Businesses remain in dark about AEC formation
Businesses remain in dark about AEC formation
With less than four months before the ASEAN Economic Community (AEC) comes into force, most all of the nation’s small businesses still lack an in-depth understanding of the importance of the single regional market.
A recent survey by the Vietnam Chamber of Commerce and Industry (VCCI) finds that two-thirds of small businesses remain in the dark, with virtually no knowledge of the AEC.
Meanwhile only one in three has even a rudimentary grasp of the opportunities and challenges that regional trade liberalization will have on their companies’ operations.
As a result, they could lose out on many opportunities AEC market integration presents, while small family businesses and farmers potentially could be hit hardest by the stiff competition it brings.
Associate Prof Dr Nguyen Hong Son from the National Economics University of Vietnam says the same lack of understanding extends to other Free Trade Agreements (FTAs) for which Vietnam is a party.
Inadequate dissemination of information
Prof Son points out the survey of businesses in the agricultural, industrial and services industries shows those in agriculture, a group most likely to be negatively impacted, have the least understanding about regional integration.
Businesses in agricultural and manufacturing can expect opportunities to expand exports as a result of the AEC and FTAs, while retail and services businesses will see prospects to broaden business alliances.
Prof Son places the blame squarely on state managers whom he complains have failed to get necessary information effectively disseminated. As a result, businesses are neither fully cognizant nor adequately prepared to cope with the increased competition the trade deals spawn.
Urgent remedial action
Nguyen Van Sua from the Vietnam Steel Association suggests the government take immediate remedial steps to rectify the situation by organizing a series of regional seminars to get the word out.
He also proposes that the state set up small business help centres throughout the country to assist businesses and residents alike to get up to speed as rapidly as possible and maximize the benefits from integration.
Director Nguyen Thi Thu Trang of the WTO Centre asserts the demand for information by businesses is huge but the immediate problem to overcome is how best to quickly get the information out in the most efficient manner possible.
Most rural businesses and particularly those in agriculture and aquaculture remain deeply anxious over the lack of information they have received about the looming AEC formation.
The biggest challenges they will face is making sure their products can meet the import standards such as health and safety and certificates of origin for import into other countries.
These final few months in the lead up to the AEC are critical as businesses make final preparations before retail goods and services come flooding across the border at substantially lower prices.
Duong Hong Minh from the European Market Department under the Ministry of Industry and Trade (MoIT) highlights the fact that the MoIT has had limited success recently with several programs to disseminate information on signed FTAs.
Minh believes these programs could very well serve as a model for future use to disseminate information on international economic integration by the leadership of the Steering Committee for International Economic Integration.
