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ASEAN Single Window teleconference held in Hanoi

Released at: 10:57, 25/07/2018

ASEAN Single Window teleconference held in Hanoi

Photo: WB

Teleconference on National Single Window and ASEAN Single Window chaired by Prime Minister on July 24.

by Doanh Doanh

Vietnam has successfully reduced trade tariffs but non-tariff and logistics costs remain high, with documentary compliance costs double those in other ASEAN countries. Mr. Ousmane Dione, Country Director for the World Bank (WB) in Vietnam, told a teleconference on the National Single Window and the ASEAN Single Window in Hanoi on July 24, chaired by Prime Minister Nguyen Xuan Phuc, that addressing non-tariff and logistics costs through an integrated policy framework, effective cross-sectoral coordination, and private sector partnerships will enhance Vietnam’s competitiveness.

According to the Ministry of Finance, eleven ministries and agencies have connected to and carried out 53 administrative procedures via the National Single Window. All customs procedures of the ministry are now processed through the National Single Window and up to 99.65 per cent of businesses conduct e-procedures at customs offices around the country.

Regarding the ASEAN Single Window, Vietnam officially joined the mechanism on January 1 and has exchanged 42,901 certificates of origin with four ASEAN member countries: Singapore, Malaysia, Indonesia and Thailand.

The two single windows have given a strong boost to administrative reform as they have helped cut costs and customs clearance times.

However, the number of e-procedures remains modest compared to the government’s target of 143 by the end of 2018.

Following the teleconference, relevant ministries and agencies will finalize and submit to the government a draft decree on accelerating the implementation of the National Single Window and the ASEAN Single Window, for approval by the end of this year.

According to the World Economic Forum, if all countries reduced supply chain barriers halfway to those in Singapore, global GDP could increase by 4.7 per cent or $2.6 trillion, and world trade by 14.5 per cent, or $1.6 trillion; far outweighing the benefits from the elimination of all import tariffs. Other research has shown that better logistics performance is associated with higher GDP growth and trade growth.

The World Bank’s Taking Stock report released in June showed that while Vietnam has made great progress in reducing tariffs, there remains significant potential to reduce trade costs through the rationalization of non-tariff measures or specialized controls, more efficient border management, and logistics.

Through various trade agreements Vietnam has cut tariffs significantly, with the average most-favored nation (MFN) tariff now in the range of 0 to 5 per cent for almost all tariff lines and commodities in targeted markets. In contrast and despite some initial progress, Vietnam’s non-tariff trade costs for both imports and exports remain relatively high and above the ASEAN-4 average. These costs are driven by compliance with specialized control regulations, border clearance procedures, port handling, transport, and logistics.

Costs analysis shows that for imports, the regulatory compliance with specialized controls is the most time-consuming (55 per cent of total time to import), while the highest monetary cost to import is for port handling (39.5 per cent of total cost to import). For exports, the highest time cost is for port handling (44 per cent of the total time to export), while the highest monetary cost component is also for port handling (33 per cent of the total cost to export). High time and monetary costs in port handling are caused mainly by extended inventories due to delays related to cumbersome border compliance. Given that Vietnam’s exports are largely characterized as low value-added (and most materials are imported for export), the importance of reducing time and costs to imports should be prioritized.

The government has focused on progressive improvements to the business environment and competitiveness to reach the ASEAN-4 average by 2020.

According to the WB’s recommendations, reducing costs of border compliance and specialized controls as well as logistics costs can be achieved by a comprehensive program comprising the following four pillars: trade facilitation; trade-related infrastructure and the quality of connectivity; building a competitive logistics service sector; and strengthening interagency coordination and partnership with the private sector.

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