AEC drives towards 2015

08:33 | 25/08/2014 Cooperation

(VEN) - The Association of Southeast Asian Nations (ASEAN) is in its very important period of time with its goal to establish an ASEAN Economic Community (AEC) by 2015 and an action plan for future years, according to a workshop recently held in Hanoi by the Ministry of Industry and Trade in association with the Economic Research Institute for ASEAN and East Asia (ERIA) to share experiences and initiatives to make the most of opportunities and advantages of the AEC.

ERIA Managing Director Professor Hidetoshi Nishimura said that Vietnamese businesses had advantages in terms of human resources and geographical position. For this reason, they should deeply and widely integrate into the AEC and make it a major engine for economic development.

Regarding ASEAN’s plan until 2015 and beyond, ASEAN General Secretary Le Luong Minh said that there was still much to do. First is to continue terminating tariff barriers following an itinerary. Second is to reform to make ASEAN an attractive investment region. Third is to bridge the pision between ASEAN-4 (Indonesia, Malaysia, the Philippines and Thailand) and ASEAN-6  (Indonesia, Malaysia, the Philippines, Thailand, Singapore and Vietnam) among the 10 member countries. After 2015, ASEAN will continue its drive towards improving the bloc’s economy in terms of law, institutions, response to regional issues, global economic growth and climate change.

After 2015, the Regional Comprehensive Economic Partnership Agreement (RCEP) will take effect driving towards a larger economic community including economic cooperation between the 10 ASEAN countries and six partners – India, the Republic of Korea, Japan, New Zealand, Australia and China. This requires the countries including Vietnam to draw up an action plan right now.

The AEC will become a tariff-free market with 10 ASEAN member countries, more than 600 million people and almost US$3 trillion in gross domestic product (GDP). No more tariff barriers or zero percent tariffs are considered to be the AEC’s biggest benefit which will stimulate exports, attract investment and boost economic growth. Statistics from the Ministry of Industry and Trade’s Export and Import Department showed that the progressive reduction of tariffs had significantly changed the trade balance between Vietnam and ASEAN. Vietnamese exports to and imports from ASEAN countries reached US$13.5 billion and US$20.9 billion in 2011 and US$18.4 billion and US$21.3 billion in 2013, respectively showing that the pision between Vietnamese exports and imports has reduced as a result of increased exports. Two-way trade reached US$20.45 billion in the first half of this year, an increase of 3.6 percent from a year ago.

However, experts reminded businesses of the need to specify the point of origin of their products which acts as an emerging barrier for businesses as ASEAN goods must show their point of origin to receive preferences. For this reason, businesses need to apply an appropriate adaptation itinerary.

By joining the AEC, goods, capital, services, investment and people will cross borders freely without discrimination between domestic and foreign resources. The AEC (or other agreements) is considered as an impetus for Vietnam to positively change. A large number of new legal documents, decrees and resolutions have been issued forcing the whole economy to run under a new mechanism.

Deputy Minister of Industry and Trade and Leader of the Governmental Team on International Integration Negotiation Tran Quoc Khanh said that after the AEC is established, the Vietnamese economy including the production sector would face bigger opportunities and challenges. After economic borders among the AEC countries are removed and goods, services and capital run freely within ASEAN, any ASEAN business or investor will have the same opportunities to make the most of the common market for the 10 ASEAN countries.

However, to best prepare for the AEC, Tran Quoc Khanh underlined the need to focus on market research and capacity building to be able to join regional production chains and develop comparative advantages./.

By Thu Hang