VietNamNet Bridge – Pham Chi Lan, a well known economist in Vietnam, has
urged relevant ministries to consider installing non-tariff barriers to control
the imports, which she believes a very important thing that needs to be done in
preparing for the implementation of free trade agreements (FTAs).
Mrs Pham Chi Lan, the well known economist in VIetnam
Lan said that the low import tariffs will pave the way for foreign made products
to flow to Vietnam which later may dominate the domestic market. This should be
seen as big worry for the national economy, where the technical barriers remain
imperfect, the competitiveness of enterprises remains weak and institutional
reform has not been completed.
According to Lan, the trade liberalization levels committed in the FTAs between
Vietnam and ASEAN, between ASEAN and Japan, ASEAN and China are much higher than
the committed levels in joining WTO (the World Trade Organization). The tariff
cuts are also sharper and the market openness is bigger in FTAs, with 90 percent
of tax categories to be cut to zero percent by 2015, and the other 10 percent by
2018.
This means that the goods from other countries, especially from China, in the
agreement with which, the sharpest tax cuts will occur in 2011-2015, will flow
to Vietnam. This also means the big challenge for the national economy and
Vietnamese enterprises.
Lan, in the recent interview given to Saigon Tiep Thi, said that she now still
cannot imagine what the national economy structure will be like by 2015 or 2020
in such a context.
Besides the big challenges you have mentioned, FTA will also bring big
opportunities to Vietnamese enterprises, as they can boost exports to the
countries which have FTAs with Vietnam. What do you think about the capability
of Vietnamese enterprises to take full advantage of the FTAs to expand
production and export?
The statistics released by the Ministry of Industry and Trade at a recent
workshop show that about 30 percent of enterprises can take full advantage of
the tax cuts in FTAs to increase exports.
I think that the 30 percent of enterprises could be foreign invested
enterprises. It is not a surprise at all, and this occurs in other ASEAN
countries as well. Foreign invested enterprises always prove to be the ones
which can be the best in taking full advantage of their opportunities. They are
Japanese and South Korean invested enterprises.
Meanwhile, I think that domestic enterprises still cannot exploit the
opportunities brought by FTAs. You can see that the highest growth rates in
export still can be seen in familiar markets, including the US, EU and Japan,
while Vietnam still imports big volumes of products from ASEAN, and especially
from China.
So what should Vietnam do to prevent the challenges from becoming the
obstacles for Vietnamese enterprises?
First of all, the State should install non-tariff barriers. Only the State has
the right to set up standards as the tools to control imports.
Regarding the technical barriers, experts have many times repeated that it is
necessary to install technical barriers. Once the tariff is cut and the
licensing procedures become simplified, it would be foolish if we do not think
of setting up technical barriers.
However, as far as I know, at that moment, the Ministry of Science and
Technology said that if setting up overly high barriers, domestic enterprises
would not be able to overcome the barriers. Meanwhile, if the barriers are low,
this will pave the way for foreign made products to flow to Vietnam.
I do not think this way. We can calculate the barriers every day. It is also
necessary to set up high standards, and domestic enterprises should understand
that they need to meet the high requirements to survive.
I have to say that we still do not have good technical barriers to control the
imports. This should be blamed on the relevant ministries
Second, manufacturers should improve their production capability in order to
compete successfully with imports, especially the ones from China.
We should ask ourselves if we want to live or die. If we want to “surrender”, we
should do this right now. If we want to survive, we need to change, and do this
immediately.
Source: TBKTSG
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