Following the new Covid-19 outbreak in HCMC through communal transmission, businesses reimposed Covid-19 safety measures to limit the spread in the community, which consist of limiting face-to-face meetings, allowing employees to work from home, wearing face masks, postponing domestic business trips unless urgent. Early indications are that the outbreak has been contained. Those that came into contact with the infected were hurriedly whisked off to quarantine camps.
It’s noticeable that the online ASEAN Customs Transit System (ACTS) was officially launched on November 30 to accelerate trade in goods by road within Southeast Asia.
The past week spotlight
ASEAN customs transit system launched
Photo by Nhan Dan.
In 2017, ASEAN economic ministers set the twin goals of reducing trade transaction costs by 10 percent by 2020 and doubling intra-bloc trade between 2017 and 2025. ACTS has been developed to realise this goal to allow businesses to lodge e-transit declarations directly to ASEAN customs authorities and track the movement of their goods from loading to delivery.
Being developed with the support of the European Union, ACTS is simplifying the movement of goods across the region, making it more efficient and cost-effective.
Following trials in Cambodia, Laos, Malaysia, Singapore, Thailand, and Vietnam, the system has now been formally launched.
Vietnam and the UK are accelerating negotiations on a free trade agreement (FTA), with a view to signing the deal by year-end, according to Spokesperson of the Ministry of Foreign Affairs Le Thi Thu Hang.
Such a deal would ensure a more comprehensive bilateral cooperation in various spheres, especially economy and trade,” said Mrs. Hang at a press conference on December 3.
The spokesperson stated that Vietnam will give top priority to cooperative relations with the UK, especially as this year marks 10th anniversary of the UK – Vietnam strategic partnership.
3. Sweden proposes $2-billion credit for aviation development in Vietnam
Swedish financial institutions have proposed a $2 billion commercial loan to develop aviation projects in Vietnam, including the Long Thanh International Airport.
The funding will also cover the building of a third passenger terminal at HCMC’s Tan Son Nhat International Airport.
During Prime Minister Nguyen Xuan Phuc’s visit to Sweden in May 2019, the two countries had discussed a potential credit line of over $1 billion for the development of aviation projects in Vietnam, Swedish Ambassador to Vietnam Ann Mawe said at a Saturday meeting with Minister of Transport Nguyen Van The that
4. Vietnam amends intellectual law following big trade pacts
The 2005 IP Law was amended in 2009 after Vietnam had become a member of WTO in 2007; and it was later amended in 2019 after Vietnam signed big trade pacts, such as the European Vietnam Free Trade Agreement (EVFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
The 2020 draft amendment includes comprehensive revision and/or supplement of 80 articles (including 13 new articles added to the current IP Law), covering the following: (1) General regulations; (2) Copyright and related rights; (3) Industrial property (patent, design, trademark, geographical indication); (4) Plant variety; and (4) Enforcement.
5. Gov’t commits to gaining 2.5%-GDP growth target
The Vietnamese government is committed to ensuring the GDP growth target of 2.5 – 3% for this year, stressed Prime Minister Nguyen Xuan Phuc at the monthly government meeting on December 2.
Among other key economic indicators, Mr. Phuc said the inflation rate is on track to stay below the 4% target, given the average consumer price index (CPI), a gauge of inflation, expanding by 3.51% year-on-year in the first 11 months of this year.
Total goods retail sales and services revenue along with industrial production are recovering, thanks to growing demand in final months of the year, he noted.
6. Vietnam to resume economic activities with countries having Covid-19 vaccines
Vietnam should prepare methods to resume trade and investment activities with countries having Covid-19 vaccines, while pushing for international cooperation in vaccine distribution to high risk areas.
This is among solutions put forth by Minister of Planning and Investment Nguyen Chi Dung at a government’s monthly meeting on December 2 to aid the country’s efforts in realizing its socio-economic development goals in 2020.
"Government agencies should closely monitor the pandemic situation globally, and strictly carry out anti-Covid-19 measures under the instruction of the National Steering Committee on Covid-19 Prevention and Control," Mr. Dung said.
7. RCEP offers greater flexibility for Vietnam in exercising rules of origin
Vietnamese exporters might find it easy to meet the required rules of origin for their products as a significant portion of its production input is sourced from China and South Korea.
One of the most important benefits from the Regional Comprehensive Economic Partnership (RCEP) for Vietnam over existing free trade agreements (FTAs) is that the former offers greater flexibility on the use of raw materials sourced from member countries, according to Viet Dragon Securities Company (VDSC).
Specifically, the RCEP does reduce complexity and compliance costs for Vietnamese exporters through a single rulebook that covers the other 14 RCEP markets, stated VDSC in its latest report.
8. Business formations in Vietnam rise 7.3% m/m in November
Vietnam’s successful realization of the dual target in containing the Covid-19 pandemic and boosting economic recovery has led to further increase in new business formation by 7.3% month-on-month in November and 6.7% year-on-year to 13,100, according to the General Statistics Office.
Notably, this month has witnessed a surge of 72% month-on-month in combined registered capital to VND284.8 trillion (US$12.34 billion) and 65.3% in the number of workers hired by new enterprises to 119,700.
The number of newly-established enterprises in Vietnam in the first eleven months of 2020 was 124,300 with registered capital of a combined VND1,878.9 trillion (US$81.46 billion), down 1.9% in number but up 19.3% in registered capital year-on-year. Average registered capital per newborn enterprise was VND15.1 billion (US$654,695) during this period, up 21.7% year-on-year.
10. Textile and garment exports to hit US$34 billion in 2020
This year will be the first year that Vietnam’s textile and garment sector sees export declines after 25 consecutive years of growth, mainly due to the COVID-19 pandemic.
According to the Ministry of Industry and Trade (MOIT), 2020 has been a particularly difficult year for Vietnam’s textile and garment industry as the market has suffered complicated and unpredictable fluctuations. The COVID-19 pandemic is developing in the US market and several European markets, causing difficulties for the Vietnamese textile and garment sector due to the shortage of export orders in the final months of this year.
Vietnam posted total textile and garment export revenue of US$26.73 billion in the first 11 months of this year, down 10.5% over the same period last year.
On 18 June 2021, the Ministry of Finance issued Circular 45/2021/TT-BTC (“Circular 45”) providing guidance on the implementation of Article 41 of Decree 126/2020/ND-CP (“Decree 126”) dated 19 October 2020 of the Government on the application of the Advance Pricing Agreement (“APA”) on tax administration for companies having transactions with their related parties.