PERTH, Australia, Nov. 12 (IPS) – Kyle Springer is a Senior Analyst at the Perth US Asia Center. That year Vietnam was poised to make strides in its rise as a regional leader. Under the auspices of the Vietnamese ASEAN Chairmanship, a breakthrough in world trade was achieved despite increasing protectionism and a global pandemic.
Under the ASEAN chairman’s adoption in January, Vietnamese diplomacy has proven adaptable under the terms of COVID-19. The successful conclusion of the Regional Comprehensive Economic Partnership (RCEP) trade agreement under Vietnamese observation this year will consolidate its claim to the leadership of the middle power in the Indo-Pacific region.
The 2020 ASEAN summit would have been easy to write off, but we have learned to expect a lot from a year under Vietnam’s presidency. Think about what the Vietnamese leadership has done in the past. When Vietnam chaired ASEAN in 2010, it opened the ASEAN Defense Ministers’ Meeting (ADMM) Plus, a defense dialogue between all ten ASEAN members and its eight dialogue partners, including the US and China.
When Vietnam convened the East Asia Summit (EAS) that same year, the United States and Russia attended as Vietnamese guests, paving the way for their official membership in the summit the following year. The ADMM Plus and the EAS are now key institutions in the political architecture of the Indo-Pacific.
And Vietnam’s skilled diplomacy will help again in the crisis year 2020. If Vietnam delivers RCEP during the November Adapted Summit Process, it will be the most significant development in the global trading system since the WTO was founded in 1994.
After eight years in over thirty rounds of negotiations, RCEP pledges to support the economic recovery of its fifteen members after COVID-19. The provisions cover 29 percent of global GDP and promote the further development of regional value chains and significantly reduce regulatory investment barriers.
The Vietnamese leadership of RCEP marks the change to one of the fastest growing and most internationally active economies in the region. Vietnam emerged thirty years ago from a period of war in which it fought every permanent member of the UN Security Council with the exception of the then Soviet Union. Vietnam had isolated itself from its Southeast Asian neighbors when it invaded Cambodia in 1978 and suffered a bloody clash with China on its northern border in 1979.
Economically, things were just as bleak. Post-war reconstruction has done nothing to boost Vietnam’s inflation-hit economy. Five-year economic plans failed to stimulate agricultural growth and production. Trade and relief sanctions have been imposed on it by the US, Australia and many of their other neighbors. In this context, no one could have foreseen the transformation that would take place later.
RCEP is perhaps the culmination of Vietnam’s efforts to integrate into the world economy from the mid-1990s. Due to the Doi Moi (renovation) domestic economic reforms that began in 1986, Vietnam joined ASEAN in 1995 and joined the World Trade Organization in 2007. It eschewed protectionism and began pursuing a number of free trade agreements from 2005.
Today it signed a number of agreements with advanced economies. Vietnam has not only proven to be Attendees in multilateral trade efforts, but as leading proponent regional trade integration. It is a member of the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP) with Australia, New Zealand and Japan. The predecessor of the CPTPP, the Trans-Pacific Partnership (TPP), was made famous by the decision of US President Donald Trump to pull the US out of the deal, after long standing as the cornerstone of the “realignment” of former President Barack Obama in the Asian market. Pacific area had been promoted.
A few months after the US left the agreement, the remaining TPP members met on the sidelines of the 2017 APEC trade ministers meeting hosted by Vietnam, where ministers reaffirmed the value of the TPP and discussed with the 11 original signatories how it could be completed.
Here Vietnam made the decision to stay in the agreement, although market access to its most important trading partner – the USA – was lost. The participation of Vietnam in the CPTPP makes the position of Vietnam clear: It is committed to the liberalization of trade, although the zeitgeist is decidedly protectionist.
RCEP continues Vietnam’s efforts and Vietnam once again provides an important new institution as it chairs in its moment as ASEAN chair. RCEP is also on time. It will put Vietnam and its Indo-Pacific partners in a good place to resolve the economic problems that are putting pressure on the region, not least the aftermath of the COVID-19 pandemic that has hit Southeast Asia particularly hard.
Here, too, it looks like Vietnam is ahead of the game. Given the controlled outbreak domestically, Vietnam’s position in forecasts for economic growth looks promising. Even under the most pessimistic models, the Vietnamese economy should maintain positive growth in 2020.
By the time Vietnam is expected to take over as ASEAN chairman in 2030, its economy will be well on the way to becoming one of the largest in the world. RCEP will receive a lot of recognition for this advancement.
In addition to accelerating post-COVID-19 economic growth in the broader Indo-Pacific region, RCEP will continue to enhance Vietnam’s ability to attract the investments needed to propel its economy in this promising direction.
The challenge for the Vietnamese leadership will be to reconcile its regional ambitions with continued domestic economic reforms.
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