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Vietnam warns of return of protectionism as TPP hopes fade
[HANOI] Vietnam Prime Minister Nguyen Xuan Phuc warned of the risk of returning protectionism as Southeast Asian nations brace for potentially tighter trade controls in the U.S."The world and Asean region are facing big challenges in various areas, including security, finance, climate change and risk of returning protectionism," Phuc said at the Bloomberg Asean Business Summit in Hanoi Thursday, referring to the Association of Southeast Asian Nations. The government will boost efforts to improve the nation's investment climate and increase the number of its companies, he said.
Asian economies face significant risks should President-elect Donald Trump follow through with imposing trade barriers and opposing the Trans-Pacific Partnership - a 12-nation preferential trade agreement that covers about 40 percent of the global economy. Economists have said Vietnam's export-dependent economy would be one of the biggest beneficiaries of TPP.
Vietnam has so far evaded the export collapse that's hurting its neighbors, with shipments abroad rising 10 per cent in the first nine months of this year, according to the World Bank. In contrast, Indonesia's exports shrunk 9 per cent, while in Philippines and Singapore, they were little changed.
That's helping the economy with the World Bank predicting expansion of at least 6 per cent this year through 2018, among the fastest in the world. Growth will reach 6.3 per cent this year, the prime minister said today.
Mr Phuc called on the 10-member Asean, which includes Singapore and Indonesia, to deepen economic ties and build infrastructure to boost trade, investment and services."Each Asean country can't develop if it only relies on exploiting natural resources and using basic labor," the prime minister said. "It needs to improve competitiveness and better participate into global supply chains for higher added value."
As a trading block, this is a sizable population we are talking about," Vivek Pathak, director of East Asia and the Pacific at the International Finance Corporation, said in an interview in Hanoi Wednesday. "If you can get Asean countries to work together in a boundaryless world - free flow of goods, free flow of capital - I think this has got the potential to become very powerful."
Vietnam is seeking more private investment in infrastructure projects, Planning and Investment Minister Nguyen Chi Dung said at the summit. The government will soon issue a law to help small and medium-sized companies, he said.