-[nayer Consultancy Background Briefing:

ABN # 65 648 097 123

APEC Summit: Agenda, Issues,
Role of Vietnam as Chair

Carlyle A. Thayer
October 20,2017

ls , cu knolv, the APEC Summit willtake place in early November in Danang (Vietnam).
.', : reouest your assessment of the following issues:

l1 . ,,our opinions, what are the most important concerns for APEC members this
, ea' at their summit in Da Nang?

l"',S',','ER: The major concernfor most APEC members is how to advance their goal of
a:l e,rng further liberalization of trade and investment ln the Asia-Pacific Region
ihre;;i1 the Free Trade Agreement in Asia and the Pacific (FTAAP) at a time of rising
antr-globalization and protectionism. Allied to this, APEC members will be concerned
to maintain the relevance of their organization at a time of challenges raised by
competing initiatives such as the Regional Comprehensive Economic Partnership and
China's Belt and Road lnitiative as well as President Donald Trump's shift away from
multilateralism to bilateralism in trade.
APEC members need to commit to implementing the Lima Declaration on the FTAAP
by developing multi-year work plans setting out key milestones.

Q2. What are the major challenges for APEC members in terms of trade facilitation,
economic development within the bloc and with outside partners?
ANSWER: The major challenges to trade facilitation and economic development are
protectionist sentiment in countries experiencing low rates of growth and resistance
to new and higher standards such as embodied in the now defunct Trans Pacific
Partnership. These higher standards include emphasis on liberalizing services,
protection for intellectual property rights, greater emphasis on opening up for e-
commerce and digitaltrade and women's empowerment. XiJinping has taken a global
leadership role in supporting globalization while Donald Trump has favored
protectionism through his America First policy.
APEC members need to completely support the World Trade Organization Agreement
on Trade Facilitation to lower costs by improving how the global supply chain
fu nctions and eliminate non-trade barriers.

Q3. Do you think this could be a tough time for the host Vietnam to balance the
relationships among powers who are also APEC members? Why and why not?
ANSWER: Vietnam will use the opportunity as chair for APEC20t7 to host officialvisits
to Hanoi by China's President Xi Jinping and US President Donald Trump. This will not
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::- = sarticularly tough time for Vietnam because there is growing convergence
:::,',:en Beijing and Washington on how to deal with the nuclear threat in North
( :'::and how to settle differences over bilateral trade. Vietnamese diplomacy has
tr,',3.s been adept at playing off differences and convergences in the material
-:=-ests of major powers. As a result both China and the United States will see it is in
:-err interest to support Vietnam's autonomy and role as a positive contributor to
'egionalsecurity.

Q4. ln your opinion, what will be the breakthrough in terms of agenda and discussion
among top leaders at the APEC Summit 2017 this time?
ANSWER:ASEAN Economic Ministers set four major priorities: promoting sustainable,
innovative and inclusive growth, (2) deepening regional economic integration, (3)
strengthening the competitiveness and innovation of micro, small and medium-sized
enterprises in the digital age, and (4) enhanced food security and sustainable
agriculture in response to climate change. Each of these areas has seen intensive in-
depth discussion by work groups prior to the summit. The major breakthrough will be
to secure consensus by APEC members that national reforms and adherence to higher
international standards are necessary to implement these priorities and to set a
putative deadline to work towards full implementation. lndividual countries must
publicly commit themselves to attain these goals.

Q5. What should Vietnam do to maximize the chance as APEC host to push an agenda
that benefits the nation's economic development at this summit?
ANSWER: Vietnam has already put in the necessary effort to push APEC's reform
agenda in the many meetings by working groups, senior officials and ministers already
held. Vietnam will have to exercise proactive leadership to overcome any unexpected
logjams on particular issues. The APEC Economic Ministers have set the necessary
priorities.
Vietnam needs to lobby for financial and other support to advance its own national
development. The best way to achieve this is bilateral meetings on the side and by
hosting separate official visits by key government leaders.

Q6. What should APEC leaders do to enhance the bloc's connection for trade and
economic development?
ANSWER: APEC leaders must reject protectionism and step up the pace of reform by
adopting higher standards designed to facilitate trade at a time of structural reform,
such as services and digital trade. This will not be easy. This means a commitment to
open up economies on the basis of nationalwork plans with putative deadlines.
Q7. Do you have any further comments on APEC and Vietnam.
ANSWER: Vietnam's hosting of the APEC Summit for the second time illustrates the
importance of its longstanding policy of diversifying and multilateralizing its external
relations. Vietnam will be able to showcase its economic development in the modern
city of Da Nang and demonstrate that Vietnam is a strong and positive contributor to
regional and global security. ln turn, Vietnam can solicit further support from APEC's
more advance economies to advance its development goals.
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Q8. The Vice Chairman of China's Central Military Commission Fan Changlong took
part in the Vietnam-China Border Military Exchange Program (September 23-241
following the two nations' agreement to renew the program that has been postponed
in late May. Why did China agree to renew this program with Vietnam at this time?
ANSWER: China's decision to resume the fourth friendly border defence exchange was
influenced by three factors. First, Vietnam suspended oil drilling by Talisman-Vietnam
operating for Repsol of Spain. This eliminated an irritant in bilateral relations and
opened the door for Xi Jinping to make an official visit to Hanoi coincidental with the
APEC summit. Third, China does not want the South China Sea dispute to interfere
with XiJinping's participation at the APEC Summit and ASEAN and related summits to
be held in Manila later in November.

Suggested citation: Carlyle A. Thayer, "APEC Summit: Agenda, lssues, Role of Vietnam
as Chair," Thoyer Consultoncy Bockground Briet', October 20,201-/. All background
briefs are posted on Scribd.com (search for Thayer). To remove yourself from the
mailing list type, UNSUBSCRIBE in the Subject heading and hit the Reply key.

Thayer Consultancy provides political analysis of current regional security issues and
other research support to selected clients. Thayer Consultancy was officially
registered as a small business in Australia in 2002.
 Thayer Consultancy Background Briefing:
ABN # 65 648 097 123
United States: Trump to Attend
APEC Summit, Make Official to
Viet Nam
Carlyle A. Thayer
October 22,2017
We request your assessment of U.S. President Donald Trump's visit to Da Nang for the
APEC Summit and then an official visit to Hanoito meet Vietnam's top leaders.

We request your assessment of the following questions:

Question 1: The White House has announced US President Donald Trump will travel
to Japan, the Republic of Korea, China, Vietnam, the Philippines from November 3-12,
20t1. This will be the first time Mr. Trump has travelled to Asia since taking office.
What does Trump' visit mean to Asia in general and Southeast Asia in particular?
ANSWER: First, Trump Administration officials state that President's Trump visit to
East Asia is broader than just his attendance at two summit meetings. Trump will
provide reassurance to American allies and partners of U.S. support to deal with the
ballistic missile and nuclear threat from North Korea and secondly, counter-terrorism.
Trump's visit to South Korea, Japan and China underlines the importance of non-
proliferation. This is his main priority. Secondly, President Trump wants to convey to
the region that the United States supports key regional multilateral institutions such
as APEC, ASEAN and the East Asia Summit

Question 2: Mr. Trump will participate in the Asia-Pacific Economic Cooperation

(APEC) Economic Leaders' Meeting in Danang, Vietnam. What issues are expected to
be discussed by the US president and the Asia-Pacific leaders?

ANSWER: President Trump will deliver an address to the APEC CEO Forum and stress
that APEC members must reform their domestic economies and adopt higher
international standards, especially in services, e-trade, digitaltrade and protection of
intellectual property rights, if they are to advance the Free Trade in Asia and the Pacific
initiative. Trump will argue that meeting these standards is a prerequisite for any
country wishing to have a Free Trade Agreement with the United States. ln other
words, in terms of economic relations with the United States it is Trump's way or no
way. Note that Trump is re-negotiating the North American Free Trade Agreement and
pressuring South Korea on the KORUS trade agreement.

Question 3: What is your assessment about the meaning of President Trump's official
visit to Hanoi?
to Hanoi is to reaffirm the importance of the
ANSWER: President Trump's official visit
bilateralcomprehensive partnership between the United States and Vietnam and the
 2

growing convergence of strategic interests between the two countries. He will

reaffirm his commitment to Prime Minister Nguyen Xuan Phuc to expand this
pa rtnersh ip.

Question 4: What are the main priorities of the President Trump's official visit to
Hanoi?

ANSWER: President Trump will seek reaffirmation that Vietnam fully supports UN and
US policy on non-proliferation on the Korean peninsula and is committed to
international efforts to defeat international terrorism. Both sides will agree on these
issues in general. President Trump puts great store on economic issues. He will want
to press Vietnam's leaders that they must grant greater access to American companies
but he will also praise Vietnam for its purchase of American aircraft and its willingness
to renegotiate bilateral economic relations.
Question 5: Last May, Vietnam's Prime Minister Nguyen Xuan Phuc paid an officialvisit
to the White House, beginning a series of Washington visits by Southeast Asian leaders
who were seeking to gauge Trump's policies toward the flashpoint South China Sea,
tensions over which have pitted Beijing against its smaller neighbours in the region,
including Vietnam. Will Trump's visit be a good opportunity for Vietnam to strengthen
its bilateral relations with the United States and other partners and mobilize its
neighbours to voice their support for the Arbitration Court's decision on the South
China Sea?

ANSWER: The United States has enlisted the support of Australia in their annual
ministerial meeting (AUSMIN) to call on both China and the Philippines to fully
implement the Award by the Arbitral Tribunal on the South China Sea. The United
States, Japan and Australia, after their trilateral strategic dialogue, made a similar
demand. However, when Prime Minister Phuc and President Trump issued a joint
statement after their meeting, the wording was less direct and forceful. The two
leaders only called for the "full respect for diplomatic and legal processes" and for "all
parties concerned to implement their international legal obligations in good faith" to
resolve their maritime disputes. ln other words, Vietnam chose to support the softer
ASEAN language. This is likely to be repeated when Trump meets Vietnam's leaders.
Both will also call for the expeditious conclusion of a Code of Conduct in the South
China Sea.

Suggested citation: Carlyle A. Thayer, "United States: Trump to Attend APEC Summit,
Make Official to Viet Nam," Thoyer Consultancy Bockground Brief , October 22, 2017.
All background briefs are posted on Scribd.com (search for Thayer). To remove
yourself from the mailing list type, UNSUBSCRIBE in the Subject heading and hit the
Reply key.

Thayer Consultancy provides political analysis of current regional security issues and
other research support to selected clients. Thayer Consultancy was officially
registered as a small business in Australia in 2002.