Diplomatic Academy of Vietnam, MOFA ASEAN ECONOMIC COMMUNITY (AEC) AND ASIA PACIFIC ECONOMIC COOPERATION (APEC) – A PERSPECTIVE FROM VIETNAM By Dr. LUAN THUY DUONG Director General, Diplomatic Academy of Vietnam, MOFA

APEC’s OBJECTIVES Objectives Guiding Principles To Sustain the growth and development of the region for the common good its peoples and, in this way, to contribute to the growth and development of the world economy. To enhance the positive gains, both for the region and the world economy, resulting from increasing economic interdependence, including by encouraging the flow of goods, services, capital and technology. To develop and strengthen the open multilateral trading system in the interest of Asia-Pacific and all other economies. To reduce barriers to trade in goods and services and investment among participants in a manner consistent with GATT principles, where applicable, and without detriment to other economies. Guiding Principles The principle of mutual benefit, talking into account the differences in the stages of economic development and in the socio-political systems, and giving due consideration to the needs of developing economies. A commitment to open dialogue and consensus-building, with equal respect for the views of all participants. (From the Seoul APEC Declaration of 1991)

AEC’s PRIORITIES The AEC areas of cooperation include human resources development and capacity building; recognition of professional qualifications; closer consultation on macroeconomic and financial policies; trade financing measures; enhanced infrastructure and communications connectivity; development of electronic transactions through e-ASEAN; integrating industries across the region to promote regional sourcing; and enhancing private sector involvement for the building of the AEC. In short, the AEC will transform ASEAN into a region with free movement of goods, services, investment, skilled labor, and freer flow of capital. By 2015, the ASEAN Economic Community (AEC) shall envisages the following key characteristics: (a) a single market and production base, (b) a highly competitive economic region, (c) a region of equitable economic development, and (d) a region fully integrated into the global economy.

AEC and APEC: the interaction ASEAN and APEC share many objectives and priorities in promoting economic and developmental cooperation in Southeast Asia and the wider Asia Pacific region ASEAN's purposes are entirely consistent with those of APEC. Indeed, ASEAN has been at APEC's core from the very beginning. In a real sense, the ASEAN Free Trade Area and ASEAN Economic Community can be said to be a building block for the fulfillment of the goal that APEC set for itself in Bogor in 1994 - eventual free trade among its members, which in turn is part of the global effort to bring down barriers to international trade. ASEAN has focused on connectivity for some years as a central pillar of their work on integration and community-building.  In particular, the objective of building an ASEAN economic community by 2015 calls for an economically well-connected region.  To promote this, ASEAN established a Connectivity Master Plan outlining challenges to improve regional and national physical, institutional, and people-to-people linkages.  APEC have been taking lessons from the connectivity and involving a mapping exercise to identify APEC

AEC and APEC: the collaboration Seven broad areas of possible collaboration have been identified , based on the potential overlap of work and the importance of these priority areas to both institutions’ agendas.  These areas included Supply Chain Connectivity as well as Trade Facilitation, Investment Facilitation, Disaster Preparedness, Structural and Regulatory Reform, Food Security, and Small and Medium Enterprises (SMEs). To be more specific on the connectivity goal, APEC are interested in the possibility of working together with ASEAN, on ongoing work on customs procedures, risk management methodologies, advance rulings. and single window procedures, the authorized economic operator approach, aviation and multimodal transport, mutual recognition agreements and harmonization of approaches.

ASEAN and APEC: the differences APEC should not simply be seen as a way to extend the ASEAN model Pacific-Wide because there are important differences in the two organizations.  The objectives of ASEAN go beyond economic integration into security, political, cultural and social issues. APEC, with its 21 economies, covers a much wider geographical region, different stages of developments, and it involves economies that are quite different from one another.   Therefore any focus on APEC connectivity needs to be carried out at a level that is broad enough to engage all members.  On the other hand, there are different connectivity issues at the APEC level, and it is harder to develop joint projects with the developing economies and with the ASEAN members.

ASEAN and APEC: Vietnam’s membership  Vietnam joined ASEAN in 1995 and APEC in 1998. APEC economies have hailed Vietnam's international integration efforts in all fields as having contributed to the maintenance of peace and stability in the region and in promoting dialogue and regional connectivity. Vietnam will be the country works as a coordinator between ASEAN and APEC in 2015 and hosts the APEC Summit in 2017. What are the opportunities and challenges that Vietnam is facing to contribute to ASEAN, the AEC and APEC?

Opportunities and Challenges for Vietnam Although the APEC co-operation process has created advantages and opportunities for Vietnam, there remain a lot of difficulties. The awareness about APEC among the public, particularly the business community, remains limited. The legal system on trade still reveals weaknesses. In addition, Vietnam lacks qualified human resources, while businesses’ competitive capacity remains low. Vietnam has taken basic steps to prepare for integration in AEC, especially on governance and reform of institutions and administrative procedures consistent with international practices, as well as committed regional agreements. However, Vietnam still faces a number of difficulties, especially in terms of the infrastructure, the business environment, legal frameworks, the support given to enterprises, the technological innovation and market research.

Vietnam’s action plan Vietnam will continue to expand its external relations, actively integrate into the world economy in an appropriate roadmap, while ensuring the implementation of bilateral and multilateral commitments within AFTA, AEC and APEC Vietnam has been introducing its legal system to other APEC countries, to ensure the transparency of its investment and trade policies to attract foreign investment into Vietnam. It will learn experience from other APEC member countries to revise its policies in line with international norms. In addition, through the AEPC co-operation process, the country will boost human resource, technology development and information dissemination.