Vietnam Engages the World

Discussion in 'Indo Pacific & East Asia' started by JAYRAM, Mar 17, 2012.


    JAYRAM 2 STRIKE CORPS Senior Member

    Mar 8, 2011
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    North Frontier, The Mighty Himalaya's
    March 14, 2012


    The Vietnam “story” has changed over time. First, it was a war story; then Vietnam “became a country” in the run-up to the normalization of U.S.-Vietnam relations in 1995. Now the country is moving forward with a new narrative, a strategy of active and proactive international integration.

    Now, the country’s top foreign policy makers have decided it’s time for Vietnam to fully launch itself into the international arena. In a conversation with the Council on Foreign Relations last year, Foreign Minister Pham Binh Minh said: “This was a turning point in our foreign policy, because before we focused on economic integration, but now we also integrate in all areas such as not only economic but politics, diplomacy, security, defense, culture and social effects.”

    This “active and proactive integration” will include the market’s “invisible hand” with all the resultant spillover effects. Vietnam’s trade volume now exceeds 160 percent of GDP. Being a member of the World Trade Organization and APEC, having concluded many free trade agreements and being part of the Trans-Pacific Partnership (TPP), Vietnam sees the world as a myriad of markets and business opportunities. Trade with China, for example, has increased 900 times since 1992. Vietnam has also become an attractive market for many other countries. In July, the U.S. 2011 National Export Strategy added Vietnam to its list of “next tier” markets, identifying the five important markets as Colombia, Indonesia, Saudi Arabia, Turkey, and Vietnam. Singapore alone has invested more than $23 billion in Vietnam. Vietnamese businesses have begun their own projects abroad, and they are now worth $11 billion.

    Vietnam’s term as a nonpermanent member of the U.N. Security Council during 2008 and 2009, and its chairing of the Association of Southeast Asian Nations in 2010 are two vivid examples of a country becoming more confident in international affairs. Deepening and upgrading relations with leading partners have been prioritized. Vietnam has had strategic partnerships with Russia, China, India, Japan, South Korea, Germany, Britain, Spain, the Netherlands, and is working to arrive at a relationship of that level with the United States. Relations with traditional friends and international organizations are also being strengthened.

    But two security issues have risen to the fore recently – the dispute over the East Sea (South China Sea) and tensions over Mekong water resources. In both cases, Vietnam’s sustained position is one of peace and negotiation. At the same time, it advocates adherence to international law, including the United Nations Convention on the Law of the Sea (UNCLOS) and the Declaration on the Code of Conduct, vis-à-vis the South China Sea, and other collective mechanisms such as the Mekong River Commission to deal with the water resource controversy. Vietnam’s stance on issues of concern is consistent with standards shared by the international community. In other words, the rules of the game are being respected. Vietnam has also shown willingness to work with partners within and outside ASEAN to create new ones as long as they are conducive to the preservation of peace and stability in the region such as the much debated Code of Conduct in the South China Sea. This confirms Vietnam’s commitment to genuine regional integration.

    Yet daunting challenges remain. The world is changing so fast and unpredictably that every foreign policy struggles to keep pace. On domestic issues, Vietnam needs to work harder to achieve a higher level of economic development; remarkable progress has been made since the introduction of Doi Moi (economic reforms) but Vietnam is still a poor country. This requires a response of Himalayan magnitude, which in turn demands quality policies and people.

    Quality requires having the right direction. Vietnam’s policymakers have been guided by the principle of self-reliance and internal strength. That is now coupled with the tapping of nonindigenous resources via international cooperation. Enhancing economic capability is critical, and so issues like restructuring state-owned enterprises (SOEs) top the national agenda. Prime Minister Nguyen Tan Dung says this is one of the three major targets for restructuring the national economy. Thus, some 1,300 SOEs will be restructured in the next five years, of which 573 will be privatized, according to an announcement by the Steering Committee for Restructuring State-owned Enterprises late last year. Significantly, the revamping of the economy must be done in a way that’s consistent with Vietnam’s commitments to the international business community.

    Strengthening defense capabilities is another important policy. In 2009, Vietnam issued its third White Paper on National Defense, which emphasizes a defense policy of peace and self-defense. That policy also attaches greater importance to international cooperation. Vietnam now has bilateral defense relations with 65 countries and participates actively in regional security and defense forums such as the Shangri-La Dialogue, the ASEAN Defense Ministers Meeting Plus (ADDM+), and the ASEAN Regional Forum (ARF). Since 2008, Vietnam has talked about joining peacekeeping operations (PKOs) within the U.N. framework, and specific actions have been taken. This is an another important indicator as analysts of foreign policy often use PKOs as an index of political integration into the international community.

    One could argue that full integration is a must for any country in today’s globalized world. But others argue that this might be too ambitious a plan for Vietnam, which faces real domestic obstacles and lags behind many international partners. For instance, every round of negotiation within the TPP forces Vietnamese negotiators to think about what they can do to protect and/or promote industries at home, especially when no small number of domestic enterprises and associations aren’t yet ready for competition. Several sticky issues emerging from the TPP for Vietnam include labor relations, government expenditure, and market access to some key industries.

    Integration is not only a natural development but is also a political decision. Cost and benefit calculations are therefore to be expected. The adoption of an active and aggressive integration strategy shows that Vietnam is well on its way, looking for opportunities and ready to take risks.

    Vietnam Engages the World | New Leaders Forum
  3. amoy

    amoy Senior Member Senior Member

    Jan 17, 2010
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    Maybe this is the appropriate VN/TPP related thread.

    Years old but quite a harbinger for Vietnam to become the next manufacturing powerhouse once TPP is in full swing.

    Challenges and Opportunities for Vietnam in the TPP negotiations

    Challenges for Vietnam in the TPP Negotiations

    • Reforming labor laws to standards acceptable to TPP members

    o Collective bargaining

    o Right to organize

    • Non-Market Economy (“NME”) status

    o Considered a market economy by some TPP countries and not others

    • U.S. NME criteria statutory/not discretionary.

    o Currency convertibility

    o Internationally accepted workers rights/free bargaining for wages

    o Foreign investment

    o Government ownership/control of means of production

    o Government control over allocation of resources

    o Other factors

    • The TPP negotiations will not remove current U.S. AD/CVD measures in place.

    o U.S. import relief measures on separate, domestic administrative track.

    • The TPP negotiations will not constrain U.S. trade remedy measures against dumped or subsidized Vietnamese exports.

    • Risk of future AD/CVD investigations remain

    • U.S. will continue to use the NME methodology in AD cases until Vietnam graduates to ME status.

    • Implementation and capacity constraints

    • Non-Conforming Measures– Vietnam wants to take liberal exceptions from its GATS MFN obligations that the U.S. has thus-far resisted.

    • TRIPS-plus IPR commitments

    • GPA accession

    • Environmental commitments

    • SOEs

    • Tough rules in import-sensitive sectors to minimize leakage (China)

    o Textiles/Apparel: yarn-forward rules, verification, no third country fabrics

    o Agriculture

    Opportunities for Vietnam in the TPP Negotiations

    • Comprehensive, regional free trade agreement

    • Once-in-generation opportunity to leap forward on:

    o Economic development and boost exports

    o Trade facilitation/supply-chain efficiency

    o Modernize/upgrade services sector

    o Accelerate privatization of SOEs

    o Open procurement market

    • Broad scope of TPP will have benefits deep into the Vietnamese economy

    • Cutting-edge disciplines on:

    o Services (insurance, banking, financial, legal and brokerage)

    o Investment

    o Telecommunications and e-commerce

    o IPR

    o SPS

    o TBT

    Opportunities for Vietnamese Exports

    - Preferential market access to all TPP countries

    • Reduced duty/duty free for key exports to ALL TPP countries

    • Most near-term market access benefits in sectors with significant current trade (textiles and apparel; footwear).

    o Aquaculture

    o Textiles and Apparel

    o Footwear

    o Furniture

    • Tariff reductions on exports to U.S. a tax cut for U.S. importers

    • Access to U.S. services sectors, longer-term benefit

    - Improvement to import relief practices

    • AD/CVD questionnaires in Vietnamese

    • Working-group on NME graduation

    • Govt-to-govt. consultations in AD and CVD cases (not just CVD)

    • Pledge not to use AD/CVD measures (long shot)

    • Use TBT/SPS TPP commitments to avoid disputes (e.g. basa and tra)


    Aquaculture (catfish fillets, shrimp and prawns, ect)

    • Exports from Vietnam: $500 million in 2009

    • U.S. tariffs: Duty free to 6% ad valorem

    Apparel (Chs 61 and 62)

    • Exports from Vietnam): $4 billion in 2009

    • U.S. tariffs : Duty free to 32% ad valorem, and/or specific tariffs per kg.

    Footwear (6401-6405)

    • Exports from Vietnam: $1.3 billion in 2009

    • U.S. tariffs: Duty free to 37.5% ad valorem, plus specific tariffs

    Furniture (9401 and 9403)

    • Exports from Vietnam: $1.35 billion in 2009

    • U.S. tariffs: Duty free

    - Gains on tariff reduction/elimination important for footwear and apparel.

    - Aquaculture and furniture already duty free


    TPP offers Vietnam a “not to be missed” opportunity to link its economy to the U.S. and other TPP members

    • Counter-balance to China’s regional influence

    • TPP will yield benefits deep into the Vietnamese economy:

    o Goods (potential for huge increase in exports of footwear and apparel; furniture and aquaculture

    o Services

    o Horizontal disciplines benefit Vietnam

    o regulatory coherence

    o SMEs

    o competition

    o Development

    Opportunity to influence future composition, scope and ambition of TPP

    • Industry/business community support key for TPP success

    o Emphasize Vietnam’s considerable offensive interests

    o Defensive interests will speak for themselves

    • Not in Vietnam’s interest to seek a two-tier agreement

    o Support high-standards, high-ambition agreement

    Opportunity for improved treatment in trade remedy measures

    • Future graduation from NME to ME status

    • Implementation challenges can be overcome:

    o political will

    o transition periods

    o capacity building assistance/outside resources.

    Laywer Jay L. Eizenstat, Esq

    Miller & Chevalier Chartered

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