11:07 | 18/11/2015 Cooperation
(VEN) - The formation of the ASEAN Economic Community (AEC) later this year will have a significant impact on Vietnam. For the capital Hanoi, AEC will bring both opportunities and challenges, requiring one of the country’s two largest economic hubs to take the initiative in preparing the best ways to ensure the country benefits from regional integration.
Trade between Hanoi and ASEAN reached US$10 billion in 2014
ASEAN is currently the third largest export market and the second largest import market for Vietnam. The ASEAN market accounts for 20-25 percent of Hanoi’s total imports, export value, and trade between the capital and ASEAN reached US$10 billion in 2014.
When AEC is established, exports from Vietnam and Hanoi in particular to ASEAN will continue to be offered tariff preferences under the ASEAN Trade in Goods Agreement (ATIGA). AEC will accelerate tariff liberalization and the elimination of non-tariff barriers, simplify customs procedures, and apply suitable quarantine regulations to facilitate regional trade. So AEC will help Vietnamese businesses and Hanoi-based companies in particular access a transparent market and business environment, minimize the cost of international transactions, reduce production costs and enhance competitiveness, participate more deeply in regional and global value chains, develop e-commerce, increase market share in ASEAN member countries, and promote exports to ASEAN FTA partners such as China, the Republic of Korea, and Japan.
As an economic, scientific, technological, education and training center of the whole country, Hanoi has advantages to promote the export of hi-tech products and labor, attract more resources for tourism, healthcare, education development and financial market modernization, develop the real estate market, and accelerate economic restructuring and industrialization. To make the most of these opportunities, Hanoi has taken many active measures such as reestablishing the Hanoi Tourism Department, establishing two specialized industrial parks to promote support and information technology industries, and boosting administrative reforms.
However, the establishment of AEC will create stronger competitive pressures that require Hanoi-based businesses to persify their products, build and promote their brands, improve their technologies to reduce production costs, and access common technical standards of the region to overcome increasingly strict technical barriers of AEC member countries and other export markets.
The municipal government, the business community, and people need greater awareness, and unified objectives, policies, and coordination between relevant authorities. It is necessary to maintain websites and hotlines providing updated information about integration; build and popularize the brands of key products; establish new industrial and hi-tech parks to attract high-quality foreign direct investment (FDI); intensify the training of business leaders and technical workers in eight fields that allow free movement of workers between ASEAN countries, and 12 priority fields in AEC.
Notably, Hanoi needs to build some shopping centers in major ASEAN markets; intensify information and communications, and take active measures to prevent risks; give prominence to ensuring the transparency of policies; minimize unfavorable changes in the financial and real estate markets, and take stronger measures to ensure social security and political stability in the capital and the whole country.
Dr. Nguyen Minh Phong