Deputy Prime Minister Vuong Dinh Hue speaks at a forum held in Ha Noi on Tuesday. — Photo petrotimes.vn
The Government of Viet Nam persistently pursues the policy of comprehensive integration, with a focus on international economic integration in a proactive, pragmatic and politic manner, Deputy Prime Minister Vuong Dinh Hue said at a forum held in Ha Noi on Tuesday.
Hue said "Trade protectionism is now on the rise and seriously threatening the process of liberalisation and global economic integration.
"The wider and deeper integration into the global economy means Viet Nam will face more impact from regional and global economic development trends, and that is why the country needs a proactive and flexible approach to cope with this issue," he added.
Sudhir Shetty, Chief Economist for the East Asia and Pacific Region of the World Bank shared the ideas, saying that as a highly open economy and major trading partner of both the US and China, Viet Nam would be affected but these impacts should be manageable.
“Trade diversion could lead to Vietnamese exports replacing some Chinese exports to the US, and to a lesser extent, US exports to China,” he said.
He said Viet Nam should enhance its macroeconomic response to international financial and trade turbulences while strengthening national competitiveness with trade facilitation policies, improving the business environment, and strengthening the connectivity between foreign investment and domestic suppliers.
Furthermore, Viet Nam also needs extensive reform of trade and investment, including the simplification of non-tariff measures that distort trade as well as promote trade in services, deepen regional and global integration, and increase commitments to supporting the reform of the global trading system.
Deputy Minister of Industry and Trade Do Thang Hai said trade war between the US and China could make the world’s GDP growth decrease.
“Facing this situation, if the policy response is not flexible, Viet Nam may fall into decline economic growth,” Hai added.
He also said that because of the trade war, the challenges to sustaining reforms would be greater. It would be more difficult to tackle this challenge as cross-border e-commerce is more common and the risk of cyber-attack is higher.
“Viet Nam’s economic model and growth engine are heavily dependent on trade. Therefore, re-emerging protectionism would offer both opportunities and challenges for Viet Nam,” said Vu Minh Khuong, National University of Singapore.
He said Viet Nam would gain significant competitive edge against China in exporting goods to the US. The country is also capturing more strategic attention and interest from multinational companies and investors.
He suggested Viet Nam should be a leading player in embracing and promoting free and fair trade while avoid falling into the protectionism trap (especially in regulations related to infant industries and digital transformation). In addition, it should closely monitor the changing dynamics of the economy and its outlook.
In the past, Viet Nam has made progress in preparing for the new-generation free trade agreements (FTAs), including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) which was signed in March and ratified by the National Assembly in November to come into force early next year.
Viet Nam and the European Union announced the conclusion of the legal revision of the EU-Viet Nam Free Trade Agreement (EVFTA) and agreed to keep the Investment Protection Agreement (IPA) separate from the FTA in June in preparation for the signing of the deal.
Viet Nam has achieved certain outcomes in international economic integration, contributing to the national socio-economic development.
The total import-export turnover in 2018 is estimated at US$475 billion, of which exports are expected to reach $239 billion, a year-on-year rise of 11.2 per cent.
The country also sought to increase goods exports to traditional markets and find new ones. Exports to countries having FTAs with Viet Nam in 2018 have seen high growth compared to 2017 with preferential rates reaching about 40 per cent, a surge from 35 per cent in previous years, indicating that Vietnamese firms are increasingly focusing on optimising opportunities from the implementation of free trade deals. — VNS