HA NOI (Biz Hub) — Craft villages, a non-competitive and vulnerable part of Viet Nam's economy, will face greater challenges upon the establishment of the ASEAN Economic Community (AEC) at the end of 2015.

The AEC will effectively eliminate the majority of tariffs across the region, leading to significant pressure from mass imports and a risk that Vietnamese products may lose out in the domestic market.

Speaking about the difficult outlook at a recent forum, Vu Quoc Tuan, chairman of the advisory council at the Viet Nam Craft Villages' Association, put forward a number of suggested measures.

He emphasised the necessity of enterprises operating in craft products to have basic knowledge of the AEC. A survey of domestic firms conducted by the Ministry of Planning and Investment discovered that 76 per cent of them were completely unaware of the AEC.

The transition is more likely to produce positive outcomes if affected businesses research rival products and drastically prioritise enhancing their product quality, he said.

Tuan also pointed to the small scale of primarily family-run production facilities in craft villages nationwide and underscored the importance of connecting facilities to improve overall sector competitiveness.

At the forum, the Viet Nam Fatherland Front Central Committee and the Viet Nam Craft Villages' Association called for additional State incentives and favourable policies that facilitate the development of traditional businesses.

A round-table talk is expected to take place at the end of March between the Viet Nam Craft Villages' Association and the Ministry of Industry and Trade, the Ministry of Finance and others to review the implementation of policies on craft village development and to seek related solutions. — VNS