Global Trade Operation_ Omgt2321 assignment 1

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)
9

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TABLE OF CONTENT
I. INTRODUCTION.................................................................................................................3
II. ASIAN-PACIFIC ECONOMIC COOPERATION (APEC) ANALYSIS....................3

1. APEC Analysis...................................................................................................................3
a. APEC brief history........................................................................................................3
b. Trade corridors and trade hub in the APEC..............................................................4
c. APEC’s key challenge....................................................................................................5

2. “Vietnam” and “United States” trade flows....................................................................7
III. CONCLUSION..................................................................................................................8
IV. REFERENCES..................................................................................................................9

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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 2 primary parts. Part 1 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

1. APEC Analysis
a. APEC brief history

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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,
1 United States of America (USA), Canada, Japan, South Korea, Australia, New Zealand, Indonesia,
Malaysia, Thailand, Singapore, the Philippines, and Brunei Darussalam.
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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

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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 2 extremes with two opposite attitudes over the Russia-
2 Greater Tuman Initiatives (intergovernmental cooperation mechanism among four countries: China,
Mongolia, Republic of Korea and Russia).
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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 2 extremes will be eliminated. Overall, internal turmoil and division between member-

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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)

2. “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

1 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,

2 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
3 Articles of apparel and clothing accessories 7,883,698 9,598,876
Plastics and articles thereof
Machinery, mechanical appliances,

4 nuclear reactors, boilers; parts 6,372,034 9,044,891

thereof

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Figure 1: The main products exported and imported between Vietnam and United States in 2020
and 2021(TradeMap ITC 2022)

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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
1
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,

2 Cotton 1,164,268 1,030,584 mattress supports, cushions and 11,286,568 14,282,250

similar stuffed furnishings;

Machinery, mechanical appliances,

3 Iron and steel 297,592 621,966 nuclear reactors, boilers; parts 6,991,851 11,136,438

thereof

4 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).

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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

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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,
/>APEC Policy Support Unit (2020) APEC’s Slower Growth, Rising Inflation Pose Risk, Asia-
Pacific Economic Cooperation, accessed 2 December 2022, />releases/2022/apec-s-slower-growth-rising-inflation-pose-risk
Cardenas LC and Buranakanits A (1999) ‘The Role of APEC in the Achievement of Regional
Cooperation in Southeast Asia’, Annual Survey of International & Comparative Law, 5(1),
doi: />Carpenter MA and Dunung SP (2011) “Internationa Business”, Saylor Foundation, Open
Textbook Library, Minneapolis. />
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EDB Singapore (2022) Global connectivity, Singapore Economic Development Board, accessed
29 November 2022, />Government of Canada (2006) Canada’s Asia-Pacific Gateway and Corridor Initiative, Canada
Government, accessed 2 November 2022, />131-2006E.pdf
GTI (2013) Integrated Transport Infrastructure and Cross-border Facilitation Study for The
Trans-GTR Transport Corridors, Regional Summary report, report, accessed 2 November 2022,

/>%E6%96%87%E4%BB%B6%E5%A4%B9/5.%20GTI%20Corridors%20Study%20Regional
%20Summary%20Report_2014_web.pdf
Hutt D (2022) Thailand: Russia-Ukraine tensions spill over to APEC, DW, accessed 31
November 2022, />63807806
Mitsuhashi I (n.d) Vision for the North-East Asia Transportation Corridors, Economic Research
Institute for North-East Asia, accessed 29 November 2022,
/>Panennungi M, Hadi PR, Fitriani E, Tjahjandari L, Surjadi and Wicaksono P (2014) ‘Analysis of
Issues Development in Asia-Pacic Economic Cooperaon’, Asia-Pacic Social Science Review
14(1):1-20, />pacific-economic-cooperati

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Park SH and Lee JY (2009) “ APEC at a Crossroads: Challenges and Opportunities”, Asian
Perspective, 33(2):97-124, doi: />Priaro M (2016) An Integrated Northwest Canada Energy Corridor and Major Pipeline Hub,
Government of Canada, accessed 30 November 2022,
/>21_Brief2fromMikePriaro_e.pdf
Regalado F, Obe M and Phoonphongphiphat A (2022) APEC finds consensus on Pacific free
trade, Ukraine war fallout, Nikkel Asia, accessed 2 December 2022,
/>trade-Ukraine-war-fallout
Reuters (2021) Vietnam to impose 5% export tax on steel billets, cut import tax on some
products, Reuters, accessed 3 December 2022, />tariffs-idUSKBN2EK11Y
Sajid I (2022) APEC leaders divide in their condemnation of Russia's attack on Ukraine,
Anadolu Agency (AA), accessed 2 December 2022, />leaders-divide-in-their-condemnation-of-russias-attack-on-ukraine/2742722
Singapore Ministry of Trade and Industry (2022), Asia-Pacific Economic Cooperation (APEC),
Singapore Ministry of Trade and Industry, accessed 1 December 2022,
/>Cooperation-APEC

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Singapore MPA (2020), Port of Singapore, Maritime and Port Authority of Singapore, accessed

31 November 2022, />Thailand, accessed 31 November 2022,
/>The Japan Times (2022) Most' APEC members condemn war in Ukraine in leaders' statement,
The Japan Times, accessed 2 December 2022,
/>leaders-statement-ukraine-war/
The Nation Thailand (2022) Thailand faces challenge of keeping all sides happy at 2022 APEC
summit, The Nation Thailand, accessed 31 November, />edition/apec/40021653
Trade Map ITC (2022), Export and Import between Vietnam and the United States, Trade Map
ITC, accessed 2 December 2022, />%7c704%7c%7cTOTAL%7c%7c%7c2%7c1%7c1%7c2%7c1%7c1%7c1%7c1%7c1%7c1
Transport Canada (2017) Evaluation of the Asia-Pacific Gateway and Corridor Initiative and the
Gateways and Borders Crossing Fund, Government of Canada, accessed 30 November 2022,
/>crossing-fund

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VietnamPlus (2022) Vietnam’s export to American market sees sharp rebound, VietnamPlus,
accessed 3 December 2022, />sharp-rebound/235392.vnp

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