Vietnam hopes for expanded market after joining AFTA
Vietnam pins its hope on an expanded market once it becomes part of the ASEAN Free Trade Area (AFTA) in 2006, according to Deputy Minister of Trade Luong Van Tu.
"The most obvious benefit for the country when it fully implements the Common Effect Preferential Tariff (CEPT) regime under the AFTA scheme is to broaden outlets for locally-made products," the deputy trade minister said.
After six years of implementing the CEPT regime, Southeast Asia has become one of Vietnam's main export markets that include the European Union, Japan, and the United States, Mr Tu added.
He predicted that actual trade value between Vietnam and ASEAN will not be much affected by the implementation of the AFTA scheme in the near future.
The country's export items, mainly rice, crude oil, footwear, textile and garments, rubber and seafood, that are subject to the CEPT scheme account for almost 20% of its total export earnings from the ASEAN market and 3.3% of its total export value in 2001.
About joining the AFTA, Mr Tu pointed to the fact that the Vietnamese government has reduced tariffs for more than 5,500 commodity items or almost 85% of the projected total covered by the CEPT.
Another 760 items will be transferred from the Temporary Exclusion List to the Inclusion List (IL) under the CEPT on January 1, 2003, he added.
About 96% of Vietnam's total commodity items have been enjoying tariff reduction, Deputy Minister Tu noted.
A number of locally-made items that are enjoying trade protection will have to face equal competition in 2006 when the country fully integrates itself into AFTA, Mr Tu said. He added that the current tariff rates of 40-50% for a number of imported products will be reduced to 15-20% and 0-5% in 2006.
The trade deputy minister, therefore, warned local businesses of increasing pressure and difficulties.
The government, for its part, should promptly reform its legal system and policies in conformity with international commitments it has made and to encourage domestic production, Deputy Minister Tu recommended.
He also called on local businesses to be more active in defining their own development orientations so as to be able to make full use of opportunities offered by the process of regional integration. (VNA)
