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CPTPP Serving Vietnam as Opportunities and Challenges

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CPTPP is originated from the Trans-Pacific Strategic Economic Partnership Agreement (TPSEP) (it is also so call P4) signed in 2005 by Singapore, Chile, New Zealand and Brunei. Since September 2008, the United States, Australia, Peru, Vietnam, Malaysia, Canada, Mexico and Japan have jointly negotiated at the aim of setting up the Trans-Pacific Partnership Agreement (TPP). The TPP negotiation process ended in 2015 under the agreement of the 12 member states; however, Trump administration announced its withdrawal from the agreement in January 2017. After a number of adjustments, including postponing the implementation of the 20 TPP provisions with the expectation that the United States would return to the Agreement, the 11 remaining TPP members unanimously continued to promote this process by establishing Comprehensive and Progressive Agreement for Trans-Pacific Partnership -CPTPP). After completely reviewing the content and approved by the member parliaments, estimated by March 2018, CPTPP will officially become a large economic zone in Asia-Pacific with a population of over 460 million, contributing 14% of world GDP and 1/6 of global trade.

The agreement is expected to establish a new common framework for regional free trade arrangement for Asia-Pacific countries, to support trade, to attract foreign investment, and to promote institution reformation in those countries. CPTPP has the basic advantages as the members of the negotiation are the countries that have been strongly committed to the trade liberalization. Given the disclosed commitments, CPTPP is considered as a model treaty for the 21st century because of its overwhelming scale and influence in comparison with other trade agreements regionally and globally.

Given the competitiveness, the economic size and the inadequacies of the current institutional system, it is surprised that Vietnam has strongly participated in CPTPP. Compared with other members, it has the least competitive economy and the loosest legal system. Despite its 20-year-old experience in the process of international economic integration, Vietnam lacks the practices in a highly competitive and demanding integration environment since it is only familiar with first-generation FTAs, where the open commitments and reform pressures are readily accepted in a transitional and distinctive economy.

Meanwhile, CPTPP’s regulations set out in the negotiations are evaluated as far beyond the ability of the current economy of Vietnam. What is the motive of Vietnam to join CPTPP?

Given the economic size of the members and the terms of trade liberalization, joining CPTPP is obviously advantage to empower Vietnamese economy in the Southeast Asia in terms of economic growth, trade as well as FDI attraction. In the economic perspective, Vietnam is a country to achieve the most benefit from the CPTPP.

Firstly, the opportunities to increase the export of goods that are the advantages of Vietnam (i.e. textiles, footwear, electronic products and equipments) are relatively high by combining the tariff reduction and the experiences in these markets.

Secondly, the attraction of foreign investment into Vietnam is greatly promising. The access to large markets such as Japan and Canada together with the clearer commitments to improve the investment environment and protect intellectual property rights will become a significant attraction for international investors. Moreover, Vietnam, under the framework of CPTPP, is able to attract large inflows from the member countries through the membership of regional economic organizations such as AFTA and ACFTA.

Thirdly, the chances of faster economic growth are strongly wide. The expansion of the major export industries such as textiles, footwear, fishery, etc., will help stimulate the income growth from domestic production, thereby support the increase of the overall demand.

Fourthly, Vietnam will have an opportunity to form a more comprehensive economic structure. CPTPP will urge the domestic investors as well as the regional ones to invest in the supporting industries to create local material resources given the extremely high standards on the place of origin.

Fifthly, it is a chance to complete the institutions that govern the market economy. CPTPP sets out a clear legal framework for not accepting concessions to any business. Because of its high and foreseen requirements on policy transparency, compared to many other agreements, CPTPP could become one of the important premises for Vietnam to carry out institutional and market reforms thoroughly and comprehensively.

However, among the countries participating in CPTPP, Vietnam achieves the lowest level of development and faces big challenges.

Firstly, the production industry structure is not consistent with the provisions of CPTPP. The economy is not well-prepared and the supporting industry is weak. With regard to the requirements of origin, the sectors which are the advantages of Vietnam’s export sector are not able to exploit the concessions from the CPTPP because their inputs do not contain domestic factors.

The second challenge is from the stagnation of the enterprise system. The adaptability to the market economy of Vietnamese enterprises is weak. The lack of an effective investment strategy for the supporting production industry and “traditional outsourcing” works have made the overall benefit of the economy declined.

Thirdly, the limitation of state enterprises’ role in the national economy becomes a content of CPTPP. The external pressure is positive only if it meets the community benefits. If the selection of CPTPP is purely commercial-economic aspect, it will not cause the objection against the reformation within the SOE system.

The fourth challenge is from the increasing competition of goods from the members of CPTPP. At present, Vietnamese enterprises are well-protected by the high tariffs. The trend and demand for zero tariff reduction will be applied to CPTPP members in the coming time. In the analysis of the export structure of CPTPP countries, it can be seen that the manufacturing industries of Vietnam facing difficulty are automobile industry and agriculture, especially the husbandry which remains mall and fragmented, and unable to compete against the large, experienced and traditional competitors.

The fifth challenge from the requirements of intellectual property protection in CPTPP is much more critical. The continuing possibility of “appearing to court” by infringing intellectual property law is present in countries previously without adequate preparation of intellectual property law. Furthermore, the requirements for increasing the level of protection of intellectual property rights over inventions, copyrights, and trade marks can lead to the escalation of drug prices and create a health burden to the emerging economy like Vietnam. More than that, the measures to protect intellectual property related to biology also affect agriculture which accounts for more than 60% of the population of Vietnam. The prices of agricultural products such as veterinary drugs, fertilizer, etc. will thereby grow significantly, which increases costs and reduces the efficiency of agricultural production in general.

In regard of the need for economic reform and the promotion of economic growth, the process of further integration into the world economy is not allowed to slow down. The question is what Vietnam needs to do to facilitate the upcoming integration roadmap.

Firstly, administrative reform and severely corruption offence are the most important things. It is shown that the WTO supports free market economy so that it could operate and develop only in a healthy competitive environment. Since the joining in the WTO, Vietnamese economy has not really created a healthy competitive environment. Meanwhile, corruption has created more conditions for interest groups to ramp up and distort even the good national policies. If the administrative procedures remain cumbersome and troublesome, corruption will still restrain the required transparency in corporate management. In accordance, CPTPP is not an opportunity, but a challenge to the whole system.

Secondly, the reformation of the legal environment and policies to ensure a single “standard” prescribed by CPTPP is a difficult for Vietnam. But in the long run, this reform of the institutional environment towards the international “rules” is a necessary condition for growth in the context of globalization. In this perspective, although adjusting the policy system involving the regulation of CPTPP is a difficult and costly process, Vietnam’s commitments can be seen as an external “push” to provide additional momentum for domestic efforts towards a transparent institutional environment and economic growth.

Thirdly, it is needed to organize the perfect communication to all classes of people, especially the business and the production circles in the countryside. The participation in CPTPP without fast updating to the farmers might cause the loss of market, the high pressure of competition, and even the legal disadvantage in disputes and sues.

Fourthly, the reform of SOE and the development of SMEs is the key solution. Given the population and economic growth, the number of enterprises in Vietnam is relatively low. This is a major constraint in economic development, employment, creation of competitive markets and the mobilization of resources from society.

In the context of limited resources and high demands of work, the development of these types of enterprise is appropriate not only to the internal capacity but also the preferences of CPTPP. Hence, it is essential to reform SOEs in a substantial way and enable them to have a transparent business environment.

Assoc.Prof.Dr.BuiThanh Nam, University of Social Sciences and Humanities, Vietnam National University, Hanoi

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Southeast Asia

An alarming surge in illegal wildlife trade in Southeast Asia

Avirat Parekh

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With a recent purge by American social media giant Facebook on advertisements for the illicit sale of animals in Yangon, Myanmar, the discourse around such trade has resurfaced. To add more specifically sported a picture of a caged cat and described it as “Not too wild, not too-well behaved. If interested, call…” which is alarming for the platform as it has a strict ban on the sale of animals. According to a report by an international non-governmental organization World Wide Fund for Nature Illegal Wildlife Trade occurs across the Southeast Asian region from the remote corners of Myanmar and Laos, to markets in Bangkok and Hanoi, but its center of gravity is the Golden Triangle, where Thailand, Myanmar, Lao PDR, China meet. Thereby, categorizing the region as a major hub for trade of this nature. The region is a biodiversity hotspot that sits at the heart of wildlife trade. Although, such trade is carried out for specific purposes the scale of trade in the region is quite large. A report published by TRAFFIC, which is another leading non-governmental organization involved in the wildlife monitoring network further categorizes the scale to include the following: Over 96,000 Kg of Pangolin scales seized in Malaysia, Singapore and Vietnam, Over 225,000 Kg of African ivory seized from almost all ASEAN nations, Over 2,200 tigers seized, More than 3,800 bear equivalents sized in ASEAN nations, Over 4,500 African rhino horns most linked to ASEAN nations, 1,100 Helmeted Hornbill parts seized in Indonesia, Over 45,000 live birds seized in Indonesia, Up to 1,189 otters observed for sale online in 4 ASEAN nations, Over 100,000 pig nosed turtles seized in Indonesia. This expanse not only threatens wildlife in the region but also endangers species far beyond the region’s borders, making it a major cause of concern for the international community.

Therefore, the 10 Association of Southeast Asian Nations (ASEAN) members namely Indonesia, Thailand, Malaysia, Singapore, Philippines, Vietnam, Brunei, Cambodia, Myanmar and Laos function as a source, consumer and as entrepôts for wildlife coming into the region and this trade is globally connected to feeding a demand for exotic wild animals, parts and products for use as luxury goods, traditional medicine ingredients and the billion-dollar live animal trade. There are also adequate loopholes in the legislation systems in the region considering there is a policy gap in understanding the difference in trade volumes of both legal and illegal trade brackets. To further understand the volume of wildlife trade in the region, it is critical to look at a case by case analysis of nations in the region.

Indonesia is home to 1,531 species of birds,515 species of mammals,270 species of amphibians and 35 species of primates thereby making it a biodiversity hotspot also due its vast rainforest cover. However, with hectares of land being destroyed the new landscape is prone to deforestation and hence endangers wildlife. The Sumatran tiger is crucial case study of how this deforestation makes it easier for poachers to track them as their use is eminent in various traditional Chinese ornaments and medication. The illegal Pangolin trade has nearly halved the population since the 90’s as the markets have been creating adequate demand and thereby incentivizing poachers. The Orangutan and Gibbon numbers have been declining due to their increased vulnerability to poachers due to reduced forest cover. The government of Indonesia blames this situation on lack of funding for wildlife preservation efforts but what’s required is a bolder legislative front considering activities like bird-keeping are social activities in the nation. It is estimated that in an average year as many as 614,180 native songbirds were trapped and traded nationally throughout Java and Sumatra. This is a significant number when considering that even species listed as ‘least concern’ host populations of less than 3,000 individuals. The government has even joined hands with social media giants like Facebook and Instagram to zero down on illicit online trade of wildlife, to be able to ensure strict surveillance on the same. While the Indonesian government is improving the enforcement of the wildlife trade ban and while seizures of illegally trafficked animals are increasing, better monitoring and research of existing threatened species populations will help ensure better protection of Indonesia’s wildlife and hence impact the global network of illicit wildlife trade. Another key region of trade and transit for illicit wildlife is the Golden Triangle region. According to a special report by WWF on ‘the top ten most wanted endangered species’ tigers, elephants, bears, pangolin are most widely traded in the region where Thailand, Myanmar and Laos connect. While, rhinos, serow, helmeted hornbill, gaur, leopards and turtles are openly sold in the region that is the basis of the widespread illicit wildlife trade network in the Southeast Asian region. Tigers that are poached from all over Asia end up on dinner tables, in medicines, wine or as luxury ornaments, elephant skin and ivory also generate a lot of demand from global buyers. The report also enumerates how ‘African rhinos are being poached at the rate of three per day to feed the demand for their horns in places such as Vietnam, where it is mostly consumed as a symbol of wealth, as well as for traditional medicine. It supposedly cures hangovers and fevers, but rhino horn is in fact made from the same material as human nails, with no medicinal value. A more recent trend in rhino horn jewelry and carved horns is also threatening rhinos.’

This multibillion-dollar trade is severely damaging the biodiversity of not only the region but the world and has caused global initiatives to curb and eliminate illegal wildlife trade. However, the easiest way for facilitating such transactions has become online due to the loopholes being exploited by crime syndicates in governmental legislation. The region which also just witnessed Bakri Eid celebrations boasts of a significant surge in the illicit trade of animals which in nations like Malaysia and Indonesia that are predominantly Islamic becomes a big cause for concern. Furthermore, amidst the global pandemic what’s noteworthy is how this trade of unmonitored trade of animals becomes a breeding ground for animally transmitted viruses like the novel coronavirus, which traces its origin to a live animal market in Wuhan, China.

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Asia’s New Geopolitics- Book Review

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In Asia’s New Geopolitics: Essays on Reshaping the Indo-Pacific, Michael R. Auslin presents a series of essays touching on major security issues in the Indo-Pacific region. Altogether, these essays form a comprehensive overview of the current geopolitical situation in the region from a U.S. perspective, providing ample recommendations for how the U.S. might balance against China. Although the volume’s broad scope is commendable, the essays within suffer from a handful of major weaknesses: one is a failure to consistently address and pinpoint China’s motivations in the region. Yet another is a failure to address the interests and incentives of malleable or unaligned powers in the region, and how these incentives might move a country to either balance against or bandwagon with China. The book also focuses primarily on historical context, with its one predictive essay, “The Sino-American Littoral War of 2025: A Future History,” saved for the very end, serving as the volume’s weakest point.

The book’s strengths in the form of strategic recommendations make themselves apparent in the first section, “Asia’s Mediterranean Strategy”. In this section, Michael R. Auslin correctly addresses a short-sighted focus on a single sub-region at a time as a weakness of U.S. Indo-Pacfic strategy, arguing for an approach that considers the region as a whole. This point is also reiterated in the book’s penultimate essay, “The Question of American Strategy in the Indo-Pacific.” The book’s second essay, “The New China Rules”, likewise addresses U.S. concerns over growing Chinese influence in the Indo-Pacific and beyond, pointing to China’s economic, military, and cultural statecraft. However, it is also in this section in which Auslin’s book begins to display its weaknesses. In this section, Auslin refers to China as a dominant global power. However, most of the specific geopolitical issues addressed in this essay entail regional (rather than global) concerns on China’s behalf, while the global influence Auslin addresses displays itself mostly in cultural forms. Some of this is explicit, such as the establishment of Confucius Institutes, while some of this is implicit, such as Hollywood’s choice to remove imagery and plots that might be offensive to the Chinese government from the films it produces.

One of the more interesting and convincing essays in the book, though one not without its own flaws, is “Can Kim Jong-Un Control His Nukes? Nuclear Safety, Accident, and the Specter of North Korea’s Atomic Arsenal.” In this essay, Auslin provides a fresh take, arguing that a nuclear accident is a much more likely threat from North Korea’s arms program than the oft-discussed topic of nuclear escalation. Auslin convincingly addresses a trust gap among North Korean officials in proffering up this argument. However, this essay also fails to consider whether North Korea would remain a regional threat should the country denuclearize, particularly given incidents of cyberattacks such as the 2014 Sony hack that the U.S. and its allies have attributed to North Korea. Auslin here also fails to consider whether North Korea’s conventional weapons would remain a regional threat in the event of denuclearization.

“Japan’s Eightfold Fence” perhaps serves as the most admirably interdisciplinary essay in the book, addressing Japan’s cultural foundations through a lens of historiography founded on modernization theory, integrating these approaches with a broad discussion of how Japanese national identity inflects contemporary Japanese internal politics. Auslin then uses this analysis of Japanese cultural history to describe the formation of the country’s strong nationalist tradition and the influence of this tradition on Japan’s foreign policy. In addressing these issues, Auslin provides an intriguing, if controversial, defense of a perceived Japanese cultural conservatism. The essay also leads in perfectly to the one that immediately follows it, “China Versus Japan”, which details the lengthy history behind (and projected long-term continuation of) the Sino-Japanese regional rivalry.

Perhaps the most out-of-place essay in the book is “India’s Missing Women”, the only essay in the book that focuses principally on South Asia rather than Northeast Asia. Additionally, it is also the only chapter in the book that focuses on small “p” politics issues of gender, identity, and human rights rather than broader diplomatic and military strategy. While an intriguing and insightful read, the reader can not shake the view that this essay belongs in a different book entirely.

The weakest portion of the book is undoubtedly its concluding essay, “The Sino-American Littoral War of 2025: A Future History.” This essay provides a relatively trite prediction involving current tensions escalating into a full-scale war between China and the U.S. A more compelling argument might have involved a list or qualitative probability analysis of competing scenarios, rather than simply retreading already common territory, with fairly little originality. The final essay in effect serves to highlight Auslin’s strengths at historical and cultural arguments in the previous essays, in contrast to a somewhat weak analysis that plays only with fairly safe and conventional ideas. At the very least, this essay could take more risks by making less conventional predictions about the future of the U.S.-China rivalry. Aside from this issue, however, the book’s overview of conflicts and rivalries in Northeast Asia – and how the U.S. might seek to work within this playing field – remains generally interesting and commendable.

Michael R. Auslin generally provides a reasonable argument for a broader, more comprehensive Indo-Pacific strategy on behalf of the U.S. As a starting point, Auslin makes the agreeable suggestion of focusing less on sub-regions and specific issues and instead maintaining a broad view of the Indo-Pacific. However, the essays never quite make a consistent argument for China’s motivations in the region. The essays also assume, implicitly, that most states in the region would benefit principally from bandwagoning with the U.S. and balancing against China, while failing to consider what economic, political, military, or cultural incentives might motivate a state to bandwagon with China. Similarly, the essay on “India’s Missing Women” feels like an interesting, if unnecessary detour. Lastly, the essays in the book maintain their principal strength in historical analysis. However, the book’s one predictive essay effectively reveals this strength in contrast to the author’s weakness in providing insightful long-term or long-shot regional forecasts.

info: Asia’s New Geopolitics: Essays on Reshaping the Indo-Pacific by Michael R. Auslin, Hoover Institution Press, Stanford, USA, 2020, 244p.

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Countering Chinese String of Pearls, India’s ‘Double Fish Hook’ Strategy

Prof. Pankaj Jha

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India and Indonesia held their defence dialogue between the defence ministers on July 27, 2020 and discussed issues related to defence cooperation, promoting investment in each other’s defence enterprises and helping each other in extending logistical support. This meeting was held in person, instead of online meeting.

 India has started engaging its eastern Indian Ocean neighbours particularly Indonesia, Australia, and island nations in the Southern Indian Ocean region such as Mauritius, Seychelles, Madagascar, and French territories spread across the Indian Ocean. India’s entry into Indian Ocean Commission (an intergovernmental group of island nations- Madagascar, Mauritius, Comoros, Reunion islands, and Seychelles, dealing with maritime governance) as observer was facilitated by France. India and France have started conducting of regular maritime surveillance sorties from Reunion islands. This shows that India is keen on developing strategic and defence ties with France in the Indian Ocean region. This also hints to the fact that Indian navy has been working on ‘double fish hook’ strategy.

This ‘Fish Hook’ strategy of India is expected to complement the fish hook strategy undertaken by the US along with its allies in the Pacific Ocean. Media reports also state that China has floated many surveillance pods in South China Sea to monitor movements of US and its allies’ ships and submarines. With the upgradation of the Andaman and Nicobar Islands and an investment of more than US $ 6.67 million which has been allocated during Prime Minister Modi visit to the islands, shows that India have larger designs with regard to these islands. This includes developing jetties, deep sea harbour and extending landing strips to facilitate landing of maritime surveillance aircrafts. There is also proposal of developing hangers for stationing of Sukhoi-30MKI aircrafts on a permanent basis.

In the past also when India was upgrading the facility in late 1980s it was seen as a launching pad erstwhile Soviet Union to make inroads into the Indian Ocean, and there were apprehensions raised by countries such as Indonesia and Australia. At that point of time the Andaman and Nicobar island group was stated to be known as Fortress Andaman(FORTRAN).Andaman Nicobar Command (ANC) was developed at Port Blair in 2001 as first integrated joint command centre. India again is exploring this possibility of upgrading the facilities in Andaman and Nicobar Islands so as to project its power in the Bay of Bengal and Closer to The Malacca Straits.

China’s ‘String of Pearls’ strategy has developed a concept that India has been surrounded by Chinese developed ports (Gwadar, Hambantota and Chittagong) developed in connivance with the ruling regimes in Pakistan, Sri Lanka, and Bangladesh. The ‘String of Pearls’ has gained lot of academic mileage in the international discourse related to the Indian Ocean security. As a countermeasure, India started engaging its littoral partners which includes the formidable navies in the region including US, France and Australia- all strategic partners of India. With US India has already engaged through the LEMOA agreement giving access to each other’s military bases and naval ports.

In June 2020, India has signed the Mutual Logistics Support Agreement (MLSA) with Australia which will provide support for maritime reconnaissance missions undertaken by the two countries with the use of their island facilities. The islands which have been listed for such a logistics arrangement is Andaman and Nicobar Islands(India) and Coco(Keeling) islands of Australia. Australia has been upgrading its facilities in the Coco Islands and also trying to upgraded facilities in Darwin and Keynes. This kind of complimentary logistics support agreement would enhance surveillance and reconnaissance activities of the two countries. Apart from Australia, India has also signed a port development project with Indonesia and has agreed to developed civilian and military facilities in the Sabang port which is located at the northern tip of Aceh archipelago. This acts as the first fish hook strategy spanning across the eastern Indian Ocean starting from Andaman and Nicobar Islands, Sabang port(Indonesia) and thereafter extending all the way to Coco(Keeling) Islands, the tip of this fish hook lands at the DiegoGarcia, the US military base in Chagos archipelago.

Similarly, the western fishhook strategy starts from Duqm port in Oman where India has entered into Maritime Transport Agreement and has gained access facility for Indian navy. India has also been working with regard to entering an agreement with the Djibouti so as to avail the logistic support in the Horn of Africa. Further engagements with Mauritius, Seychelles and Madagascar through training and visiting of the ships as well as giving them coastal radar systems, and few fast attack crafts shows that India is keen on anchoring its naval security through these engagements.

France has been very keen on developing maritime linkages with India and also undertaking fortnightly sorties through maritime surveillance aircraft such as P– 8 I Poseidon. The surveillance sorties have started in January 2020 and likely to continue in regular intervals along with France. France has acknowledged the fact that in order to secure its territories in the Indian Ocean region it has to build confidence and interoperability with the Indian Navy. Therefore if one draws a line connecting the ports  then it would look like a fish hook which again will land in the end at Diego Garcia.

The strategy which is known as ‘double fish hook’ strategy would help India in countering Chinese activities undertaken by unmanned submersibles and also know the activities of Chinese submarines in the Indian Ocean region. China has increased deployment of its personnel at its Djibouti base, and has been enhancing its presence in the Indian Ocean region. The reclamation of one of the Maldivian islands-Feydhoo  Finolhu Island, which is nearly 600 km from Indian coast, shows that China is willing to take risks so as protect its energy supply lines and maritime commerce. In fact, its Maritime Silk Road strategy would depend much on Chinese military heft in the region and also its dominance in the strategic waters of the Indian Ocean.

India has also understood the importance of blocking Chinese maritime traffic in case the border issue aggravates to the point of a war. During the 1971 war with Pakistan which led to the emergence of Bangladesh, the role of the Indian Navy has been appreciated in blocking the Karachi port, and also helping in protecting the Bangladesh from any external intervention.

This double fishhook strategy would depend much on development of the facilities in the Andaman and Nicobar Islands which includes developing airports in the Northern reaches of this island group, increasing the maritime traffic as well as developing docking facilities for naval ships. The chief of defence staff has already alluded to the fact that it will be a joint command of the three services and also it will be a rendezvous point for the Quad forces. In one of the RAND studies titled ‘Overseas Basing of US Military Forces’ it was stated that Andaman and Nicobar Islands can be a very good operating base for US drones as it would give edge in case of operations against China. The development of this double fish hook strategy would undermine String of Pearls and would give India an edge in case of tensions between the two countries in the maritime domain. This in every variably will mean that Chinese inroads into Indian Ocean will be noticed and countered by the Indian navy with Quad countries before it can change maritime power configuration in the Indian Ocean region.

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