestic market, especially for sectors of small size, poor quality and low competitiveness.
Second, In addition to the risk of opening home market, commitments and higher criteria on intellectual property, environment and labour are actually new forms of protectionism under the guise of quarantine, labour code, trademark, environment and certificate of origin. Those commitments will cost Vietnamese businesses more for compliance and can even neutralize their advantages of tariff reduction from partners.
Third, Vietnamese businesses can also face the danger of being annexed, contractual for foreign companies, especially when trans-national corporations expand their business activities in Vietnam.
Fourth, In cooperation with foreign partners, Vietnamese businesses have to keep up with new criteria on product quality, delivery time and new business operations, such as online transaction and e-commerce.
Another challenge is that Vietnamese businesses, in particular State-own enterprises, can no longer monopolise the market. They have to re-position themselves in the market, adapt new thinking and new practice for their own existence and development.
The pros and cons regarding FTAs in general and TPP in particular might be different for particular sectors and businesses. The lesson of joining WTO shows that we must take the initiative, reform policies resolutely and quickly, especially businesses and localities must be well-prepared and fully aware of the new conditions.
The road ahead is wide open. Hopefully, the Vietnamese business community will make joint efforts to attain the bright future. On the occasion of Tet and New Year 2014, on behalf of the government, I wish Vietnamese businesses every success in their creativeness and development.
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