FTAs to affect strongly
With the establishment of ASEAN Economic Community (AEC) and numerous free trade agreements (FTA), the year 2016 is considered the year of Vietnam for deeper integration into the world economy. Apart from opportunities, the integration process has brought big challenges to the business community. Therefore, trade facilitation has been identified as one important task of the Government, local authorities, agencies, departments, associations, and organizations representing the business community. Particularly, Binh Duong province currently has more than 20,000 businesses, thus trade facilitation activities become necessary and must be fostered. The meeting evaluated impacts of FTAs on trade and investment fields, and made recommendations to local development.
According to VTFA Senior Advisor Nestor Scherbey, Trans-Pacific partnership (TPP) and Vietnam - EU Free Trade Agreement (EVFTA) have a major impact on investment attraction. 21-century commercial activities require the integration of the global supply chain to freight intermediate goods and finished goods around the globe. Nestor Scherbey said, many multinational companies imported raw materials and intermediate goods to product finished products for export. Rules of Origin (ROO) of FTAs open up new investment opportunities to multinational companies as well as their suppliers in Vietnam. This rule also offers an opportunity to Vietnamese enterprises to become suppliers of FDI enterprises and other international companies in the global supply chain. Namely, to meet ROO of TPP and EVFTA, companies will need new investments in production of materials and intermediate goods in Vietnam in order to meet specific conditions of finished goods in TPP and Europe.
At the conference
Nestor Scherbey said, based on ROO and appendixes of the two FTA, companies can determine the most appropriate route for new investments in Vietnam, and develop strategic plans for producing exported goods in Vietnam to be eligible to preferential treatments.
Trade facilitation
At the meeting, participants analyzed TPP and EVFTA’s challenges, such as: how to design and produce a product for both TPP and EVFTA, and even meeting requirements of other FTAs… Mr. Scherbey said the applied working and production process was also an important factor to determine the validity of goods. Companies must understand and correctly apply these complex ROO, exceptions of these agreements.
Nestor Scherbey also recommended, with the assistance of technical experts, companies should carefully study these rules and apply to exported products of their company. Besides, the authorities and businesses should spend considerable time, effort and expertise to be able to successfully implement and take advantage of TPP, EVFTA, and other FTAs. To achieve the highest preferential tariffs of FTAs, companies need to analyze each product, production process, and raw materials to determine the condition of products according to specific rules of each agreement. Provincial government should organize seminars, trainings in order for businesses to learn about what they should do to integrate into the global supply chain.
According to Nguyen Minh Tam, Deputy Director of provincial Tax Department, in 2016, the Department will continued to disseminate the Government's decrees and Ministry of Finance’s circulars for companies to promptly implement in their production; strengthen and improve the tax’s webpage. In addition, the sector will deploy online tax payment services, propose necessary policy amendments to General Department of Taxation…
At the conference, representatives of Department of Industry and Trade said, in recent years, the Department had implemented several programs to support activities SMEs. Particularly in 2016, the Department will continue deploy activities to assist SMEs in product development, application of modern machinery, green production, and accelerating international economic integration
Speaking at the conference, PPC’s Deputy Chairman Tran Thanh Liem stressed, through this conference, experts from VCCI and VTFA could provide accurate, specific information and solutions, coordination programs in line with provincial socio-economic conditions in order to create favorable conditions for investors in the province, help Binh Duong province to promote economic potentials for sustainable economic development.
Reported by Phuong Le – Translated by Ngoc Huynh