Firms must know global trade policy
Firms must know global trade policy
Firms are potentially missing out on key opportunities available beyond their immediate borders by focusing on trade policy developments on a regional scale, and showing lack of awareness when it comes to the broader global trade policy environment, according to an HSBC report.
According to the report, Navigator: Now, Next and How for Business, a majority of businesses appear to be ignoring or undermining the impact of important policies on their operations.
For companies in Viet Nam, only 31 per cent said the EU policy environment has had a positive impact on their business, while 66 per cent saw no impact.
The data was similar for the US policy environment (31 per cent for the EU and 60 per cent for the US), the two major markets for Viet Nam’s exporters.
Similarly, 74 per cent of respondents said the North-American Free Trade Agreement (NAFTA) has had no impact on their business.
A broad lack of awareness from businesses that have major trade and policy initiatives has put them at risk of missing out on significant international growth opportunities, according to the report.
Although many firms, especially in the services sector, would consider expanding to new markets to grow their business, many could end up losing their competitive advantage if they do not recognise how trade policy is re-shaping the world’s supply chains, and where the best opportunities lie for them in the next few years, according to the HSBC report.
The positive impact of initiatives that are ‘closer to home’, however, were more broadly recognised by the survey’s respondents.
China’s Belt and Road Initiative and ASEAN 2025 policies received the greatest vote of confidence from business leaders, 59 per cent and 56 per cent, respectively, in the Asia-Pacific region.
Seventy-four per cent of companies in Viet Nam said that ASEAN 2025 would have a positive impact on their business and 26 per cent saw no impact.
In addition, 50 per cent of survey participants in Viet Nam said the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) was relevant to their business.
Sixty-three per cent of Vietnamese companies cited CPTPP as having a positive impact on their business, while 35 per cent said there had been no impact.
Meanwhile, 46 per cent of firms in Asia-Pacific said the CPTPP trade deal was relevant for them and 48 per cent expected it to have a positive impact on their business.
Vu Tien Loc, chairman of the Viet Nam Chamber of Commerce and Industry (VCCI), said at a recent meeting that the CPTPP would be the backbone of international economic and trade commitments for Vietnamese businesses, despite some changes from its predecessor, the now-defunct Trans-Pacific Partnership (TPP) agreement.
The CPTPP is considered a better option for Viet Nam and 10 other partner countries, after the US departure from the TPP, he noted.
Conducted by HSBC Commercial Banking, the report examined sentiment and expectations towards international trade in 26 countries and territories, including Viet Nam, China, Hong Kong, India, the UAE, the UK and the US, among others.
