Imports from ASEAN economies have been flooding Vietnam’s market after efforts to cut taxes by regional countries to form a common ASEAN market while Vietnamese enterprises have not yet found a way to penetrate other ASEAN markets, local media reported.
Since the application of CEPT/AFTA, Vietnam has continuously incurred trade deficits with ASEAN members, said officials from the Ministry of Industry and Trade. Goods from Singapore, Malaysia and Thailand have been inflowing massively into Vietnam thanks to its high competitiveness and Vietnam’s offer of preferential tariffs at 0-5 per cent.
Vietnamese exporters said that enterprises from other ASEAN countries could sell their goods in Vietnam because they can get the support from state agencies in penetrating Vietnam market.
For example, Thai authorities can pay two third of total expenses to the companies which participate in the Thai trade fair in Vietnam. Moreover, some 10 trade fairs that take place every year in Thailand can receive financial support from the government.
While ASEAN goods flood Vietnam market, Vietnam’s exports cannot find their way to regional markets despite the preferential tariff.
Mr T, the owner of a small garment workshop in Ho Chi Minh City, said that he had abandoned the idea of making readymade apparel to export to ASEAN members as he cannot prove that 40 per cent of his products’ content is sourced from ASEAN countries.
Kinh Do Confectionary has been exporting its cakes to ASEAN, enjoying the preferential tax rates of 0-5 per cent for the past three years. However, the company is always facing difficulties in proving that its products contain 40 per cent of ASEAN-made materials, said Le Thi Thanh Thuy, Deputy General Director.
“We have to set up a separate division in charge of this. We always have to show lawful documents, and have our products inspected at the product quality inspection center before getting the C/O (certificate of origin) form D (form D is used for ASEAN exports).
Vuong Dinh Ngan, who is in charge of managing the exports and imports in HCM City under the Ministry of Industry and Trade, said that the state management agency will grant C/O form D within two or four hours. However, it always take more time than expected to fulfill necessary formalities as enterprises do not have specialized staffs.
Bui Huy Son, Deputy Director of the Multi-lateral Trade Policy Department under the ministry, acknowledged that as a big difficulty for Vietnamese enterprises to show the ASEAN content level of their products. Meanwhile, this is not really a barrier for other ASEAN enterprises, since they have advantages in production structure and technology.
The two-way trade between Vietnam and ASEAN bloc rose from US$3.49 billion in 1995 to US$18.9 billion in 2006, according to the GSO. However, Vietnam’s trade deficit with these countries climbed to US$6.18 billion in 2006 from US$2.26 billion in 2002. Vietnam often imports goods from ASEAN via Singapore due to low capacity of Vietnamese ships.
ASEAN now accounts for nearly 35 per cent of Vietnam’s total import turnover and 16 per cent of the total export market share. (VietnamNet, Vietnam Panorama)
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