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FTA or not?
VietNamNet - As Vietnam’s bid to join the WTO comes to its conclusion, economic experts are drawing the public’s attention to another topic: What should Vietnam about free trade agreements (FTA) within ASEAN?
Vo Tri Thanh, Director of Department for Trade Policy and International Integration Studies under the Central Institute for Economic Management (CIEM) expressed his opinion on whether Vietnam should seek bilateral relations under FTA. Mr Thanh has returned from a series of workshops, kicking start of APEC Vietnam 2006.
It seems that while Vietnam is making a lot of exertion to get the WTO membership, the rest of the world is focusing on FTA, its biggest interest currently?
Counting on East Asia, North America and Latin America, 50 FTA have been inked or are under negotiations. One thing I can see is that there is an overlap between FTAs and other kinds of cooperation. For example, Japan negotiated an FTA with the ASEAN bloc, but it conducts separate negotiations with Singapore, the Philippines and Thailand as well.
In such a situation, Vietnam only joins the free trade agreements under the frame of ASEAN, while it has not yet signed an FTA with any separate country. Vietnam has reached an investment agreement with Japan, and a bilateral trade agreement with the US. These agreements, however, are not FTAs.
There are clear signs recently that the Government of Vietnam is seeking FTAs with some important partners, and some activities starting the process have been undertaken.
What is your point of view on the issue?
I think that with the limited staff it currently has, it would be very difficult for Vietnam to conduct quality negotiations. In addition, I think there are many ways to reach this goal, and negotiations are not imperative.
Vietnam is now a member of ASEAN, which has a politically and economically important voice in the world arena. As an ASEAN member, Vietnam also joins negotiations with Japan and the Republic of Korea on free trade at the regional level. Vietnam is also striving to join the WTO and making its biggest efforts toward that goal.
As such, I think it is not necessary to concentrate all our forces on FTAs at the moment. If Vietnam successfully opens its markets under the commitments to the WTO there is no need to be concerned about possible negative impacts of FTAs signed by other countries
FTAs have become a trend in the world. What should Vietnam do if it does not follow the moves of other countries?
Vietnam should pay special attention to the development of bilateral relationships, especially with big countries. Investment cooperation with Japan and trade relations with the EU all need to be strengthened. If this is done, the negative impacts caused by worldwide FTAs will be minimised.
Of course, Vietnam has to push up bilateral relationships, for example, by signing the investment agreement with Japan, and the bilateral trade agreement with the US.
One ambitious plan expected to be discussed at APEC Vietnam 2006, is the idea of building a free trade area for APEC as a whole. What are your comments on this?
“Towards a prosperous and harmonious APEC community" is the main topic of this year’s APEC programme. Four issues have been initiated by Vietnam for discussion, including trade liberalisation, development and gap filling, a safe alliance and a more dynamic APEC.
You may know that APEC is a rather flexible mechanism, operating based on the principle of consensus and voluntariness. Every country has its own action plan, and the APEC Secretariat has to take care of many other important matters rather than concentrating on building important cooperation topics.
The matter of building a free trade area for the whole APEC community was once mentioned, however, it turns out to be a very complicated issue. It is really a big challenge for two economies to get an FTA, and it would be a bigger challenge for more than two countries to get a common voice. Nevertheless, trade liberalisation is proving to be the common trend, and all economies must pursue this goal.