Can Vietnam adapt to a resurgence of trade protectionism?

10:45 | 08/03/2017 Economy- Society

(VEN) - 2017 will possibly mark a milestone in the development process of the global economy as protectionism has shown signs of resurgence and may hinder free trade. Vietnam needs to adapt itself to these changing circumstances in order to affirm its competitiveness and integration capability, especially in major playing fields of the global economy.  

Minister of Industry and Trade Tran Tuan Anh

Many economists are worried about the impact of protectionism on the Vietnamese economy that depends heavily on foreign direct investment, which could decrease after the US’ withdrawal from the Trans Pacific Partnership (TPP) trade deal.

At economic forums which took place recently in Vietnam and abroad, Prime Minister Nguyen Xuan Phuc and Deputy Prime Minister Pham Binh Minh affirmed that Vietnam participated in the TPP and other free trade agreements (FTAs) to deepen its integration into the global economy. Its TPP membership was also designed to improve its legal system and market-oriented economic institutions in order to create a new impulse for development and contribute to regional economic linkages. Vietnam will continue its renovation efforts to effectively implement its FTA commitments.

On February 6, 2017, the Vietnamese government issued Resolution 19-2017/NQ-CP promoting the implementation of major tasks and solutions to improve the business environment and enhance national competitiveness in 2017, with an orientation towards 2020. Vietnam also continues to improve its business climate in order to reach the average level of ASEAN 4 and stand among the top 70 countries in the world in terms of the ease of business startups.

Economists believe there is room for Vietnam to integrate more deeply into the global economy. In the opinion of Ton That Thong, a Vietnamese German, Vietnam should balance its trade with China and pay greater attention to the European market. Although Europe has common regulations for 28 EU countries, Vietnamese goods are offered free access to each specific market. Therefore, Vietnam should promote exports to European countries to prevent adverse impacts of global market changes on its foreign trade activities, Thong said.

According to Dr. Nguyen Dinh Cung, Director of the Central Institute for Economic Management, foreign invested and private companies account for a mere 11 or 12 percent of Vietnamese companies doing business with European partners. Increasing this percentage through reforming economic institutions will help enhance the competitiveness of the Vietnamese economy.

Minister of Industry and Trade Tran Tuan Anh:

The Ministry of Industry and Trade (MoIT) will continue its efforts to improve the legal environment and business climate to

help businesses make the most of development resources. Through regular trade promotion activities, the ministry is helping

businesses promote exports to new potential markets such as India, Africa, and the Middle East, while at the same time

strengthening their position in traditional markets, such as China, the US, Japan, the EU, and ASEAN.

The MoIT is coordinating with other ministries and sectors to boost economic restructuring and change the growth model to

enhance the effectiveness of investment and increase the added value of products. These efforts will help Vietnam achieve

sustainable export growth.

Quang Loc