Vietnam ready for AEC

14:55 | 25/06/2015 Cooperation

(VEN) - The Association of Southeast Asian Nations Economic Community (AEC), which is scheduled for establishment on December 31, 2015, is one of three pillars including politics and security, economics, and culture and society and is aimed to implement the ASEAN Charter and create a common market, a united production chain, free movement of goods, services, investment, capital and skilled labor in order to sharpen the competitive edge, promote common prosperity, and attract external investment of the regional bloc.

Vietnam ready  for AEC

Many Vietnamese goods have been displayed at regional fairs

The startup

AEC membership is considered to be the final step for Vietnam to complete its 20-year regional integration itinerary.

Vietnam has faced a number of difficulties when entering the regional market since countries in the region already have developed economic ties.

However, with the achievements in the last 30 years of renovation, Vietnam has created its own position and strength and has taken strong steps since its membership.

This is visible through the impressive development of the Vietnam-ASEAN bilateral trade relation in the last five years. Two-way trade revenues reached US$26.7 billion in 2010, US$34.5 billion in 2011, US$38 billion in 2012, US$39.8 billion in 2013 and US$42 billion in 2014.

Vietnam’s top three ASEAN trade partners in 2014 were Thailand with revenues of US$10.5 billion, Singapore US$9.8 billion and Malaysia US$8 billion.

Although trade with the Philippines lagged behind them, the country is a major Vietnamese rice importer. Vietnamese rice shipments to the Philippines contributed 22 percent of the country’s total rice exports.

Cambodia is a small market for Vietnam. However, Vietnam’s export surplus with this market is significant. Vietnam sold US$2.5 billion worth of goods to Cambodia in 2014 recording an export surplus of US$1.9 billion. The High-quality Vietnamese Goods Fair under the Vietnamese National Trade Promotion Program is held annually in Phnom Penh, Cambodia. Businesses in Ho Chi Minh City, Tay Ninh, An Giang and Khanh Hoa have maintained trade with Cambodia.

Several Vietnamese products like groundnuts, textiles and garments are also available in Indonesia.

 

Early and intensive investment

By November 2014, Singapore had 1,342 investment projects valued at US$32.7 billion in Vietnam, accounting for 7.7 percent of total projects and 13 percent of total foreign direct investment (FDI) capital and taking third place among the 101 countries and territories investing in Vietnam. Most projects are in processing, manufacturing and real estate. Singapore was one of the first countries to build industrial parks in Vietnam.

Thailand has also quickly invested in Vietnam. With 153 projects and total registered capital of US$1.54 billion, Thailand currently ranks 12th among all 79 countries and territories and third among the ASEAN countries investing in Vietnam. Most projects are in industrial park infrastructure, new urban areas, chemicals, construction materials, and animal feed. Thailand has recently showed their desire to invest in Vietnamese railways.

It is expected that after AEC is established, Vietnam will receive new investment flows from countries with developed industries.

 

Strong workforce and increased jobs

A strong and young workforce will create an advantage for Vietnam after it joins AEC. As a result of intensive investment in training, the number of trained workers has increased from 30 to 40 percent during the last 10 years. Along with foreign investment attraction, Vietnamese workers have garnered international-standard work skills and will meet the increased demand for labor as long as Vietnam and AEC grow together.

 

Trade facilitation

Vietnam first launched e-customs in Hai Phong in 2005 and then expanded it in 19 provinces and cities nationwide. By March 2014, e-customs had been applied officially at 85 percent of customs sub-departments and 96 percent of export and import businesses, allowing them to reduce the customs clearance time and costs.

ASEAN members including Vietnam are working on a structure to coordinate and connect ASEAN and national trade data systems.

 

Active implementation of commitments

Along with building capacity, Vietnam has actively implemented its commitments on the establishment of AEC. According to the latest statistics, ASEAN countries have completed 82 percent of their commitments. Vietnam has been recognized as one of the leaders in implementing commitments, achieving more than 90 percent of its tasks, trailing only Singapore. Vietnam has also reduced 90 percent of its tariff lines to zero percent and will bring tariffs down on the remaining seven percent between now and 2018.

This showed that despite the pision between Vietnam and the older six ASEAN members, the country has overcome difficulties and implemented a high percentage of commitments in order to deeply integrate with the regional and global economy.

As Vietnam’s ASEAN economic integration coordinator, the Ministry of Industry and Trade has worked with related ministries and agencies to implement the AEC Propaganda Program such as organizing workshops in many localities and distributing AEC publications and films among businesses and people.

 

Vietnam will contribute to creating a prosperous AEC, bridging the differences between ASEAN countries via trade and investment liberalization, trade and investment facilitation the application of the Master Plan on ASEAN Connectivity, and other cooperative programs. These are also opportunities for Vietnam to raise its position in ASEAN, create new strengths towards global integration, intensify its voice in the international arena, reach practical agreements, and ensure its national interest.

Nguyen Duy Nghia

Theo ven.vn