Malaysia’s digitalnewsasia.com on December 20 reported findings from consulting firm Oxford Economics’ recent research commissioned by the Institute of Chartered Accountants in England and Wales (ICAEW), saying that it offers a positive assessment of Vietnam's economy in 2023 and forecasts a bright outlook for a medium term.

According to Oxford Economics, Vietnam has been a regional export outperformer this year, delivering a year-on-year GDP growth of 5.3% in the third quarter from 4.1% in the previous quarter. This was led by a strong recovery in the manufacturing sector thanks to rising export values amidst improvements in electronics exports, especially to China. 

Carrying on from the Government’s increased public investment in the third quarter, there is still room to boost investment spending in the next quarter, it said.

About the Southeast Asia economy, it said economic momentum picked up in the third quarter, but there are concerns about potential headwinds in 2024, including slow global growth, tourism bright spots losing their shine, and declining private consumption. 

Southeast Asia has displayed resilient economic momentum in Q3, with improved trade conditions driving GDP growth to surpass expectations. Export growth in Singapore, Malaysia, and Vietnam expanded from Q2 to Q3, with Singapore and Vietnam enjoying notable turnarounds with both markets having significant footholds in the electronics trades.

However, Southeast Asia's exports will remain weighed down by a prolonged global weakness, particularly from US and China.

While inflation is likely to resume its decline further in the future, analysts are not expecting rate cuts until Q2 2024.

Improving connectivity between domestic, global logistics networks needed

Amid economic uncertainties and fierce competition, improving connectivity between domestic and global logistics networks has become a pressing demand, experts said at a logistics forum with Asia-America 2023 held by the Ministry of Industry and Trade (MoIT) in Ho Chi Minh City on December 21.

Speaking at the event, Director of the MoIT’s European-American Market Development Ta Hoang Linh said situated strategically in a rapidly evolving global centre known for its concentrated supply channels, Vietnam possesses ample advantages to boost manufacturing, export and expansion of logistics services.

Over the past years, Vietnam's logistics sector has made considerable strides, with nearly 35,000 businesses now operating in the field, including around 5,000 professional enterprises.

According to the World Bank’s latest report 2023, Vietnam ranked 43rd in the Logistics Performance Index and among the top 5 countries in ASEAN. However, amid global economic challenges and a decline in global demand, the industry is experiencing great pressure to optimise operations and vie for orders, he added.

As economies of Europe and America next year are projected to either decrease or increase marginally compared to 2023, he suggested optimising logistics costs and transport time, thereby improving competitiveness of Vietnamese businesses and their exports-imports.

In addition to competitive pressures on services, new international environment standards are prompting logistics enterprises to innovate and switch to eco-friendly practices to ensure sustainable development, he noted.

Nguyen Xuan Hung, Deputy General Director of the Vietnam Railway Transport and Trading JSC (Ratraco), said transporting goods through Asia-Europe rail transport route that connects Vietnam, China, Central Asian countries, Russia and the EU is one of the optimal solutions for cost-effective logistics and ensuring the safety and quality of goods. In addition, businesses could explore the option of multimodal transport, combining both sea and rail routes, to reduce transit time to more distant locations.

Sharing the same view, Managing Director of GEODIS Vietnam Chandler So described Vietnam as an important trading partner of Europe and America.

He noted that the European and American markets increasingly prioritise sustainability and Environmental, Social and Governance (ESG) factors, which extend beyond the manufacturing phase to include transport and post-logistics services. Therefore, logistics suppliers need to swiftly adjust their supply chain operations towards greener, more eco-friendly and sustainable practices to maintain long-term competitiveness, he suggested.

ESG - Green standard for Vietnamese food industry

The Ho Chi Minh City Trade and Investment Promotion Centre (ITPC) cooperated with the HCM City Food and Foodstuff Association to organise a seminar "ESG - Green standards for the food industry" on December 20.

ITPC Director Tran Phu Lu said ESG standing for environmental - social - governance is a framework used to assess an organisation's business practices and performance on various sustainability and ethical issues. ESG is the key to strong and long-term development in all fields. However, this set of ESG standards is still quite new to the Vietnamese business community.

The ESG conference was an opportunity for businesses to access a lot of useful information and answer their difficulties and problems in implementing ESG into production and business activities to improve production efficiency and competitiveness of Vietnamese goods in the world market.

In reality, many Vietnamese businesses have made changes in their management thinking on sustainable development and included ESG in their business strategies. Small and medium-sized Vietnamese enterprises operating in the field of consumer goods production such as food and beverage are gradually implementing sustainable development such as producing environmentally friendly products.

Moreover, they have been paying attention to local economic development, and community support activities and especially focusing on producing green products and products labelled green by reputable domestic organizations.

Not outside the trend of applying ESG among businesses globally, the goals to enhance the sustainable development of businesses in Vietnam are gradually being concretised. In particular, green products are products that meet 4 criteria. The first criterium is that products are made from environmentally friendly materials; secondly, products provide safe solutions for the environment and health to replace toxic products; thirdly, products reduce environmental impact during use (less waste, use of renewable energy, low maintenance costs); finally, products create a friendly and safe environment for health.

At the conference, experts discussed and deployed useful content to businesses about global ESG trends as well as the level of influence and main strategies for the food industry to implement ESG; tools to support businesses in inventorying greenhouse gases and producing reports; solutions to optimise transportation processes and manage supply chains in a sustainable way through Carbon and ESG certifications; green, environmentally friendly food packaging.

However, the development of ESG for Vietnamese businesses is facing many difficulties. Therefore, relevant authorities need to develop tools to support businesses in inventorying greenhouse gases and publishing reports as well as have solutions to optimise transportation processes and manage supply chains in a sustainable way through carbon and ESG certifications.

Moreover, responsible agencies should promote the development of a green and environmentally friendly food packaging manufacturing industry.

Seafood exports fetch roughly US$9.2 billion in 2003, set to earn US$9.5 billion next year

Seafood exports this year are estimated to reach approximately US$9.2 billion, meeting 92% of the set plan of US$10 billion for the year, with this figure rising to US$9.5 billion ahead in 2024, according to the Directorate of Fisheries under the Ministry of Agriculture and Rural Development (MARD).

Key export items primarily include shrimp at about US$3.45 billion, Pangasius at around US$1.9 billion, mollusks at roughly US$0.8 billion, and Tuna at approximately US$0.9 billion.

The reason for this decline in seafood exports is due to the effects of the prolonged Russia-Ukraine conflict, the fighting between Israel and Hamas, and the unstable situation in the Middle East, all of which has caused the world economy to recover slowly. Indeed, the prices of some goods and input materials serving aquaculture development are still high; high logistics costs put pressure on production activities, especially when consumer demand slows down and production scale shrinks.

Furthermore, the European Commission continues to maintain a "yellow card" warning for Vietnam's exploited seafood, causing its seafood exports to fail to achieve the set plan.

Regarding fisheries exploitation management, Nguyen Van Trung, head of the Department of Fishing Vessel Management and Fishery Logistics Services, said that it is necessary to complete the Electronic Logbook software in order to serve the traceability of seafood origin, whilst also strengthening the inspection and supervision of the implementation of regulations on local exploitation management.

He also highlighted data digitization as an important basis for fisheries management, administration, and transparency. Output, exploitation of resources, number of ships, and number of crew members passing through the port must apply digital technology and management software to be both efficient and save resources.

Tran Dinh Luan, director general of Directorate of Fisheries, pointed out the difficulties the seafood industry will continue to face ahead next year amid seafood resources declining while the EC still maintains the "yellow card" warning. In addition, import demand from markets that have not shown signs of recovery.

​Therefore, in 2024 the fisheries industry targets total seafood output of about 9.22 million tonnes, equivalent to the estimate for 2023. Among them, the catch output is about 3.54 million tonnes, down 8.3% compared to 2023; aquaculture output stands at 5.68 million tonnes, an increase of 5% compared to the estimate for 2023; seafood export turnover hit US$9.5 billion.

To overcome difficulties occurring in export markets, Luan underlined the need to continue to apply chain-linked production. In the field of exploitation, the origin of products must be traceable and combat illegal fishing, while exploitation must be consistent with resource reserves and ensure food safety on fishing vessels and fishing ports.

In addition to requirements for reducing emissions and increasing green production, animal welfare is also an issue for the aquaculture sector in the coming time, Luan said, adding that this is not only a demand of the domestic market but also a trend in the world consumer market in the coming time.

45 provinces, cities join HCM City supply-demand link-up programme

More than 1,000 businesses from 45 cities and provinces are participating in the annual Supply-Demand Connection conference that opened in HCM City on December 21.

Organised by the city Department of Industry and Trade in collaboration with its counterparts elsewhere and the Ministry of Industry and Trade, this year’s programme focuses on promoting links between 12 distribution systems, five e-commerce platforms and more than 1,000 suppliers.

There will be seminars on accessing advanced sales methods by Amazon Global Selling Vietnam, Alibaba, Tiki, and Data Science JSC.

It will feature an exhibition titled "Essence of craft villages and regional specialties 2023" that will showcase products made by traditional craft villages, speciality items and products developed under the One Commune, One Product programme organised by the city department and Investment and Trade Promotion Centre of HCM City.

Visitors will have a chance to learn about the history of and interesting stories about products from famous traditional craft villages and join artisans in making unique handicraft products.

Speaking at the opening ceremony, Nguyễn Văn Dũng, deputy chairman of the city People’s Committee, said the programme in its 12th year was a two-way activity helping provinces find regular distribution channels for their products and city businesses get a steady and abundant supply of goods at reasonable prices for the market stabilisation programme,  especially during the holiday season.

Thanks to the close co-operation between the localities, consumers in the city had access to thousands of specialities so much so that retailers such as Coopmart, BigC, Top Market, Satra, and MM Mega Market had set aside separate space for displaying OCOP products, he said.

Many OCOP products such as Cần Giờ bird’s nest, Bến Tre coconut, Bình Phước cashew, Trà Vinh coconut nectar, Bình Định young green rice cake, and Bắc Cạn arrowroot vermicelli have become popular in the city, he said.

He called on other localities to help businesses apply technology in production and farming and participate in the programme, scrupulously control product quality and organise trade promotion programmes in major markets, including HCM City.

Deputy Minister of Industry and Trade Phan Thị Thắng said the programme launched in 2012 had seen a sharp rise in the number of provinces and businesses joining it.

She called on local governments and businesses to foster the domestic market, improve quality and competitiveness and build brands for their products.

She urged producers and distributors to link up online at www.ketnoicungcau.vn and to enhance sales of their products on e-commerce platforms. 

In addition, more efforts were needed to support products voted as HCM City Golden Brand products, OCOPs and regional specialties enter the city’s distribution channels, she added.

The event is being held at the Phú Thọ Gymnasium in District 11 with 500 stalls.

Việt Nam plays crucial role in driving growth in Asia: forum

Việt Nam, with its abundant young labour force and strategic location, is playing a central role in driving growth in the Asia region, said the Governor of Japan’s Hyogo Prefecture. 

Speaking at the ‘Green Economy - Opportunity and Cooperation’ forum on Wednesday in HCM City, Motohiko Saitō said the important partnership between Việt Nam and Japan has laid the foundation for connecting HCM City and Hyogo Prefecture over the years.

Saitō said that Japan had high expectations for Việt Nam’s growth potential and green economy, particularly those in Hyogo Prefecture.

He attributed the expectations to the Southeast Asian nation’s recovery from the pandemic, along with a growth rate of over 5 per cent per year and its commitment to achieving net-zero emissions by 2050.

Hyogo Prefecture is home to a number of companies working on advanced technology to achieve similar goals such as addressing climate change, promoting green energy, and digital transformation, according to the governor.

Nguyễn Văn Dũng, vice chairman of the city People’s Committee, said Việt Nam had seen over 5,200 investment projects from Japan, with bilateral trade between the two countries reaching over US$40 billion as of November 2023. 

Japan was currently the fifth largest trading partner and the third largest investor in HCM City, with 1,657 Japanese projects worth over $5.7 billion, which accounts for 10 per cent of the city’s total foreign investment.

The city wanted to attract foreign investors, especially those from Japan, and improve the investment and business environment, particularly with a focus on green growth strategies.

The city was implementing a National Assembly resolution on piloting certain mechanisms and policies specific to its development that provide favourable conditions for fulfilling commitments with foreign investors.

Trần Văn Bích, head of the economic development research department at the HCM City Institute for Economic Development Research, said HCM City had over the years focused on green economy development. 

The city was prioritising integrating green growth into various sectors to reduce emissions, utilise resources efficiently, and promote resilience to climate change and natural disasters, he added.

During a follow-up meeting with the governor of Japan’s Hyogo Prefecture, Phan Văn Mãi, chairman of HCM City People’s Committee, said Saitō’s visit took place after Việt Nam and Japan elevated their relationship to a Comprehensive Strategic Partnership for Peace and Prosperity in Asia and the World, which would open up more cooperation opportunities for the two localities.

He called on Hyogo firms to invest in the city’s many fields, such as banking, finance, tourism, trade, agriculture, electronics, semiconductors and new materials.

Saitō said many Hyogo businesses also wanted to invest in the fields of human resource training, high added value production, and exchanges between residents, especially youths.

Investment in HCM City also offers an opportunity for Hyogo’s businesses, to invest in the Cửu Long (Mekong) Delta region of Việt Nam, according to Saitō.

The forum was organised by the HCM City Investment and Trade Promotion Center in collaboration with the Hyogo Prefecture Government. 

150 businesses to join wooden furniture expo in Đồng Nai

Up to 150 domestic and foreign businesses will participate in a large-scale wooden furniture exhibition slated to take place in Biên Hoà City, Đồng Nai Province from December 23, 2023 to February 4, 2024.

To be held by Tavico Home Joint Stock Co as part of the TavicoHome Viefurn 365 Fair series, the upcoming event will comprise over 1,000 booths, spanning a total area of 20.000sq.m. 

It is described as a great opportunity for distributors, manufacturers and international partners to connect to create common benefits for the interior and exterior wood industry and wood products and facilitate consumption for the year-end period. 

Statistics from the General Department of Customs revealed that Việt Nam's exports of wood and wood products reached US$1.22 billion in November, down 4.8 per cent month-on-month, but up 3.4 per cent year-on-year.

However, over the past 11 months, wood and wood product exports brought home $12.1 billion, down 17.5 per cent over the same period last year. 

Decreases were seen in major export markets such as the US market with $6.6 billion, down 18 per cent, China ($1.55 billion, 22 per cent) and Japan ($1.52 billion, 12 per cent). 

The country’s exports of wood and wood goods will likely hit about $14.5 billion by the year-end, lower than the yearly target of $17 billion, according to the Handicraft and Wood Industry Association of Hồ Chí Minh City.

Vietnamese, Chinese firms sign cooperation document in farm produce, food

Three cooperation agreements were inked between businesses from Việt Nam and Yunnan province (China) during a conference on trade promotion and economic cooperation in Hà Nội on Wednesday.

Under the agreements, these firms would foster their cooperation in the field of farm produce and food.

During the event, the two countries' businesses also learned more about each other's import and export needs, identified potential partners, and then built appropriate production and business plans.

In his speech at the event, the deputy head of the Việt Nam Trade Promotion Agency Lê Hoàng Tài said that Việt Nam's participation in new-generation free trade agreements (FTAs) created favourable legal frameworks for its economic and trade ties with countries worldwide to grow further.

He cited statistics by the General Department of Customs showing that trade between Việt Nam and the neighbouring country reached US$175.6 billion last year, an increase of 5.5 per cent from 2021. Over the past 11 months of 2023, the bilateral trade was estimated at $155.8 billion, and the whole year’s value was expected to be equal to that of 2022.

However, he noted that economic and trade relations between Việt Nam and Yunnan had yet to match the potential of both sides, as two-way trade stood at only $3.2 billion last year, and $2.2 billion over the past 10 months of this year.

According to the Yunnan Department of Commerce, Yunnan mainly exports coking coal, fertiliser, electricity, electrical machinery and equipment, chemicals and agricultural products to Việt Nam, while importing yellow phosphorus, tropical fruits, wood products, peeled boards, medicinal herbs, fresh cassava, cassava starch, and agro-aquatic products from the Southeast Asian nation. 

The way out for pharma distribution

Opening the market to pharmaceutical distribution once again topped discussions among policymakers, experts, and businesses at a roundtable held by the Central Institute for Economic Management (CIEM) in Hanoi, especially as the Law on Pharmacy is being amended and submitted to the National Assembly for discussion at its 2024 session.

Nguyen Anh Duong, director of the Department of General Issues under the CIEM, said, “The country has been fully open to foreign warehousing and freight agency services for 10 years. The Law on Pharmacy 2016 was consistent with Vietnam’s international commitments. However, there are still some legal issues.”

He cited regulations on distribution and logistics stated in the Commercial Law and the Law on Pharmacy 2016 as an example. Specifically, distribution refers to “wholesaling, retailing, sake agencies, and franchising” in the Commercial Law. The definition of distribution in the Commercial Law excludes logistics services. This means that logistics services are considered as a separate category within the various sub-sectors of distribution activities.

Pharmaceutical distribution and logistics are also regulated in the Law on Pharmacy and related guidance documents. However, the concepts of distribution as stipulated in the implementing documents of the Law on Pharmacy are inconsistent with the concepts of distribution and logistics as defined in the Commercial Law.

In the Law on Pharmacy, drug distribution is not defined specifically, and foreign-invested enterprises (FIEs) are not restricted from providing drug and drug raw material preservation services. Moreover, the law does not regulate drug distribution as a pharmaceutical business activity;

According to pharma expert Dr. Le Xuan Ba, Vietnam’s distribution system is too complicated and ineffective, partly because the country has not opened up related pharma distribution and logistics.

“It needs to urgently study to clarify and unify the concepts in relevant laws, while eliminating unnecessary regulations that are hindering the development,” he said. “Vietnam needs to research and develop a roadmap to gradually open doors for FIEs in pharmaceutical distribution and logistics.”

According to Cuong Nguyen, lawyer at Novartis Vietnam, the goal of the pharmaceutical industry is to enable people to access high-quality drugs at reasonable prices. “It is necessary to encourage and open doors to foreign investment in the pharmaceutical industry,” Nguyen proposed. “It should have specific policies for the pharma industry to encourage more foreign investment and FIEs to transfer technology to bring about more value to the local pharma industry.”

According to experts, Vietnam has made commitments to fully open transportation services for pharmaceuticals, but not distribution services. These commitments have clearly distinguished between distribution services and transport services.

In particular, in commitments to the World Trade Organization (WTO), distribution services and transportation services are treated as separate entities. Vietnam recently committed to fully opening up its transportation service industry, which includes various services such as transportation, cargo handling, storage, and warehousing.

As part of the EU-Vietnam Free Trade Agreement (EVFTA), Vietnam has committed to opening up its distribution and transportation services industry, similar to the standards set by the WTO. The commitment to liberalise service trade in the EVFTA is the maximum restrictions, barriers, and conditions that Vietnam can apply to EU investors and service providers when accessing the Vietnamese market.

International experience shows that most ASEAN member states have liberalised pharmaceutical distribution services.

For example, the city-state of Singapore does not issue clear requirements for pharmaceutical vehicles or the necessary equipment for transportation, and the government is open to foreign investment in storage and warehouse facilities. This policy will likely pull in more foreign direct investment into the country, boosting economic growth and creating job opportunities.

In response to the recommendations being made, a representative from the Drug Administration of Vietnam under the Ministry of Health said, “The ministry is working on the amendments to the Law on Pharmacy to create additional enhancements for businesses. We will need a roadmap for such market opening to ensure success.”

Wood sector anticipates rosier future

According to figures from the Vietnam Handicrafts Exporter Association, Vietnam can expect around $14 billion from the export of wood and wooden items in 2023, falling short of the $17 billion target. However, such a figure could be deemed encouraging amid the recession in the global market and consumers’ tightened spending.

Many businesses in the sector have already secured export orders, mostly small, for the first quarter (Q1) of next year when the shopping season in Vietnam’s key export markets such as the EU and US begins.

Tran Hoai Huu, director of Gia Nhien Co., Ltd. based in Ho Chi Minh City’s Binh Thanh district, said. "We have successfully finalised export orders serving the year-end festive occasions and in November, we began receiving orders for Q1 next year."

Exports have seen an improvement by leveraging certain support factors such as increased trade promotion and a better-than-expected recovery of the global economy.

According to Tran Quoc Manh, chairman of Saigon Trade and Production Development Corporation (Sadaco), like many firms, Sadaco was expecting a sharp decline in its order intake and revenue this year.

The company, however, saw a rebound and many workshops have resumed production at 60-80 per cent of their capacity, which has been a positive signal on the threshold of the new year.

To Dang Trung, director of Cung Viet Co., Ltd. (Curvetta) based in the southern province of Binh Duong, however, assumed that exports of wood and wooden furniture would see a rebound, even though the process has been rather slow, and furniture is being sold at low prices.

“Luckily, material costs went down slightly in the later months of the year, so that Curvetta, as well as other firms in the sector, have hopefully been able to maintain profit levels as they have been in previous years,” said Trung.

“Our firm finalised presenting new products to customers in the UK and Spain several months ago. The success of orders comes to about 80 per cent or more. We expect about a 40-50 per cent jump in the number of export orders in Q1 of 2024, compared to the same period last year,” Trung added.

Exports have seen an improvement by leveraging certain support factors such as increased trade promotion and a better-than-expected recovery of the global economy.

The pace of the rebound, however, is slow, and the situation is forecast to remain so for the foreseeable future. This has meant businesses in the sector have put their pricing policies at the top of their agendas.

“Price is decisive in securing export orders,” said Huu from Gia Nhien, adding, "We offer loyal customers competitive price schemes, whereas new customers are offered these discounts depending on the order value."

Similarly, Trung from Curvetta, said, "We offer a 20 per cent discount to customers buying from 10 containers full of products, and a 35 per cent discount for those buying from between 40–50 containers."

South Korean giants expand investment in high-tech sphere

South Korean groups are seeking to reinforce their footprints in a wide range of green and high-tech ventures in Vietnam.

Hyosung Group, a South Korean industrial conglomerate, has announced plans to invest $720 million in a biotech fibre manufacturing plant in Vietnam.

The development came to light during a meeting between Nguyen Van Tho, Chairman of the People’s Committee of the southern province of Ba Ria-Vung Tau, and Hyosung representatives on December 4.

Kim Kyung Hwan, CEO of Hyosung Vietnam, revealed that the carbon Vietnam fibre plant situated in Phu My II Industrial Park (IP) is progressing significantly. This project underscores Hyosung’s commitment to pioneering advanced material production.

The proposed biotech fibre facility represents Hyosung’s first global foray into using eco-friendly technology for Spandex fabric production. This initiative aligns with the group’s broader strategy of diversifying its manufacturing portfolio and reinforcing its environmental commitments.

Earlier, Hyosung Vietnam had disclosed plans for an approximate $1 billion investment in a carbon fibre plant within the same IP, with an initial investment phase of about $160 million.

In another case, LG Innotek, a subsidiary of electronics giant LG, may become the first investor breaking ground at Trang Due 3 IP in the northern port city of Haiphong. At present, Kinh Bac City Group is eager to complete the legal procedures for Trang Due 3 IP to be ready to welcome investors in the first quarter of 2024. To date, 200 ha in the IP have been cleared.

Elsewhere, South Korean conglomerates such as Samsung and SK Group also consider Vietnam as their key manufacturing hub and have plans to expand their operations in the country.

During a meeting with National Assembly Chairman Vuong Dinh Hue at the National Innovation Centre in Hanoi in October, SK chairman Chey Tae-won said the firm was willing to cooperate with Vietnam in energy transition thanks to its wealth of green energy technologies.

The Korean Chamber of Commerce in Vietnam statistics show that 9,000 South Korean enterprises are investing in Vietnam, operating not only in traditional fields but also in emerging fields such as AI, IT, the environment, and green growth, with about $1.3 billion invested in renewable energy. South Korean enterprises have made important contributions in several fields such as high technology, the electronics industry, energy, cars, and construction.

However, Vietnam still needs to improve on problems relating to legal procedure so that disbursement can move forward smoothly. After the announcement that Hyosung would add $720 million to Ba Ria-Vung Tau, the investors showed goodwill via continuous meetings with the provincial leadership.

At meetings, the representative of Hyosung urged provincial leaders to support to deal with administrative procedures relating to the construction and environment licences, and especially on fire prevention licences.

Notably, at a meeting between the prime minister and foreign-invested enterprises in April, Kim Yong Seup, CEO of the Hyosung subsidiary in the southern province of Dong Nai, said the appraisal to get the fire prevention licence became more complicated from late 2022.

Accordingly, the Police Department of Fire Prevention, Fighting, and Rescue under the Ministry of Public Security will be responsible for the appraisal instead of the provincial agency. The schedule for this work is also uncertain, impacting the company’s expansion plan, Seup said.

“Implementing the project on time will help the company ensure the prestige with customers, and simultaneously contribute to improving the competition capacity in attracting investment capital for Vietnam,” Seup explained.

Last week, Deputy Prime Minister Tran Luu Quang asked ministries and localities to cooperate to prepare convenient conditions to welcome new investment capital inflows next year.

RCEP expansion eyed as trade facilitation opens new avenues

With two-year entry into force of a major regional trade deal, further investment and trade cooperation is expected with an additional plan on membership expansion.

On December 1, the Vietnamese government enacted Decree No.84/2023/ND-CP to amend details on Vietnam’s special preferential import tariff schedule for implementation of the Regional Comprehensive Economic Partnership (RCEP) towards 2027.

Under Decree 84, Myanmar and the Philippines are now eligible for special preferential import tariff rates as from December 1 in Vietnam. This would mean all 14 RCEP member states are eligible for these tariff rates.

Decree 84 has also amended regulations on imports eligible for special preferential import tariffs. Specifically, they must be included in the special preferential import tariff schedule promulgated together with the previous decree. Moreover, they are imported into Vietnam from all 14 member states of the RCEP.

They must also meet origin criteria (including regulations on direct consignment) and be supported by valid proofs of origin as prescribed in the RCEP and current laws.

“Regarding imports from Myanmar and customs declarations of imports from March 2022, and imports from the Philippines and customs declarations of imports between June and December 2023, if they meet the requirements for eligibility for RCEP rates and have paid a higher tax rate, customs authorities shall settle the overpaid tax according to tax administration laws,” the decree read.

In June, the RCEP agreement took effect for the Philippines, confirming that it is in effect for all 15 members. “With the implementation of the RCEP, businesses in the region will avail of the opportunities made available to them and utilise it to deepen regional economic integration,” stated a joint media statement of the Second RCEP Ministers’ Meeting organised in August in Indonesia.

The RCEP covers a market of 2.3 billion people and $26.2 trillion in global output. The deal is responsible for 30 per cent of the global population and 25 per cent of global trade. It will decrease tariffs, set trade rules, and help link supply chains. The deal covers all aspects of business, including trade, services, e-commerce, telecoms, and copyright. Tariffs will be reduced within 20 years.

Martin Hayes, chairman of the EU-ASEAN Business Council said, “Collectively, the ASEAN countries have excellent external facing trade deals in place: the RCEP will surely help the region grow further and faster. ASEAN should be well-placed to continue its growth trajectory, even as the world faces significant economic and geopolitical issues.”

The ASEAN Secretariat stated in its ASEAN Investment Report 2023 that growth will be fuelled by the RCEP as it has linked ASEAN with major economies, including China, Australia, and Japan, covering a combined GDP of $25 trillion.

“The RCEP created duty-free access to the majority of goods which could enhance investment in every ASEAN country, but this will only work with necessary ports, roads, railways and airports capacity available to transport individuals and products,” the report said.

Under the terms of the RCEP, member countries committed to providing duty-free access to goods that represent 92 per cent of tariff lines. They also pledged to harmonise many rules and regulations that affect e-commerce and trade. This will create greater access to Asia’s largest and most developed markets, lower the costs of importing manufacturing inputs, and make it easier for companies to build supply chains that leverage different advantages and skills across the region.

Currently, member states are discussing how the RCEP membership can be expanded to other economies wishing to partake in the deal. According to its terms, any economy can become a member of the trade pact 18 months after its entry into force.

Under the RCEP’s commitments, member states committed to remove 87.8-98.3 per cent of tariff lines for Vietnam, and ASEAN countries vowed to do that with 86-100 per cent of tariff lines. The longest roadmap for tariff elimination is 15-20 years, as from the RCEP becoming valid.

According to Dezan Shira & Associates, as the RCEP is focused on trade facilitation, the blue-collar sector is expected to benefit the most. Furthermore, consumer sectors like tourism, education, entertainment, healthcare, and retail are also expected to benefit as the middle class expands. Further, Vietnam’s export-oriented industries such as IT, agriculture, automobiles, footwear, and telecommunications are expected to see gains.

The Vietnamese Ministry of Planning and Investment reported that cumulatively as of November 20, Vietnam attracted over $102.23 billion in registered investment capital from ASEAN member states, including Singapore ($73.7 billion), Thailand ($14.03 billion), Malaysia ($13.1 billion), Indonesia ($651.2 million), the Philippines ($608.2 million), Laos ($71.13 million), and Cambodia ($73.6 million).

Meanwhile, registered investment from Australia, China, Japan, South Korea, and New Zealand reached $2 billion, over $27 billion, $71.5 billion, $84 billion, and $208 million.

The ASEAN Secretariat has highly appreciated the investment facilitation in Vietnam, which it said has big potential to attract more foreign direct investment both inside and outside ASEAN.

“The Law on Investment has strong reform elements aimed at creating an open mechanism, overcoming bottlenecks in investment and business activities, improving transparency, diversifying investment forms, and regulating each type of investment procedure,” the secretariat said.

“Vietnam does not charge any fees for administering investment applications. Aside from granting fiscal incentives, the government also assists investors with other measures, such as exemption from or reduction of land-use fees and land rental fees; preferential land lease terms; assistance with recruitment and training of skilled labour; assistance with immigration and residence procedures; and reduced regulatory oversight in admin and customs procedures.”

Investment procedures are reviewed quarterly to identify areas to simplify procedures and eliminate barriers, the secretariat added.

Shrimp, fish see high output but lower export value

Vietnam earned around US$10 billion in revenue from seafood export every year. Although the output of shrimp and fish exports are quite optimistic but the export value has remained unchanged.

Speaking at a conference summarizing the seafood sector in 2023 hosted by the Directorate of Fisheries under the Ministry of Agriculture and Rural Development on December 21, Vice Chairman of the Vietnam Seafood Association Duong Long Tri said that the farmed shrimp output every year gains one million tons but the export turn-over value has only ranged from US$3.5 billion to US$4 billion.

Meanwhile, the previous output only reached 700,000 tons bringing the same value as the current time.

Therefore, it was important to review the processing solutions to increase the value of core products, thereby lifting the export turnover, added Mr. Tri.

According to the Directorate of Fisheries, 2023 was the third year that the seafood sector has implemented the Decision No.339 of the Prime Minister on approving the strategy for the development of Vietnam's fisheries by 2030 with a vision towards 2045 amid the global economic recession, difficulties on export orders, abnormal climate change, the yellow card warning against illegal, unreported and unregulated (IUU) imposed by the European Commission (EC) and so on, the seafood sector has achieved a total exploitation and farming output of 9.2 million tons, an increase of two percent over 2022.

Although the output has been increased, the seafood export turnover is expected to gain over US$9.2 billion over the set target of US$10 billion.

In 2024, the seafood sector sets a target to expand the seafood farming area of 1.3 million hectares with a total seafood output of 9.22 million tons and an export turn-over of around US$9.5 billion.

Presenting some difficulties, Director of the Directorate of Fisheries Tran Dinh Luan said that the source of income from seafood has decreased and EC continued to warn the yellow card maintaining with seafood products exploitation and the import demand from markets has not been recovered and so on.

Regarding missions in 2024, Director of the Directorate of Fisheries Tran Dinh Luan said that it is essential to well organize the production linked with vertical and horizontal chains.

Accordingly, as for the seafood exploitation, the origin of products must be traceable and illegal exploitation must be prevented; exploitation must be consistent with resource reserves and ensure food safety from fishing vessels and fishing ports to the factory.

Concerning seafood exploitation management, Head of the Department of Fishing Vessel Management and Fishery Logistics Services under the Directorate of Fisheries Nguyen Van Trung said that it was necessary to complete an electronic diary software serving for traceability of seafood origins and strengthen inspection and supervision of the implementation of regulations on exploitation management in localities.

Digitalization of data is an important basis for fisheries management, administration and transparency. It is important to identify the output, exploitation resources, number of ships and workers going in and out the port to apply digital technology and management software, which is both effective and saving, added Mr. Trung.

Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes