Non tariff policies of asean and implications for vietnam

639 NON TARIFF POLICIES OF ASEAN AND IMPLICATIONS FOR VIETNAM CHÍNH SÁCH PHI THUẾ QUAN CỦA CÁC NƯỚC ASEAN VÀ HÀM Ý CHO VIỆT NAM Tran Viet Thao, PhD Nguyen Thi Phuong Ly, MA Thuongmai University Abstra[.]

NON-TARIFF POLICIES OF ASEAN AND IMPLICATIONS FOR VIETNAM CHÍNH SÁCH PHI THUẾ QUAN CỦA CÁC NƯỚC ASEAN VÀ HÀM Ý CHO VIỆT NAM Tran Viet Thao, PhD Nguyen Thi Phuong Ly, MA Thuongmai University Abstract After the ASEAN Economic Community (AEC) was formed in late 2015, ASEAN basically became a common market, comprising about 600 million people, with a total GDP of nearly US $ 2800 billion, creating a relatively synchronous production space, helping promote the common advantages of the ASEAN region With the power of 10 Southeast Asian countries together with the removing of tariff and non-tariff barriers, a vast market has opened up for Vietnamese businesses in commodity exchange and trade, attracting investment and participating more deeply in regional supply chains Goods, services, capital, investment and skilled labor will be freely circulated within ASEAN without any discrimination among members Participating in the process of building this community, Vietnam has more opportunities to access markets inside and outside the region, thereby expanding markets, diversifying exports; stabilizing import sources and lowering import input prices, thereby contributing to economic restructuring and realization of socio-economic development goals Keywords: ASEAN, AEC, Non-Tariff, Import and Export Tóm tắt Từ khóa: ASEAN, AEC, Phi Thuế Quan, Xuất Nhập Khẩu 639 Introduction The establishment of the ASEAN Economic Community (AEC) in 2015 is a landmark achievement in the ASEAN economic integration agenda The AEC is meant to facilitate the free flow of goods, services and investments, as well as the flow of skilled labor and capital The AEC promotes integration, competition, enhances connectivity, specialized cooperation, creates a balance and brings the ASEAN region deeper into the global economy Therefore, AEC is the most valuable achievement of the ASEAN region, because it includes not only economic growth but also integration on the political, social and cultural pillars of all members AEC's remarkable achievements so far can be clearly seen by eliminating tariffs on 99% of goods traded in ASEAN-6 countries (Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand) CLMV countries (Cambodia, Laos, Myanmar and Vietnam) have also made significant progress Tax rates in Vietnam have been reduced to 0-5% on about 90% of tariff lines and more must be done to take full advantage of AEC's potential Nontariff barriers (NTBs) to trade continue to maintain a strong presence in the ASEAN region - according to the World Trade Organization (WTO), nearly 2,500 NTBs are currently being implemented The study focuses on analyzing non-tariff policies of ASEAN countries since then, with implications for Vietnam, the study also shows Vietnam's achievements in trade and investment in ASEAN integration The study also points out the advantages and disadvantages in this organizational input process This study is based on a qualitative research perspective through analytical method that describes statistics and comparisons Data sources used in the study are mainly secondary data from World Bank, Asean Secretariat, UNCTAD, etc Overview of ASEAN economic situation The Association of Southeast Asian Nations (ASEAN) was established on August 8, 1967 in Bangkok, Thailand, with the signing of the ASEAN1 Declaration (Bangkok Declaration) The declaration was signed by the founding members of ASEAN, namely Indonesia, Malaysia, Philippines, Singapore and Thailand, also known as ASEAN-5 Brunei Darussalam joined the association on January 7, 1984, followed by Vietnam on July 28, 1995, Lao People's Democratic Republic (PDR) and Myanmar on July 23, 1997 and Cambodia on April 30, 1999, forming today are ten ASEAN member states (AMS) or ASEAN-10 The following four countries: Cambodia, Laos, Myanmar and Vietnam are also known as CLMV countries The ASEAN Economic Community (AEC) was formally established on December 31, 2015, including the ASEAN Political Security Community, the ASEAN Economic Community and the ASEAN Socio-Cultural Community Over the next ten years, ASEAN integration will be guided by the 2025 ASEAN Community Vision and three corresponding 2025 Community Blueprints also known as ASEAN-5 ACE is a regional linkage model based on ASEAN's existing economic links with 640 key features such as: (i) AEC connects 11 areas where ASEAN has competitive advantages: agriculture, timber and wooden products, textiles, electronics, rubber, cars, footwear, tourism, transportation and aviation (ii) AEC has innovations on tariffs, nontariff measures, customs procedures, competition policy, intellectual property, services, investment, environment, labor market and human resource development (iii) AEC includes many bilateral and multilateral agreements (iv) It is expected that by 2025, AEC will further promote economic development in the region and create 14 million new jobs Figure 1: Year of accession of each country to ASEAN Hình 1: Năm gia nhập quốc gia vào ASEAN Sources: Celebrating ASEAN: 50 Years of Evolution and Progress (2017) Economic progress in Asean The disruption in global trade due to trade tensions reduced global GDP growth in 2018 to 3.6% and weakened the forecast for 2019 to 3.0%, for 2020 to 3.4% (See Table 1) Financial risks caused by non-government sector debt and the company's default debts are also causing global economic instability Growth in both the Euro Area and Japan was censored For the Euro Area, lower growth was due to industrial adjustment, ??? pressure and Brexit uncertainty, while for Japan, this was a faint trade and disaster industry The US economy, on the other hand, strengthened, driven by consumption and industrial production, although trade also decreased However, the outlook based on the US yield curve shows an economic slowdown While there are some signs of moderation, growth in Asia remains strong Within ASEAN, economic growth in 2018 remained strong at 5.2%, driven by strong domestic demand and investment In the context of slowing trade growth, the implementation of major infrastructure projects and national elections in a number of countries are expected to significantly support the regional economy 641 Table 1: Growth of gross domestic product (GDP), in% Note: Growth rates of GDP in constant prices p - preliminary, f - forecast Sources: ASEAN Secretariat (November, 2019) for ASEAN and ASEAN Member States (AMS) up to 2018 except for Cambodia (2018) and Myanmar (2018) and ASEAN preliminary estimate 2018; Asian Development Bank (April 2019) for ASEAN preliminary estimate 2018, and forecasts for ASEAN and AMS for 2019 and 2020; International Monetary Fund (April 2019) for all others Foreign direct investment and trade After a long period of modest, global trade recovery in 2017 proceeded to 2018, albeit at a weaker pace (See Table 2) The outlook for 2019 is still uncertain, awaiting the results of trade negotiations between the US and China The recent tension of trade tensions has increased risks, with the US imposing a 25% tariff on imports worth billions of dollars from China, and China has announced plans to retaliate its tariffs on US $ 60 billion worth of products, effective from June 1, 2019 Preliminary estimates of trade in goods in ASEAN show moderate growth of 8.1% in 2018, from 15.0% in 2017 Singapore has maintained its trade momentum, while notable extensions have been observed in Laos and Brunei Darussalam In services, preliminary estimates show stronger trade in services, with an upward trend observed across all ASEAN member states Meanwhile, global FDI continued to decline, down 13.4% in 2018 Capital inflows into advanced economies decreased significantly by 26.7% compared to the same period last year, due to US multinational businesses moved to America FDI to emerging and developing economies, on the other hand, increased by 2.2% compared to the previous year For ASEAN, capital flows improved by 5.3% to reach USD 151.2 billion in 2018 642 Table 2: Growth of trade and foreign direct investment (FDI), in % Note: * Based on UNCTAD data excluding Brunei Darussalam, Cambodia and Lao PDR Sources: Trade: UNCTAD International Trade Database (April 2019); FDI: UNCTAD World Investment Report (June 2019); ASEAN Figures: ASEAN Secretariat (May 2019) Non-tariff measures in international trade Non-tariff measures (NTMs) include measures that change international trade conditions, including trade restrictive policies and regulations, as well as policies that facilitate trade NTMs are often incorrectly referred to as non-tariff barriers (NTBs) The difference is that NTMs include wider measures than NTBs These measures are issued by the Government in a discriminatory manner to give priority to domestic suppliers over foreign ones In the past, NTMs were mostly a form of quotas or export restrictions, so the word "barrier" was often used However, up to now, policy interventions have taken more forms and accordingly, the term "measure" is used instead of "barrier" to emphasize that such measure may not necessarily reduce trade or benefit The United Nations Conference on Trade and Development (UNCTAD, 2010) defines: “NTMs are policy measures other than ordinary customs tariffs that can potentially have an economic effect on international trade in goods, changing qualities traded, or prices or both.” Non-tariff policies and measures include all trade costs related to policies arising from production to final consumption, except for tariffs NTMs are classified according to technical measures (sanitary and phytosanitary standards, technical barriers to trade and pre-shipment inspection) and non-technical mesures These measures are more clearly distinguished by hard measures (such as price and quantity control measures), threats (such as anti-dumping and safeguard measures) and other measures such as finance related to trade and investment In fact, NTMs have the ability to "distort" international trade, whether the trade effects of the measures are protectionist or not In order to identify and distinguish NTMs, detailed classification is needed In addition, to facilitate data collection and analysis, NTMs are grouped into different groups such as hard measures, threat measures, sanitary and phytosanitary standards (SPS), technical barriers to trade (TBT), and others Each of these groups includes different types 643 of NTMs According to UNCTAD, NTMs are classified into chapters, depending on the scope and characteristics of each non-tariff measure Each chapter is divided into small groups to allow the classification of regulations affecting trade Accordingly, NTMs are classified into 16 chapters (A to P; see Appendix) and each chapter is divided into groups with depth up to three levels (1, and digits) Although some chapters achieve a 3-digit classification, most stop at digits All chapters reflect the importing country's requirements for goods imported into that country, with the exception of measures for export (chapter P) Table 3: International Classification of NTMs Source: UNCTAD, 2016 Non-tariff policy of ASEAN countries Since the financial crisis and economic recession originated in the US in mid-2008, trade protectionism with trade restrictive measures have been used by many countries, including groups of developed and developing countries This makes the process of economic recovery and international trade development more difficult 644 Figure 2: Number of non-tariff measures in force in WTO member countries as of December 31, 2019 Anti dumping [ADP], Countervailing [CV], Quantitative Restrictions [QR], Safeguards [SG], Sanitary and Phytosanitary [SPS] [Ordinarias, Urgentes], Special Safeguards [SSG], Technical Barriers to Trade [TBT] [Medidas regulares], Tariff-rate quotas [TRQ], Export Subsidies [XS] Figure shows that Asia is the region that uses the most non-tariff measures, with a total of non-tariff measures including TBT, SPS, ADP, CV, SG, SSG, QR, TQ, and ES equivalent to 14,172 measures; this is also the area where SPS, TBT, ADP, SG and QR measures are used the most Countries in South and Central America use the second most non-tariff measures with a total of 10,470 measures; countries in North America and EU use non-tariff measures with a total of 9,460 and 7,951, respectively rank the third and the fourth Currently, the EU is the region with the most effective number of TRQ measures out of all regions in the world Countries in the Africa region use the smallest number of non-tariff measures, 4,765, less than the Middle East countries, which currently use 6,301 measures Among the 10 ASEAN countries, Thailand, Philippines, Indonesia, Malaysia, Singapore and Vietnam are the countries that use many non-tariff measures in the trade protection policy The remaining countries such as Brunei, Myanmar, Cambodia, and Laos are the ones that rarely use non-tariff measures These countries use less than 10 SPS and TBT measures, especially have not used trade remedies nor tariff quota Below are some basic characteristics of the use of non-tariff measures in the trade policies of some typical ASEAN countries in terms of the number of non-tariff measures used 645 ... (2018) and Myanmar (2018) and ASEAN preliminary estimate 2018; Asian Development Bank (April 2019) for ASEAN preliminary estimate 2018, and forecasts for ASEAN and AMS for 2019 and 2020; International... Below are some basic characteristics of the use of non- tariff measures in the trade policies of some typical ASEAN countries in terms of the number of non- tariff measures used 645 ... in South and Central America use the second most non- tariff measures with a total of 10,470 measures; countries in North America and EU use non- tariff measures with a total of 9,460 and 7,951,