Chairman of Vietnam Chamber of Commerce and Industry (VCCI) said Vietnam’s companies seem not to be fully aware of potential of ASEAN market as well as incentives that ASEAN’s co-economic and technical operation channels offer.

Although ASEAN community is Vietnam’s big trading partner, economic links among its members in general and between Vietnam with other countries in ASEAN are fairly weak. Vietnam decides to take on commitments on lowering tariffs and opening market as few as possible and to delay the fulfillment of them as long as possible, which imperceptibly creates protectionism environment for domestic companies.

“This “protection” causes the lack of motivation to compete among Vietnam’s companies in increasingly fierce integrating environment and globalization. The ignorance of companies will make them subjective at the risk of fierce competition, even the risk of being swallowed even in domestic market, which brings about bad impacts to the whole economy. Because of this shortage, Vietnam’s companies seem not to pay much attention to design a regional trading strategy and even a global one,” explained Chairman VCCI.

A recent report of the Institute of World Economics and Politics (IWEP) shows Vietnam’s current average tariff rate for the Common Effective Preferential Tariff (CEPT) in the ASEAN Free Trade Area (AFTA) is 6.22%, nearly doubling that of ASEAN-10 (3.33%). The statistics also show nearly 20% of Vietnam’s tariff lines are at the rate higher than 5%. This leads to the effect that Vietnam’s market will flood with more and more goods from foreign countries because Vietnam’s non-tariff barriers are gradually being lifted according to the regional committed roadmap.

A new survey research done by ASEAN Secretariat and Vietnam’s Ministry of Trade (now named Ministry of Industry) also shows that Vietnam’s recent process of joining CEPT/AFTA has made import increase more quickly than export.

Increasing trade deficit with ASEAN and domestic companies’ ignorance not only make it impossible to take full advantages from ASEAN but also turn them into disadvantages for Vietnam’s economy.

Obviously, Vietnamese companies’ joining the process of establishing ASEAN’s economic community through two effective channels named trade and appealing investment is making big impacts on the speed of economic growth and poverty reduction.

However, “Vietnam still imposes many measures and non-tariffs barriers as well as trade barriers. Without a comprehensive adjustment, investment flow toward Vietnam will be moved to other countries,” an economist of the IWEP strongly warned.

Vietnam’s investment environment is improving and massive foreign investment is flowing into Vietnam. However, foreign investors are appealed not only by Vietnam market with more than eighty million people and more than one billion US Dollars of GDP but most of all its attraction stemming from the fact that business expenditure and transaction costs will fall by well integrating into ASEAN Economic Community (AEC). Possibly, the process of establishing AEC is offering Vietnam a “historic opportunity” to expand space for economic development.