You have the following requirements to fulfill. By Week 4, you will choose a regional economic integration (REI) from the following list (click hereLinks to an external site.). If by the end of Week 4 you have not chosen one, your lecturer will choose one for you. Analyse the REIs general characteristics, including: Very brief history (when it was created, why was it created it, and who are the current members). Description on the most important trade corridor(s) and most important trade hub(s) in the REI. One key challenge currently faced by the REI. Choose what we will denominate your country, i.e., any country (except Vietnam) which is currently a member of your REI, and you will identify the main commodities or products traded between your country and Vietnam Utilize at least one figure or table in your report to summarize and illustrate any key finding(s).
ASSESSMENT 1: APEC STUDY Subject Code OMGT2321 Subject Name GLOBAL TRADE OPERATIONS Location and Campus Assignment Title SGS Campus Type of Assignment Individual Essay Individual (20%) Lecturer Group Duy DK 04 Wordcount 1300 (excluding cover page, table of Pages content, figures, references) TABLE OF CONTENT I INTRODUCTION .3 II ASIAN-PACIFIC ECONOMIC COOPERATION (APEC) ANALYSIS APEC Analysis a APEC brief history b Trade corridors and trade hub in the APEC c APEC’s key challenge “Vietnam” and “United States” trade flows III CONCLUSION IV REFERENCES I INTRODUCTION In globalization era, many Regional economic integrations (REIs) are paid attention to born to enable member countries to experience minimal trade barriers and leverage economic interdependence to promote sustainable economic development and regional security (Carpenter & Dunung 2011) Consistent with this goal, The Asian-Pacific Economic Cooperation (APEC) was established to facilitate trade flows between nations in Asian-Pacific region The motivation for APEC analysis was the interest in discovering and presenting thrilling characteristics of the APEC's role and trade flow connected to the Asian continent and the Pacific region The paper is structured in primary parts Part is APEC analysis, including brief history, important trade corridor and hubs in APEC, and current challenge APEC is facing The second will identify trade flows between United States (APEC’s member) and Vietnam II ASIAN-PACIFIC ECONOMIC COOPERATION (APEC) ANALYSIS APEC Analysis a APEC brief history Asia-Pacific Economic Cooperation (APEC) was officially established in 1989 in Canberra, Australia by 12 founders1, and became a non-binding and voluntary forum where member nations could discuss free trade, investment, and economic cooperation issues along the Pacific Rim (Panennungi et al 2014) Since its establishment, APEC currently is run by 21 member-economies, including Australia; Brunei Darussalam; Canada; Chile; People's Republic of China; Hong Kong, China; Indonesia; Japan; Republic of Korea; Malaysia; Mexico; New Zealand; Papua New Guinea; Peru; The Philippines; The Russian Federation; Singapore; Chinese Taipei; Thailand; United States and Vietnam (APEC 2021) APEC was established to help member-economies encourage sustainable economic growth, regional security, trade & investment, and shared prosperity in Asia-Pacific region (APEC 2021) To achieve APEC Bogor Goals, APEC opens multilateral trade regimes, reduces tariffs and other trade impediments for trade and investment facilitation, provides a non- bureaucracy trading environment in the region (Cardenas & Buranakanits 1999) Member- economies benefits free trade through signing bilateral and multilateral FTAs b Trade corridors and trade hub in the APEC b.1.Trade hub Singapore is one of the most dynamic trading hubs in APEC bloc It is the gateway of Asia and rest of the world, strategically located at the heart of Asia and at the crossroads of main artery trade lines, between the Indian Ocean, the Pacific Ocean, and the Strait of Malacca Hence, United States of America (USA), Canada, Japan, South Korea, Australia, New Zealand, Indonesia, Malaysia, Thailand, Singapore, the Philippines, and Brunei Darussalam Singapore is in the center of important trade flows from Europe, the United States, the Middle East, Australia, and Asia, solidifying its position as a global trading hub with over 30% of Asia- Pacific's trade passing through Singapore (Singapore EDB 2022) More than 75% of the APEC member economies' trade flow has to go through Singapore, and Singapore ports serve and deliver approximately 73.57% of the exports from the APEC countries (Singapore Ministry of Trade and Industry 2022) The Port of Singapore is the busiest container transshipment hub, with more than 200 international shipping lines passing through and 140,000 vessels stopping annually (Singapore MPA 2020) As a premier Global Hub Port, Singapore ports can offer connectivity to 600 ports in 123 countries, consequently, Singapore can opportunely connect people and goods trade flow for APEC’s economies from Asia-Pacific to Americas, EU-Asia, Indian Ocean region-Southern Asia b.2.Trade Corridors “The Asia–Pacific Gateway and Corridor” (APGC) is a system of transportation infrastructure, including British Columbia Lower Mainland and Prince Rupert ports, connecting principal road rail network across Western Canada to the economic heartlands of North America, key border crossing and Canadian airports (Government-of Canada 2006) This corridor system is managed by Canadian government This corridor includes Vancouver BC port as a shared Gateway of flows of people and goods among North-America, Canada (Western APEC- members) and APEC Asia economies such as China (Shanghai port), South Korea (Busan port) and Japan (Tokyo) (Transport Canada 2017) Furthermore, Asia-Pacific region can also connect to North American region through Prince Rupert port because it connected Eastern Canada terminal to the North American Midwest through its “coast-to-coast-to-coast” rail network (Priaro 2016) “Dalian Corridor” is the important corridor system between Russia and China, which managed by China and Russia (GTI2 2013) The corridor system reaches primary cities in China and Russia, begins from the gateway_Dalian port in Liaoning Province (China) to Heihe (Heilongjiang), then, to transport China's goods to Russia territory, transhipment route connects through Blagoveshchensk BCP in Russia (Amur) to the Siberian Land Bridge (SLB) or Trans- Siberian Railway, as well as MoscowVladivostok Highway at Belogorsk (Northern Russia) to reach Russia’s centers (Mitsuhashi n.d) c APEC’s key challenge Matt Murray, a U.S senior official for APEC acknowledged that APEC GDP growth dropped to 3.2% in 2022, compared to 2021-year of the pandemic (5.8%) due to supply chain disruptions, supply-demand imbalances, inflationary pressure, financial risks, and food and energy insecurity caused by Russia-Ukraine war (APEC Policy Support Unit 2022) Besides, APEC is struggling with a more serious threat, which is the awakening of "Cold wars", “internal turmoil”, and “internal separation in economies and relationships” among APEC members, because of their opinion dissidence over the Ukraine conflict (Sajid 2022) APEC leaders currently are divided into extremes with two opposite attitudes over the Russia- Greater Tuman Initiatives (intergovernmental cooperation mechanism among four countries: China, Mongolia, Republic of Korea and Russia) Ukraine conflict Russia is a key APEC member but is being strongly denounced and sanctioned by the “most” advanced APEC nations such as the US, Australia, Canada, Japan, Singapore, and New Zealand for invading Ukraine (The Nation Thailand 2022) United States and most Asia- Pacific members condemned Russia's aggression causing immense human suffering and exacerbating the existing fragilities in the global economy (TheJapanTimes 2022) On the other hand, other APEC fellows like China, and Mexico have rejected calls to publicly condemn Russia over its invasion of Ukraine, and have refused to join to put pressure and international sanctions against Moscow (The Nation Thailand 2022) So, the “Cold war” emerged between United States & its allies and Russia & China As a result, APEC faces a high extent of regional cooperation collapse resulting from sharp disagreement and crisis of relationship rupture among members regarding their views and purposes over Russia-Ukraina war (Park & Lee 2009) The climax of the confrontation is when representatives from Canada, New Zealand, Japan, and Australia joined their US counterparts in walking out while Russian Economy Minister Maxim Reshetnikov was delivering remarks at APEC Ministers Responsible for Trade meeting in Thailand (21-22/2022) (The Nation Thailand 2022) Due to serious conflicts and a lack of consensus among all 21 APEC members, Thailand as the host is unable to issue a final joint statement for a clear direction of future regional economic sustainable development in summit 2022 Member economies' disagreements over sanctions on Russia initiate the growing internal separation, and many previously signed FTAs between extremes will be eliminated Overall, internal turmoil and division between member- economies will destroy precious benefits of the APEC’s economic-promoting cooperation, causing hardship to smaller economies that are highly dependent FTAs and regional cooperation’s trade preferences from powers, as well as confronting future regional economic uncertainties and fallout The challenge of Thailand (APEC summit host 2022) is to balance a neutral stance in the bloc, rebuilding a regional intimate relationship (Regalado,Obe & Phoonphongphiphat 2022) However, failing to win Vladimir Putin's attendance at the APEC summit, and the resilience of some leaders put tension and sanctions on Russia, stressed Thailand’s mission (Hutt 2022) “Vietnam” and “United States” trade flows MAIN TRADING GOODS TRADED FROM VIETNAM TO UNITED STATES (VN-US) YEAR 2020 2021 2020 2021 TRADE EXPORT TRADE TRADE IMPORT TRADE VALUE VALUE VALUE VALUE (USD (USD (USD thousand) thousand) thousand) (USD thousand) 4,978,932 Electrical machinery and equipment Electrical machinery and equipment 1,173,375 and parts thereof; sound recorders 26,239,966 32,718,523 and parts thereof; sound recorders 4,985,701 816,8 and reproducers, television and reproducers, television 806,997 Furniture; bedding, mattresses, mattress supports, cushions and 8,467,866 10,074,020 Cotton 1,324,045 505,329 similar stuffed furnishings; Residues and waste from food 833,282 industries Articles of apparel and clothing accessories 7,883,698 9,598,876 Plastics and articles thereof Machinery, mechanical appliances, nuclear reactors, boilers; parts 6,372,034 9,044,891 thereof Figure 1: The main products exported and imported between Vietnam and United States in 2020 and 2021(TradeMap ITC 2022) The top products exported and imported between Vietnam and its important partner United MAIN GOODS TRADED FROM UNITED STATES TO VIETNAM (US-VN) YEAR 2020 2021 2020 2021 EXPORT TRADE TRADE IMPORT TRADE TRADE VALUE VALUE VALUE (USD VALUE (USD (USD (USD thousand) thousand) thousand) thousand) Electrical machinery and equipment 2,074,538 1,998,079 Electrical machinery and equipment 27,550,847 36,291,962 and parts thereof; sound recorders and parts thereof; sound recorders and reproducers, television and reproducers, television Furniture; bedding, mattresses, Cotton 1,164,268 1,030,584 mattress supports, cushions and 11,286,568 14,282,250 similar stuffed furnishings; Machinery, mechanical appliances, Iron and steel 297,592 621,966 nuclear reactors, boilers; parts 6,991,851 11,136,438 thereof Plastics and articles thereof 544,442 578,95 Articles of apparel and clothing accessories, 7,417,517 9,138,970 States are unchanged in both 2020 and 2021 Vietnam's major export items to the US were electrical machinery, equipment, and parts with $26,2B, (up 46%); furniture and bedding ($8,47B); apparel and clothing accessories ($7,88B) and machinery, mechanical appliances ($6,37B) (Figure 1) Obviously, exports from Vietnam to U.S recorded robust growth thanks to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and U.S’s market reopen (CPTPP) (VietnamPlus 2022) The main imported products of Vietnam from U.S include electrical machinery & equipment ($4,985B), cotton ($1,3B), residues and waste from food ($505M), and plastics ($833M) (Figure 1) 10 Figure 2: The main products exported and imported between United States and Vietnam in 2020 and 2021(TradeMap ICT 2022) The top export categories of the United States to Vietnam are electrical machinery and equipment ($2.1B), cotton ($1.2B), plastics ($544M), and iron & steel ($297M) (Figure 2) Due to the Covid-19 pandemic, world clothing significantly decreased, cutting the demand for cotton to make items of clothing Thus, their export of cotton lessened in 2021 The export of electrical machinery and equipment also decreased because of the decline in Vietnam’s demand While exports of iron & steel to Vietnam rose because the Vietnamese government reduced 5-10% import tax on some steel and iron products in order to lower the price of construction steel (Reuters 2021) The top import includes electrical machinery & equipment, furniture, mechanical appliances, apparel, and clothing accessories, and obviously, the U.S experienced an increase in imports (Figure 2) III CONCLUSION APEC was established with 21 official member-economies, facilitating stronger trade flow in region by reducing trade barriers, support sustainable economic growth and prosperity in the Asia-Pacific region Furthermore, Singapore is one of the important trading hubs and maritime centers in APEC region with strategically located in the heart of Asia conveniently connecting Europe, the United States, the Middle East, Australia, and Asia In APEC, Asia–Pacific Gateway and Corridor, and Dalian corridor are important transportation corridor systems, which facilitates 11 people and commodities flows effortlessly move across member-nations in various continents Due to Russia and Ukraine war (2022), APEC is facing economic uncertainties and fallout, as well as internal turmoil and division within APEC bloc over sanctions on Russia’s aggression among member-economies United States has strongly intimate bilateral trade relationship with Vietnam, signing together many FTAs to stronger their trading facilitation VN mainly exports to U.S electrical machinery & equipment, furniture and clothing while primarily import electrical machinery, cotton, food waste The main U.S item exported are machinery, cotton, iron and steel, while encourage import of clothing, electrical machinery IV REFERENCES APEC (2021) About APEC, Asia-Pacific Economic Cooperation, accessed 28 November 2022, 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