VietNam Business: free trade

Showing posts with label free trade. Show all posts

Monday, January 31, 2011

Vietnam starts FTA talks with Russia, Belarus, Kazakhstan

HCMC - The first working session of the research team to support a free trade agreement (FTA) between Vietnam and a customs union grouping Russia, Belarus and Kazakhstan started on Monday in Hanoi, said a top official.

The session, which was convened after 10 months of researching efforts, yielded one document on assignments for the team in the coming time and a draft platform to study impacts of the FTA on the countries, said Dang Hoang Hai, who led the Vietnamese team to the session.

On the part of the visitors, the customs union research team was led by E.E Mairova, vice director general of the Department for Trade Negotiations under Russia’s Ministry of Economic Development, and joined by economic officials of the three countries, said Hai, who is director general of the Europe Market under Vietnam’s Ministry of Industry and Trade.

“They are not yet FTA negotiations but (such documents are) important to do next steps to hasten the progress,” Hai told the Daily via the phone on Monday, adding that the next discussion is expected to start in December 2010 in Moscow. The FTA negotiations only start when an agreement between the leaders of the countries is reached.

Hai said that he had no idea about what sectors would be discussed because the progress is still limited to the feasibility study. Meanwhile, according to Vietnam News Agency, the FTA negotiations are expected to discuss tariff barriers, services and investment, and intellectual property.

Hai added that the potential free trade agreement would be the first FTA for Russia.

“Russia has decided to start its first-ever FTA with Vietnam because the South East Asian country is its strategic partner. In addition, Russia wants to increase its presence in Asia as well as ASEAN,” Hai explained.

The FTA is expected to boost trade between the countries. Among them, Vietnam can increase exports of farm products, seafood, and garments to Russia, while the latter can spur exports of fertilizers, gas, nuclear energy, vehicles and heavy industry products.

In an official visit by Prime Minister Nguyen Tan Dung to the Russia in December 2009, the two countries’ leaders made an agreement on starting feasibility studies for the free trade agreement between Vietnam and the customs union.

It is forecasted that two-way trade between Vietnam and Russia will gain nearly US$3 billion this year and touch the target of US$10 billion in the future.

Vietnam has up to now signed some FTAs, including membership in the ASEAN free trade area, as well as FTAs between ASEAN and China, Japan, Korea, India, Australia and New Zealand.

Friday, January 28, 2011

Viet Nam, Russia, Kazakhstan and Belarus plan free trade agreement

HA NOI — The first meeting of a working group to prepare a free-trade agreement between Viet Nam and Russia, Belarus and Kazakhstan was held here yesterday.

The agreement is expected to bring benefits to an area covering 20 million square kilometres, with a population of 253 million people and a GDP of US$1,505 billion.

The head of the Vietnamese delegation, Dang Hoang Hai, Deputy Director General of the European Department of the Ministry of Industry and Trade, said the group would focus on the terms of references.

"These must cover the impacts of the agreement, including difficulties and challenges during negotiations as well as specific tasks for each member of the working group," said Hai.

"It will take time for members to conduct research and collect data before coming up with their impact assessment," continued Hai.

He expressed confidence that the agreement would bring benefits to Viet Nam and the Russian Federation, particularly in the fields of customs duties, investment services, business and trade.

It is forecast two-way trade will reach $10 billion in the years following the signing of the agreement.

Viet Nam's main exports to the Russian Federation are agricultural products. In turn, it imports fertilisers, oil, gas, energy, heavy industry products and a utomobiles.

The Alliance of Customs from Russia, Belarus and Kazarkhstan is led by Ms E E Mairova, Deputy Director of the Department for Trade Negotiation at the Russian Economics Ministry. — VNS

Sunday, January 16, 2011

Japan mulls Asia-Pacific free trade talks

TOKYO - Japan is considering joining negotiations for a free trade partnership among Asia-Pacific nations in a bid to bolster its ailing economy, the foreign minister said Thursday.

Foreign Minister Seiji Maehara said the Trans-Pacific Partnership (TPP) concept, including Japan's key ally United States, may help boost Japan's efforts to conclude free trade deals to increase exports.

"The Trans-Pacific Partnership Agreement stands as our promising framework for economic integration in the Asia-Pacific region," Maehara said in an address to a Japan-US business conference in Tokyo.

"I'm fully committed to making the greatest possible efforts to promote Japan's (free trade agreement) and (economic partnership agreement) policies, including looking into Japan's participation in TPP negotiations," he said.

Washington has said it would enter TPP talks, viewing such a deal as a means to advance US economic interests with fast-growing Asia.

Australia, Brunei, Chile, New Zealand, Malaysia, Peru, Singapore, and Vietnam have also said they will join the talks.

Japan has lagged behind other Asian countries -- such as South Korea which Wednesday agreed a pact with the European Union -- in sealing free trade deals.

Former Japanese prime minister Yukio Hatoyama proposed building an East Asian community similar to the EU through economic integration, but the idea evaporated after his resignation in May.

Maehara, who has argued for a stronger Japan-US security alliance, welcomed further American involvement in Asia through forums such as the Asia-Pacific Economic Cooperation (APEC), which Japan hosts this year.

"I believe the active engagement of the United States in this region is an indispensable element for the peace and prosperity in the region," he said.

"I'm greatly encouraged by these signs of increased US commitment to the region," Maehara said.

Thursday, January 13, 2011

EU, Malaysia kick off free trade talks

European Commission President Jose Manuel Barroso (R) greets Malaysia's Prime Minister Mohd Najib Abdul Razak prior to a meeting at the Royal Palace in Brussels during the Asia-Europe Meeting (ASEM).

Photo: AFP

BRUSSELS - Malaysia and the European Union kicked off free trade talks Tuesday in a move aimed at increasing a two-way trade that currently accounts for around 10 percent of Malaysian imports and exports.

The launch of negotiations was announced on the sidelines of the Asia-Europe Meeting (ASEM) attended by 46 nations representing 60 percent of world trade and almost 60 percent of the world's populations.

Malaysian Prime Minister Mohd Najib Abdul Razak and European Commission president Jose Manuel Barroso jointly announced the formal commencement of the talks, with Malaysia proposing a first round be held this year.

The free trade agreement will focus on market access for goods and services, investment, trade facilitation and economic cooperation.

The European Union on Wednesday signs a free trade deal with South Korea, described as its most ambitious yet, and Japan called for increased momentum in its bid for a similar deal during the two-day ASEM summit.

Tuesday, January 11, 2011

EU, Vietnam say to start talks on free-trade pact soon

European Commission President Jose Manuel Barroso (R) shakes hands with Vietnam's Prime Minister Nguyen Tan Dung before their meeting at the EU Commission headquarters in Brussels on Monday - Photo: Reuters

BRUSSELS - The European Union and Vietnam will start negotiations on a free trade pact soon, EU and Vietnamese leaders said on Monday, fuelling Vietnamese hopes of being recognized by the EU as a free market economy.

Vietnamese Prime Minister Nguyen Tan Dung said free trade talks should also lead to an end to contentious EU import duties on Vietnamese-made shoes and greater access for Vietnam to the EU’s consumer markets under the EU’s Generalized System of Preferences for developing states.

“With the result obtained on Tuesday, the recognition by the European Union of Vietnam as a market economy ... will be agreed soon,” the Prime Minister told journalists after a meeting with Jose Manuel Barroso, President of the EU’s executive Commission.

The EU and Vietnam will launch free trade talks “as soon as possible”, Barroso said.

The two leaders met on the first day of a two-day summit of EU and Asian heads of state, which will address global financial governance issues, IMF voting rights, security issues, climate change and international trade.

Since talks for a global trade accord stalled at the World Trade Organization in 2006, the European Union has pursued bilateral trade accords, notably with Asian trading powers.

The bloc will this week sign its first bilateral free trade pact -- with South Korea -- and hopes to seal a deal with India this year.

With efforts frustrated for a regional trade accord with the ten-state Association of Southeast Asian Nations, the EU is considering individual pacts with Vietnam, Singapore and Malaysia.

Sunday, December 12, 2010

China sees Vietnam as gateway to free-trade ASEAN

Chinese officials at a meeting in HCMC on Friday to discuss trade ties - Photo: Thu Nguyet

HCMC – Many Chinese enterprises are keen on Vietnam’s market, considering it as a gateway to enter ASEAN now that a free trade agreement between China and the block is already in place, a Chinese official said in HCMC on Friday

“The free trade area between ASEAN and China has officially been created. Chinese businesses are discovering more and more opportunities to co-operate with Vietnam,” said Deputy Secretary-General of China-ASEAN Business Council Xu Ningning.

“In the first eight months of this year, about 40 conferences have been held in China to help Chinese enterprises go into the ASEAN free trade area… All Chinese enterprises joining the conferences showed keen interest in Vietnam and wanted to invest into the country,” he added.

He explained that as Vietnam and other ASEAN countries had set up a free trade area with almost all goods traded tax-free tax, while Chinese products exported to these markets now did not enjoy such incentives, so “Chinese enterprises consider Vietnam as a gateway to other markets.”

Xu said he is encouraging Chinese enterprises to heighten cooperation with Vietnamese partners via joint ventures, adding Vietnamese businesses should also make the most of the ASEAN-China FTA to boost trade to China.

Xu and leaders of Zhuhai, a city on the southern coast of Guangdong Province, together with 35 enterprises in the city had a meeting with HCMC businesses last Friday to enhance trade ties.

According to Chen Hong Hui, vice mayor of the city, Chinese companies want to boost export of equipment, electric devices, textile and garment and household devices to Vietnam. Meanwhile, they want to buy more farm products and natural minerals from the country.

Data provided by Chinese officials at the meeting show two-way trade between Vietnam and China has increased 6.5 times in the period of 2001-2009. The two-way trade increased 46.3% year-on-year to US$17.8 billion in the January-August period, and is expected to hit US$25 billion this year.

Monday, December 6, 2010

Vietnam gains most from S.Korea free trade pact: officials

Vietnam gains most from S.Korea free trade pact: officials Vietnam has benefited more than other Southeast Asian countries who have signed free trade agreements with South Korea, say Korean trade officials.

Dug Gyou Bok, deputy director of Korea Trade-Investment Promotion Agency (Kotra)’s Asia and Oceania Team, said Vietnam has used the agreement to boost exports and lure more foreign direct investment from Korea.

Bok said Vietnam’s exports increased 32.5 percent in the first seven months of 2010 while average export growth in ASEAN members was about 24 percent during the same period. The country’s exports to South Korea grew 16.3 percent in 2009, he added.

The agreement between Korea and ASEAN members took effect for goods in 2007 and services and investment last year. ASEAN, as the Association of Southeast Asian Nations is often known, comprises ten countries: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

Korea eliminated 70 percent tariffs in 2007 and completed its committed tariff reductions early this year for the ten members, while Vietnam aims to complete its commitments by reducing tariffs from the current 7 to 20 percent to between 5 and zero percent by 2018. This reduction will be effected on half of tariff lines by 2015.

Bok said the multilateral agreement has brought opportunities for Vietnam to export more telephone set parts and wood chips, products that have also brought in investments from Korea.

Kotra said Vietnam’s export to Korea in the sectors grew respectively by 98.6 and 600 percent from January to July this year while that of traditional goods like seafood, shoes and agricultural products increased stably.

Korean electronic giant Samsung has exported US$1 billion worth of products so far from its $670 million mobile phone factory that it opened last September in the northern province of Bac Ninh.

However, the two-way trade was in favor of Korea, according to Kotra. South Korean exports to Vietnam increased 35.2 percent to $5.12 billion in the first seven months of this year, more than three times higher than its imports from the country during the same period.

Yon-Jip Jung, deputy general director for Free Trade Agreement Policy under the South Korean Ministry of Foreign Affairs and Trade, said Vietnam was one of the Korea’s best partners in the Southeast Asian bloc, and it wanted to further boost bilateral trade and investment ties.

Jung said the ministry planned to promote the agreement to boost trade and investment in both countries and would explore respective advantages as the countries completed negotiations on a bilateral free trade agreement.

Both sides will focus on goods that bring more benefits in bilateral than multilateral pact of which many members have different interests and goals.

Vietnam gains most from S.Korea free trade pact: officials

Bok said the multilateral agreement has brought opportunities for Vietnam to export more telephone set parts and wood chips, products that have also brought in investments from Korea.

Korean electronic giant Samsung has exported US$1 billion worth of products so far from its $670 million mobile phone factory that it opened last September in the northern province of Bac Ninh.

Both sides will focus on goods that bring more benefits in bilateral than multilateral pact of which many members have different interests and goals.

Friday, December 3, 2010

European free trade deal lifts bilateral trade

The negotiations and signing of the Free Trade Agreement (FTA) between Vietnam and the European Free Trade Association (EFTA) are a foundation for enhancing bilateral trade ties, said a seminar in the central coastal city of Nha Trang Thursday.

The seminar on the FTA between Vietnam and EFTA, “Negotiation possibilities and prospects for trade ties”, drew more than 40 delegates from Vietnam businesses, State management agencies and policymakers and representatives from Norwegian and Swiss embassies in Hanoi .

Vietnam – an emerging economy with a considerable improvement in infrastructure and political stability – has an annual average GDP growth of 7-8 percent.

Vietnam ’s consumption is predicted to post a 10 percent increase each year and to triple the current figure by 2025.

The trade relationship between Vietnam and the four EFTA members – Switzerland , Norway , Iceland and Liechtenstein – has recorded progress.

Vietnam is expected to export goods worth around US$2.3 billion to Switzerland and import goods worth around $559 million from the country.

First Secretary of the Norwegian embassy in Vietnam Thea Ottmann said that EFTA countries have a total population of 13 million people but achieve a GDP of nearly $1 trillion per year and EFTA is the third-largest partner of the European Union.

EFTA has signed free trade agreements with 31 nations and territories in seafood, pharmaceuticals, machinery, service and other sectors, she said.

Vietnam is a potential partner of EFTA, said Thea Ottmann, noting that both sides have established a joint group to study the feasibility of setting up the FTA and the content of negotiations.

Vice President of the Vietnam Garment and Textiles Association Le Van Dao said that Vietnam ’s garment and textiles sector posted export revenues of 9.2 billion USD last year, contributing 15 percent of the country’s GDP and more than 17 percent of the nation’s total export revenues.

The signing of the FTA with EFTA would facilitate Vietnam ’s garment and textiles exports as EFTA connects with the EU, the major market of the sector, he said.

Thursday, December 2, 2010

European free trade deal lifts bilateral trade

The negotiations and signing of the Free Trade Agreement (FTA) between
Vietnam and the European Free Trade Association (EFTA) are a foundation
for enhancing bilateral trade ties, said a seminar in the central
coastal city of Nha Trang on Sept. 23.

The
seminar on the FTA between Vietnam and EFTA, “Negotiation
possibilities and prospects for trade ties”, drew more than 40 delegates
from Vietnam businesses, State management agencies and policymakers
and representatives from Norwegian and Swiss embassies in Hanoi .

Vietnam – an emerging economy with a considerable improvement
in infrastructure and political stability – has an annual average GDP
growth of 7-8 percent.

Vietnam ’s consumption is predicted to post a 10 percent increase each year and to triple the current figure by 2025.

The trade relationship between Vietnam and the four EFTA members –
Switzerland , Norway , Iceland and Liechtenstein – has
recorded progress.

Vietnam is expected to
export goods worth around 2.3 billion USD to Switzerland and import
goods worth around 559 million USD from the country.

First Secretary of the Norwegian embassy in Vietnam Thea Ottmann said
that EFTA countries have a total population of 13 million people but
achieve a GDP of nearly 1 trillion USD per year and EFTA is the
third-largest partner of the European Union.

EFTA has signed free trade agreements with 31 nations and territories in
seafood, pharmaceuticals, machinery, service and other sectors, she
said.

Vietnam is a potential partner of
EFTA, said Thea Ottmann, noting that both sides have established a joint
group to study the feasibility of setting up the FTA and the content of
negotiations.

Vice President of the Vietnam
Garment and Textiles Association Le Van Dao said that Vietnam ’s
garment and textiles sector posted export revenues of 9.2 billion USD
last year, contributing 15 percent of the country’s GDP and more than 17
percent of the nation’s total export revenues.

The signing of the FTA with EFTA would facilitate Vietnam ’s garment
and textiles exports as EFTA connects with the EU, the major market of
the sector, he said./.

Thursday, November 18, 2010

VN to discuss free trade with Russia

MOSCOW — Viet Nam and the member nations of the Customs Union (Russia, Belarus and Kazakhstan) have agreed to begin negotiations on a bilateral free trade agreement.

The first meeting of the joint working group for the Viet Nam-Russia FTA will be held in Ha Noi next month.

Consensus on the issue was reached at the 14th meeting of the Viet Nam-Russia Inter-government Committee for Economic, Commercial, Scientific and Technological Co-operation, which convened in Moscow on Tuesday and ended yesterday.

Minister of Industry and Trade Vu Huy Hoang and his Russian counterpart Viktor Khrristenko co-chaired the meeting.

The two sides focused on ways to step up co-operation on the economy, commerce, science and technology and trade.

Both sides noted that economic and trade relations had seen significant progress since the 12th meeting. Bilateral trade reached a decade-high of almost US$1.83 billion in 2009, which included $415 million in Vietnamese exports.

However, the officials said economic and trade ties remained modest.

The Vietnamese delegation affirmed its desire to co-operate more closely with Russia on energy, with top priority being given to oil and gas and construction of power plants and coal mining.

Other fields that need to receive a boost include mechanical engineering, automobile assembly, trade, finance, banking, education, training, agriculture, science, technology, telecoms, aviation, sports, culture, tourism and space research.

Both Hoang and Khrristenko affirmed the two governments' support for companies wishing to explore business and investment opportunities.

The two sides agreed to hold the next meeting in Viet Nam in 2011. — VNS

Wednesday, November 17, 2010

Tariff increase violates free trade agreement

The Vietnam Association of Seafood Exporters and Producers (VASEP) has
confirmed that the US Department of Commerce (DOC) increase in its
antidumping tariff on Vietnam’s tra (Pangasius) fish runs counter to the
letter and spirit of the free trade agreements between Vietnam and the
US.

In an open letter sent to the Vietnamese
Government and the US Ambassador in Vietnam on Sept. 16, VASEP expressed
indignation and concern over DOC’s preliminary antidumping duty rates
in the sixth administrative review applied to Vietnam’s tra frozen
fillets exported to the US.

The duty rates are
in excess of 100 percent, far exceeding any prior rates in this unfair
dumping case lasting more than eight years, and clearly amounting to a
punitive tariff on Vietnamese fish fillet exports, said the association.

According to VASEP, the calculated dumping rates cannot be supported by the evidence and data submitted for this review.

VASEP expressed its particular concern at DOC’s unjustified change in
the surrogate country used to value raw material inputs, sudden
switching from Bangladesh to the Philippines after consistently
rejecting the Philippines in all prior administrative reviews due to the
poor quality of the pricing data, the lack of publicly available data,
the extremely small size of the Philippine catfish industry, and the
fact that the Philippines has not exported products of this fish
species.

VASEP said it believed the results are
politically motivated, coming after significant recent lobbying efforts
by the Catfish Farmers of America (CFA).

VASEP
and individual fish processors/exporters requested the Vietnamese
Government undertake a comprehensive review of the harmful impacts of
DOC’s determination and urge DOC and the administration of the US
to carefully reassess this decision, not allowing it to have a bad
influence on the well-developing bilateral relations between the two
nations.

At a press briefing in Hanoi on Sept.
17, VASEP Vice President Nguyen Huu Dung said the association and
Vietnam’s tra fish businesses will protect the industry by taking
essential legal action to request DOC to change the results of the sixth
administrative review which are expected to be issued in March 2011 in
accordance with the US law and the WTO agreement.

VASEP and businesses are striving to complete practical data on tra
fish prices and evidence proving Vietnam did not dump its tra fish in
the US market in order to send this information to the US next
month.

Both sides are expected to discuss the issue at a meeting slated for November this year.

VASEP has also sent two of the biggest tra fish exporters – Vinh Hoan
and Hung Vuong – to the US to meet US lawyers for consultation on
this disputed determination.

According to VASEP,
Vietnam’s tra fish export value is estimated at 1 billion
USD in the first nine months of the year and 1.5 billion USD for the
whole year, with the US being the second biggest tra fish consumer,
after the EU./.

Friday, November 5, 2010

Vietnam gains big from free trade, report says

Vietnam makes short-term gains in regional trade deals and braces for the other shoe to fall

A farmer collects latex at a rubber plantation in Vietnam’s central highlands. Rubber is among key export products that have potential gains from trade liberation.

Vietnam’s economy has benefited greatly from the free trade agreements it has signed over the past 24 years, according to a report issued last week.

The nation has successfully pursued a policy of market price liberation, better exchange rate management, and private competition with state-owned enterprises, said a report authored by the Europe-Vietnam Mutrap III, a multinational trade assistance project. The authors also lauded Vietnam’s modernization of its financial system and implementation of tax reforms.

The report said that Vietnam has witnessed rapid economic growth, trade and investment expansion, and substantial poverty alleviation.

Manufacturers of footwear, leather, seafood, textiles, produce, rubber and coffee were optimistic about their potential gains from trade liberation, the authors reported after interviewing representatives from these various industries.

The report added that representatives from other domestic firms (i.e. auto, paper and pulp) were wary of the changes but resigned to facing increased competition from abroad.

Vietnam completed free trade agreements with its ASEAN partners in 2003 and with Japan in 2008. The country also signed ASEAN agreements with China, India, Japan, South Korea, Australia and New Zealand.

ASEAN, as the Association of Southeast Asian Nations is often known, comprises ten countries: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

A shot in the arm

Le Quang Lan, deputy director general of the Ministry of Industry and Trade’s Multilateral Trade Policy Department, said local businesses have enjoyed immediate gains from the regional trade deals.

The South Korean and Japanese governments cut import tariffs for products imported from ASEAN right away. Since then, Lan said, Vietnamese businesses have paid tariffs of less than 5 percent on goods sold in those developed markets.

More than 70 percent of Vietnam’s export products have benefited from the low tariffs since 2007, boosting the country’s export to Korea. On average, about 50 percent of businesses in ASEAN countries enjoy the low tax in Korea, said Lan.

In the agreements between China and ASEAN, 25 percent of Vietnamese businesses benefited, he said.

Vo Tri Thanh, deputy director of the Central Institute for Economic Management, said the agreements have improved the competitiveness of local firms and attracted foreign investors.

He added that the agreements have also improved skills and salaries among the domestic workforce, especially in the management and engineering sectors.

According to Thanh, the average salary for a Vietnamese CEO working for a multinational firm is VND400 million per month while the salary for state-owned company heads topped out at VND50 million.

Last year, Vietnam’s total exports were valued at US$56.73 billion, a drop of 9.5 percent year-on-year due to the global economic downturn.

Its partners in the agreements contributed a majority to the country’s export value last year. For example, the ASEAN market imported $8.5 billion worth of Vietnamese products, compared to $6.2 billion in Japan, $4.8 billion in China, and $2.5 billion in Korea.

The partners were also suppliers of Vietnamese businesses, with China topping the list followed by ASEAN members, Japan and Korea.

You scratch my back...

Lan, from the Trade Policy Department, said that Vietnam will fulfill its commitments to cutting import tariffs on products from its Asian trade partners over the next decade.

Vietnam aims to shave 3 to 4 percent off the current 12 percent tariffs on consumer products, garments, wooden furniture and steel, said Lan.

The country continues to protect agricultural products like sugar, eggs and tobacco, and industries like petrol, rubber, automotive products, he said.

Businesses should prepare for the cuts, Lan said, adding they should also be aware of governments that cut back tariffs only to raise technical barriers and quality requirements on imports to their markets.

He claimed that Vietnamese trade negotiators did not pay enough attention to those barriers.

James Cassing, a professor at the University of Pittsburgh, said the effectiveness of the free trade agreements did not only depend on import tariff cuts.

If tough technical barriers are raised to protect domestic industries then the agreements mean nothing to partner businesses, he said.

The professor warned that the barriers will become increasingly common in export markets. Vietnam is in the process of negotiating agreements with the European Union and Chile.

Thursday, November 4, 2010

Vietnam gains big from free trade, report says

Vietnam makes short-term gains in regional trade deals and braces for the other shoe to fall

A farmer collects latex at a rubber plantation in Vietnam’s central highlands. Rubber is among key export products that have potential gains from trade liberation.

Vietnam’s economy has benefited greatly from the free trade agreements it has signed over the past 24 years, according to a report issued last week.

The report said that Vietnam has witnessed rapid economic growth, trade and investment expansion, and substantial poverty alleviation.

The report added that representatives from other domestic firms (i.e. auto, paper and pulp) were wary of the changes but resigned to facing increased competition from abroad.

ASEAN, as the Association of Southeast Asian Nations is often known, comprises ten countries: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

A shot in the arm

Le Quang Lan, deputy director general of the Ministry of Industry and Trade’s Multilateral Trade Policy Department, said local businesses have enjoyed immediate gains from the regional trade deals.

In the agreements between China and ASEAN, 25 percent of Vietnamese businesses benefited, he said.

Vo Tri Thanh, deputy director of the Central Institute for Economic Management, said the agreements have improved the competitiveness of local firms and attracted foreign investors.

He added that the agreements have also improved skills and salaries among the domestic workforce, especially in the management and engineering sectors.

According to Thanh, the average salary for a Vietnamese CEO working for a multinational firm is VND400 million per month while the salary for state-owned company heads topped out at VND50 million.

Last year, Vietnam’s total exports were valued at US$56.73 billion, a drop of 9.5 percent year-on-year due to the global economic downturn.

The partners were also suppliers of Vietnamese businesses, with China topping the list followed by ASEAN members, Japan and Korea.

You scratch my back...

Lan, from the Trade Policy Department, said that Vietnam will fulfill its commitments to cutting import tariffs on products from its Asian trade partners over the next decade.

Vietnam aims to shave 3 to 4 percent off the current 12 percent tariffs on consumer products, garments, wooden furniture and steel, said Lan.

The country continues to protect agricultural products like sugar, eggs and tobacco, and industries like petrol, rubber, automotive products, he said.

He claimed that Vietnamese trade negotiators did not pay enough attention to those barriers.

James Cassing, a professor at the University of Pittsburgh, said the effectiveness of the free trade agreements did not only depend on import tariff cuts.

If tough technical barriers are raised to protect domestic industries then the agreements mean nothing to partner businesses, he said.

The professor warned that the barriers will become increasingly common in export markets. Vietnam is in the process of negotiating agreements with the European Union and Chile.

Tuesday, October 12, 2010

Business urged to join FTA talks

HCMC - Business associations and companies can contribute to Vietnam’s negotiations over free trade agreements (FTA) with partners, said economic experts last week.

“Enterprises will be those impacted by free trade agreements, so business associations will be given a part to play in the process of FTA negotiations in the near future,” said Vo Tri Thanh, vice president of the Central Institute for Economic Management, at a workshop on EU-Vietnam Multilateral Trade Assistance Project III’s research.

The research has been done to assess how free trade agreements will impact on Vietnam’s economy via trade statistics. It is aimed at informing in advance Vietnam’s trade negotiators and policymakers of probable consequences of FTAs.

The research also identifies the impact and efficiency of several FTAs, including ASEAN-Korea, ASEAN-India, ASEAN-Australia-New Zealand, AFTA (ASEAN Free Trade Area), ASEAN-China and ASEAN-Japan. Although the business community will be affected much by FTAs, it seems to be not consulted in the negotiation process. Many enterprises do not have in-depth knowledge about FTAs and commitments in them, Thanh added. Therefore, the workshop was believed to help businesses.

Bui Truong Giang of the Vietnam Institute of Economics said the role of trade associations was very important since they represented enterprises in many industries but so far their voice had been little heard.

Experts said domestic enterprises should also gain access to information to know how FTAs would affect so as to choose key markets for their exports and potentially advantageous industries for investment.

According to MUTRAP III project’s research, the full impacts would be felt in 2015-2021 when all FTAs with Vietnam’s involvement are fully implemented. According to quantitative findings in the research, for both partial and full implementation, estimated gains are largest for FTAs with Korea and Japan, and AFTA.

Friday, September 24, 2010

FTAs have positive impact on ASEAN trade: official

Minister of Industry and Trade Vu Huy Hoang confirmed the positive impact the Free Trade Agreements (FTAs) have had on trade within the group at the 42nd ASEAN Economic Ministers’ Meeting Monday.

Hoang also said in an interview with the Vietnam News Agency (VNA) that ASEAN has signed FTAs with six of its major partners, including China, South Korea, Japan, India and Australia and New Zealand.

The minister said the FTAs with these partners have helped boost ASEAN’s exports, especially to China, South Korea and Japan, which benefits Vietnam immensely.

As a result, 27.8 percent of Vietnam’s export revenues to Japan receive preferential tariff rates under the ASEAN-Japan Comprehensive Economic Partnership Agreement (AJCEP). The rates under the free trade agreements between ASEAN and its partners are 21 percent to China and 79 percent to South Korea.

The head of trade called on the 10-member bloc to work out a long-term and consistent strategy to harmonize regulations of the different FTA’s.

“ASEAN needs to tap its central position in the region better and take full advantage of the preferential tariffs offered by the FTAs,” said Hoang.

He rejected the argument that some Vietnamese exports face difficulties due to the similarity in exports between Vietnam, ASEAN and China. Hoang emphasized that it’s the economic structure which will decide the level of cooperation.

“Up to 80 percent of Vietnam’s imports from China and between 65 and 75 percent of its imports from ASEAN are from a third country as well as the raw materials and equipment for production,” he explained.

“That’s why stepping up cooperation with China and ASEAN has facilitated Vietnam’s capacity to produce more and export more,” he emphasized.

The minister described China as Vietnam’s leading trade and investment partner, with the potential for enormous amounts of bilateral trade still lying ahead.

The 2008 bilateral trade revenue of 20.2 billion USD has made China Vietnam’s second biggest trading partner, after ASEAN.

The ASEAN-China Free Trade Agreement (ACFTA) has given Vietnamese industries more chance of accessing materials and equipment for production and export activities, said the minister.

The ACFTA, which asks China to cut 90 percent of all import tariffs on Vietnamese products from 2010, would create ideal conditions for Vietnamese imports to take a foothold in the world’s third largest economy, especially products that Vietnam is strong in such as agricultural produce, seafood and minerals.

Thursday, September 23, 2010

FTAs have positive impact on ASEAN trade

At the 42nd ASEAN Economic Ministers’ Meeting, the Chairman, Vu Huy
Hoang, confirmed the positive impact the Free Trade Agreements (FTAs)
have had on trade within the group.

Hoang, who is
also Vietnam ’s Minister of Industry and Trade, said in an interview
with the Vietnam News Agency (VNA) that ASEAN has signed FTAs with six
of its major partners, including China , the Republic of Korea ,
Japan , India and Australia and New Zealand .

The minister said the FTAs with these partners have helped boost
ASEAN’s exports, especially to China , RoK and Japan , which benefits
Vietnam immensely.

As a result, 27.8 percent
of Vietnam ’s export revenues to Japan receive preferential tariff
rates under the ASEAN-Japan Comprehensive Economic Partnership Agreement
(AJCEP). The rates under the free trade agreements between ASEAN and
its partners are 21 percent to China and 79 percent to the RoK.

The head of trade called on the 10-member bloc to work out a
long-term and consistent strategy to harmonise regulations of the
different FTA’s.

“ASEAN needs to tap its central
position in the region better and take full advantage of the
preferential tariffs offered by the FTAs,” said Hoang.

He rejected the argument that some Vietnamese exports face
difficulties due to the similarity in exports between Vietnam , ASEAN
and China . Hoang emphasised that it’s the economic structure which
will decide the level of cooperation.

“Up to 80
percent of Vietnam ’s imports from China and between 65 and 75
percent of its imports from ASEAN are from a third country as well as
the raw materials and equipment for production,” he explained.

“That’s why stepping up cooperation with China and ASEAN has
facilitated Vietnam ’s capacity to produce more and export more,” he
emphasised.

The minister described China as
Vietnam ’s leading trade and investment partner, with the potential for
enormous amounts of bilateral trade still lying ahead.

The 2008 bilateral trade revenue of 20.2 billion USD has made China Vietnam’s second biggest trading partner, after ASEAN.

The ASEAN-China Free Trade Agreement (ACFTA) has given Vietnamese
industries more chance of accessing materials and equipment for
production and export activities, said the minister.

The ACFTA, which asks China to cut 90 percent of all import tariffs
on Vietnamese products from 2010, would create ideal conditions for
Vietnamese imports to take a foothold in the world’s third largest
economy, especially products that Vietnam is strong in such as
agricultural produce, seafoods and minerals./.

Tuesday, September 21, 2010

EU sees wider S.E. Asia trade talks

DANANG - The European Union expects to conclude a free trade deal with Singapore by the end of next year and is likely to begin talks with other Southeast Asian nations soon, a top official said on Friday.

The EU's trade commissioner, Karel De Gucht, also said Europe still hopes to ultimately reach a region-wide deal with the Association of Southeast Asian Nations (ASEAN).

He said a regional pact has not been possible partly because of military-ruled Myanmar, which is under European sanctions.

Another hindrance was the differing levels of economic development within the 10-member ASEAN, he told reporters after talks with Southeast Asian economic ministers.

Attempts to reach a pact with all of the ASEAN members except Myanmar, Cambodia and Laos were suspended last year, after which the EU began looking at bilateral pacts.

De Gucht said two rounds of talks have been held with Singapore -- the region's most developed economy -- and a third is to take place next month.

"Negotiations with Singapore are going well," he said. "We expect these negotiations being closed and having come to a positive end before the end of next year."

He added that formal free trade talks with Vietnam are likely to begin before the end of this year, followed by other countries "in the coming months."

De Gucht declined to name the other nations but he told AFP that each of the seven that participated in the earlier suspended talks "have expressed in one way or another interest".

ASEAN itself is working towards a single market and manufacturing base by 2015.

De Gucht said that once such an integrated market is achieved it would make sense for the region's bilateral trade pacts to be consolidated into a region-wide deal.

Asked whether such a deal could, however, be reached unless the human rights situation in Myanmar improves, he told AFP: "It's obvious that we are not ready, the European Union is not ready, to negotiate with Myanmar but who knows what the political situation will be in Myanmar in five years or in seven years."

The EU is the bloc's largest foreign investor, and second-largest trade partner, with two-way trade worth almost US$172 billion dollars last year.

EU sees wider S.E. Asia trade talks