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ASEAN-China FTA makes Vietnam-China trade easier and better

(Xinhua)
Updated: 2010-01-01 14:07
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The establishment of the Free Trade Area (FTA) between China and ten member states of the Association of Southeast Asian Nations (ASEAN) makes Vietnam's trade with China easier and better, said Doan Duy Khuong, Vice Chairman of the Vietnam Chamber of Commerce and Industry (VCCI) in Hanoi?on Thursday.

In an exclusive interview with Xinhua?in Hanoi, capital of Vietnam?on Thursday, Khuong said that Vietnam, as an ASEAN member, is expecting both opportunities and challenges brought about by the FTA.

Scheduled to take effect as of January 1, 2010, the ASEAN-China FTA includes China and ten Southeast Asian countries namely Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

The FTA is expected to become world's third largest free trade area with a combined population of 1.9 billion and a combined gross domestic product (GDP) close to $6 trillion.

Khuong said that FTA means tariff reduction and simplification of administrative procedures such as customs and investment licensing. Therefore, Vietnamese products will have better access to the Chinese market and vice versa.

For Vietnam, China has become a leading trade partner as statistic figures show, according to Khuong. In 2009, bilateral trade between the two countries is estimated at roughly $20 billion. Trading with China has been of great significance to Vietnam so far, said Khuong.

Khuong said that under the FTA scheme, tariff will be lowered, therefore helping reducing the illegal trading along the border between China and Vietnam.

The FTA will also make cooperation among Vietnam, China and other ASEAN members in production of a particular product become easier, said Khuong.

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Countries within the FTA can produce different parts of a product based on their strength so that consumers could enjoy a higher-quality but lower-cost finished product. The cooperation in the manufacturing process would not only help businessmen tap the markets of China and ASEAN countries, but also pave the way for them to enter other markets such as the European Union and Africa.

However, FTA brings tougher competition for Vietnamese companies as there are similarities in manufacturing products between Vietnam and the other countries within the FTA.

Level of competition would be different in various sectors, according to Khuong.

Though, competition would do good to both Vietnamese manufacturers and consumers, Khuong said. Competition makes companies have to improve themselves to produce better products and therefore consumers benefit from that.

Next year, Vietnam will hold the ASEAN Chairmanship, Khuong said. The country will make efforts to improve the connection between ASEAN and China and bring cooperation to a new height. Therefore, it would promote the implementation of the ASEAN-China Free Trade Area.

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