2016 edition identifies key issues for Vietnam regarding trade and investment.
The European Chamber of Commerce in Vietnam has released the While Book 2016 - Trade / Investment Issues and Recommendations. This is the eighth issue of the tome.
In the introduction it’s written that 2015 was a determining year for Vietnam and its integration into the international arena. Starting with the implementation of key laws at the domestic level then the conclusion of negotiations in the EU - Vietnam Free Trade Agreement (EVFTA), the TPP, the ASEAN Economic Community (AEC), and the Vietnam - South Korea Free Trade Agreement, Vietnam enters 2016 with a promising framework that also sees many significant changes.
The TPP will have a particularly strong impact on Vietnam as it is estimated that within a decade its GDP will increase 11 per cent and as its economy relies on exports and trade with the US and with over 18.000 tariffs it is estimated that exports will rise 28 per cent, with a 50 per cent increase in clothing and textiles. As such, the White Book went on, Vietnam will be able to tap into new markets in which it does not yet have access. Nonetheless, many obstacles will also arise as the country will have to comply with new complex standards in packaging, labor conditions, design, and antibiotic residues, etc. Moreover, joining the TPP will force Vietnam to comply with new standards in labor unions and intellectual property rights (IPR) and remove preferential treatment for State-owned enterprises (SOEs), which will trigger changes in the overall economy.
The White Book mentions that from a regional point of view the first major change for Vietnam is the establishment of the AEC in January, which represents a key step for regional integration at all levels. According to a study by KPMG this year, the AEC is defined by four pillars: creating a single market and production base, increasing competitiveness, promoting equitable economic development, and further integrating ASEAN into the global economy. By integrating the region’s economies, the AEC will combine 600 million people and a GDP of $2.4 trillion. By allowing the free flow of goods, services, investments, and skilled labor, and the free movement of capital across the region, an Asian Development Bank (ADB) Institute study showed that with the establishment of the AEC the ASEAN region could see its per capita income triple by 2030 and therefore witness a strong improvement in the quality of life, reaching the same level as that of OECD countries.
In the recommendations section the White Book it states that Vietnam improving its training and education and its legal system governing the management of labor would help it meet the demand for a skilled workforce and promote a competitive and healthy investment environment for the transfer of knowledge and more generally for the development of the economy. A more flexible and simple visa policy is needed, by expanding the list of visa-exempt countries and introducing a true e-visa where visitors can obtain a visa online and use the print-out at the immigration desk upon arrival. It also believes that the current visa exemption period should be expanded from 15 to 30 days and that visitors be permitted to return within those 30 days if they can show their corresponding departure flight.