Passage through regional East-West corridor limited

14:32 | 14/09/2017 Economy- Society

(VEN) - While the Greater Mekong Sub-region (GMS) Cross Border Transport Facilitation Agreement (GMS-CBTA) and the one stop customs policy have boosted economic development along the East West Economic Corridor (EWEC), import and export activities, especially those in Vietnam’s central coastal city of Da Nang, which is the end point of the corridor, remain below expectations.

passage through regional east west corridor limited
Da Nang Port, an important point on the East West Economic Corridor

Da Nang has almost 30 businesses trading with EWEC countries, with related trade exchange totaling US$64.3 million in 2016, which accounted for only 2.73 percent of the city’s import and export value (US$2.394 billion) in the same year. Thailand has become Da Nang’s biggest EWEC trade partner, followed by Laos. In 2016, the city imported goods worth US$32 million and exported goods worth only US$2.6 million to Thailand, while the city’s trade with Laos reached US$28 million, mostly in exports.

Although Da Nang’s Tien Sa Port has a high capacity, the quantity of cargo carried from EWEC sources to Da Nang accounted for only three percent of all cargo transported along the 1,450km- corridor. Nguyen Huu Sia, director of the Da Nang Port, said policy is the biggest barrier. Despite the one-stop customs policy at the Lao Bao-Dansavan border crossing, cargo is still verified twice there, causing importers and exporters to waste time and incur higher costs.

Nguyen Ha Bac, deputy director of the Da Nang Department of Industry and Trade, said infrastructure along the EWEC remains inconsistent, many roads going through Vietnam are narrow, and services along the route need to be diversified and improved.

Experts have said close cooperation between GMS governments is important to ensure serious, consistent and effective implementation of commitments and promote EWEC economic development. It is also important for EWEC countries to seriously implement the one-stop customs policy at border crossings, accept each other’s cargo verification results, cooperate with each other to facilitate trade and transportation, and identify strengths of specific localities located along the corridor, based on which to develop a plan for efficiently promoting cross-border trade.

While a legal framework for cross-border trade (CBT) will soon be completed, infrastructure along EWEC 1 and EWEC 2 routes also requires improvement, commitments by ASEAN Economic Community (AEC) countries must be promoted, and border customs clearance procedures must be simplified through the use of information technology. Connectivity between cargo and transport associations must be promoted, while trading and production enterprises should take the initiative in researching their strengths to find comparable partners and make full use of opportunities offered by the EWEC.

The 1,450km East West Economic Corridor (EWEC), traversing 13 cities and provinces of Vietnam, Laos, Thailand and Myanmar, was established in 2006 to promote economic development and integration among these four Greater Mekong Sub-region (GMS) countries.

Vu Le & Xuan Hoai