Research objectives: Overviewing scientific works relating to development of trade relations between Viet Nam and SACU countries, issues had been researched, identifying issues have not been or not deeply been then decide to further research in this thesis. This thesis will theoretically and practicially resarch international trade in general and trade relations between a country and member countries of a customs union in particular. Analising and evaluating trade policies and measures have been implemented to develop trade relations between Viet Nam and SACU countries; current situation of trade exchange between Viet Nam and SACU countries; analising prospects and proposing viewpoint, orientation and measures to develop trade relation between Viet Nam and SACU countries up to 2020 and vision to 2030.
1 INTRODUCTION 1. Reason to choose the thesis Expanding and diversifying trade relations between Viet Nam with all partners is an important task to implement external economic policies of the Party and Government The Social and Economic Development Strategy for 20112020 approved by the XI Congress of the Party laid out instruction: “Diversifying foreign markets, effectively exploiting the markets that have free trade agreements and the markets that have potentials for increasing exports…” The Strategy of Import and Export for 20112020 with orientation to 2030, issued in the Decision 2471/QDTTg dated 28/12/2011 The strategy laid out instruction for developing the markets, emphasized on “diversifying export markets; enhancing and expanding the share of Viet Nam’s goods in traditional markets; creating a breakthrough in developing new export market that have potentials”. For the Africa market, the strategy set a target that this market should account for 5% of the country’s total exports by 2020 In order to implement these policies and orientations, Viet Nam have to decrease its level of independence to a small number of markets, it should actively expanding export markets, including the due attention to new markets like Africa. In the context of globalization, high degree of competition for new markets, it is needed to have regular and updated studies on the Africa market Africa including 55 countries. Each country and regional market have their own characteristics that need to be studied carefully Among regional economic organizations in Africa, the Southern Africa Customs Union (SACU) is the most successful one in Africa and it is also the locomotive for economic development of the continent. SACU was established in 1910 and is the first customs union in the world. It now has five members, namely South Africa, Botswana, Lesotho, Namibia and Swaziland. The SACU’s countries market is appreciated with high potentials for stable economic growth, huge and diversified demand of goods, mainly the products that have reasonable quality and price. In addition, the political stability of the SACU countries; preferential trade given by the US and EU to products of SACU countries as well as attracting policies for FDI that made SACU region to be an attention of many countries in the world SACU region is a new market for Vietnamese enterprises Trade exchange between Viet Nam and SACU is still limited. In 2014, the twoway trade was USD 1.014 billion, of which exports was USD 814 million and imports was USD 200 million. The main reason for the limitation of trade exchange between Viet Nam and SACU countries is that the government and the enterprises of Viet Nam do not have effective measures to enhance and develop trade relations with these countries Therefore, studying the thesis Measures to develop trade relations between Viet Nam and member states of the Southern Africa Customs Union (SACU) will contribute scientific ground for the working out policies, macro and microlevel measures to enhance trade exchange between Viet Nam and SACU up to 2020 and vision to 2030. This is the reason for choosing the thesis 2. Study objectives and tasks * Study objectives: The study objectives of this thesis are identifying viewpoint, orientation and measures at institution and entity levels in developing trade relations between Viet Nam and SACU countries * Study tasks: Overviewing scientific works relating to development of trade relations between Viet Nam and SACU countries, issues had been researched, identifying issues have not been or not deeply been then decide to further research in this thesis This thesis will theoretically and practicially resarch international trade in general and trade relations between a country and member countries of a customs union in particular Analising and evaluating trade policies and measures have been implemented to develop trade relations between Viet Nam and SACU countries; current situation of trade exchange between Viet Nam and SACU countries Analising prospects and proposing viewpoint, orientation and measures to develop trade relation between Viet Nam and SACU countries up to 2020 and vision to 2030 3. Study subjects and scope * Study subjects: Thesis will focus on theoritiall and practical issues on developing trade relations between Viet Nam and SACU countries * Study scopes: Researching content: Thesis focus on theoritial issues about on development of trade relations between countries; Study implementation of policies and measures to develop trade relations between Viet Nam and SACU countries and propose solutions for further enhancing these relations Researching time: Thesis will be studied about status of development of trade relations between countries, mainly trade in goods, between Viet Nam and SACU countries from 1992 upto now and submit solutions to 2020 with vision to 2030 4. Study methods * Method using primary data Beside using theoretical study at desk for international trade, this thesis investigate realities, like policy makers, staffs involved in trade promotion, representatives of enterprises and consumers in Viet Nam and SACU countries. * Method using secondary data This thesis has collected scientific works, thesis’s, books, newspapers relating to international trade and trade development between Viet Nam and SACU countries to research using chosen, analyzed, evaluated, summarized methods 5. The new findings of the thesis: Theoretically, thesis has summarized and analyzed the development of trade relation between a country on one side and the member countries of a customs union on the other side; clarified contents, forms, criterions of assessment and affecting factors of this relation. Practically, this thesis has researched experiences of China and India about the development of their trade relations with the member states of SACU, then found out successful lessons that Viet Nam can lean and also the failures that should be avoided. Analyzed and assessed trade policies and measures that have been implemented to develop trade relation between Viet Nam and member states of SACU; the current situation of trade exchange between Viet Nam and SACU countries, its succesfull outcomes as well as limitations and the reasons. This thesis also forecasted the context and prospect of the development of trade relation between Viet Nam and member states of SACU. Finally, the thesis has submitted some measures to develop trade relation between Viet Nam and member states of SACU, including means to push the exchange of goods between the two sides, creating favorable conditions for the enterprises to access the market and increase the competitiveness of the exports of Viet nam in SACU countries OVERVIEW ON RESEARCHING SITUATION * The foreign studies There are several foreign studies relating to SACU countries, like Colin Mc Carthy’s The Southern African Customs Union; Gerhard Erasmus’ New SACU Institutions: Prospects for Regional Integration; Carine Zamay Kiala’s The Politics of Trade in the Southern African Customs Union: Prospect of a SACUChina Free Trade Agreement; Debesh Bhowmik’s Regional Integration in Africa: a case study of SACU; WTO Trade Policy Review of the Southern African Customs Union; Sukati Mphumuzi’s The Economic Partnership Agreements (EPAs) and the Southern African Customs Union (SACU) Region – The Case for South Africa These studies show the creation and developments of SACU, its economic development, trade policies and trade relations with some countries in the world However, all of these studies do not directly mention the trade relation between Viet Nam and SACU countries * The domestic studies In Viet Nam, up to now there are several studies on Africa market, which mention the SACU countries, mainly to South Africa, including: Tran Thi Lan Huong’s Economic Reform in South Africa during 19942004; Nguyen Van Thuong et. al. – Measures to develop trade relation between Viet Nam and Africa; Ministry of Industry and Trade’s – Measures to develop trade relations with some countries in Africa; Measures to increase export to the Africa market; Studying measures to increase exports of industrial goods to the Africa market These studies have issues relating to Africa, the market of Africa, SACU countries, economic and trade relations between Viet Nam and African countries Each study, with its own way of approach, at different level, had mentioned trade relation between Viet Nam and SACU countries but none of these studies entirely work with the issue of measures to develop trade relation between Viet Nam and SACU countries Therefore, it can be seen that developing trade relation between Viet Nam and SACU countries is a new issue, that is needed to be studied entirely Chapter 1 THEORETICAL AND PRACTICAL BASIS FOR DEVELOPMET OF TRADE RELATION BETWEEN A COUNTRY AND MEMBER STATES OF A CUSTOMS UNION 1.1. Theoretical basis for trade relation between countries 1.1.1. Overview of theories of international trade relations 1.1.1.1. Theoretical basis for international trade International trade is defined as activities of exchanging, selling and buying goods, services, investing between countries and territories Classical theories of international trade starts with mercantilism, follewed by theory of absolute advantage of Adam Smith and theory of comparative advantage of David Ricardo. Since early 1900, new therories of international trade arose. They were called new trade theories, including theory of factor endowments by Heckcher – Ohlin, theory of national comtitiveness advantage by Michael Porter, theory of product cycle life of Raymond Vernon and theory of global value chain 1.1.1.2. Theory of international trade policy International trade policy is a system of regulations, tools and measures that the governments implement to regulate its international trade activities during a given period of time in order to achieve the determined targets The targets of international trade policy of a country and be different at each period, however, they all aim at taking use of national comparative advantage, support the development of domestic production, increase the competition and expand to the international markets Theory of international trade policy is the theory relating to the intervention of a government to reach a certain goal in international trade These policies include policy of free trade and policy of trade protectionism. The tools and measures of the goaled policy (to increase or to limit trade) include economic, technical and administrative ones. They are usually divided into tariff and nontariff policy 1.1.2. Characteristics of international trade relations of a custom union International economic integration is an irreversible trend with the level of integration getting more tighten According to Balassa, there are five levels of international economic integration, from low to high: (i) Free Trade Area (FTA); (ii) Customs Union (CU); (iii) Common Market; (iv) Economic Union and (v) Comprehensive Economic Union In institution perspective, regional economic integration is described as activities of the governments to liberalize or facilitate trade on regional basis between two or more countries A customs union is defined as a regional economic organization, in which member countries agree to eliminate trade barrier among its members and accept a common external trade policy The Southern Africa Customs Union is the first customs union in the world, established in 1910 Argument on customs union studies economic effects in the customs union’s states of movement and rest. The main arguments are: Firstly, a customs union has trade creation effect and trade diversion effect Secondly, economic benefit of a customs union is determined by the difference in tariff rates and the similarities of the imports and exports of the member countries before the establishment of the customs union. Thirdly, the establishment of a customs union can also create the effect of economic dynamic 1.2 Contents, forms, criterions of assessment and affecting factors of trade relation between a country and the member countries of a customs union 1.2.1. Contents and forms of development of trade relation In principle, development of trade relation is carried out at two levels, namely institution level and entity level At institution level, international trade having the participation of nations and public entities can be referred as international relations at the level of trade policies, like policies of tariff and nontariff, economic integration… of a country; or the choice of integration at the global, regional, bilateral or unilateral level in trade cooperation; or the relation between the implementation of international commitments and domestic laws The major stakeholders of this international trade relations are states and international economic institutions At institution level, the contents of trade relations including: Joint governmental relations on trade; Negotiation and signing of bilateral and multilateral trade agreements; Cooperation on trade promotion and facilitation at macro level; Mechanism for trade dispute settlements At entity level, the major stakeholders of international trade are entrepreneur, comprising persons and enterprises In present, expanding business abroad of an enterprise usually aiming at increasing its revenue and profit, creating new markets, heighten the position of the enterprise at international level or to secure its inputs The contents of developing trade relations between a country and member countries of a customs union comprising of: Firstly, developing trade in goods. Secondly, promoting trade in services. Thirdly, enhancing investment cooperation 1.2.2. Criterions of assessment for development of trade relation Within the scope of study, the thesis will mainly study trade in goods and the assessment will be at institution and entity level The criterions of assessment for the development of relation at institution level are: i) The number and level of joint governmental relations on trade; ii) The number and level of bilateral and multilateral trade agreements had been signed; The number of activities of trade promotion and facilitation cooperation at macro level; The number and level of mechanisms for trade dispute settlements At entity level, the development of trade relation between a country and member countries of a customs union can be assessed by the quantitative criterions, including: i) Export and import turnover; ii) Trade balance; iii) Composition of imports and exports; iv) Composition of import and export markets; v) Growth rate of imports and exports 1.2.3. Affecting factors of development of trade relations 1.2.3.1. Objective factors The economic powers are locomotives and have playing roles of the international trade relations Beside the developed economies like the US, EU , Japan… the role of emerging economies like BRICS countries (including Brazil, Russia, India, China and South Africa) are getting more important The multinational corporation dominate the world economy in general and international trade in particular The process of regionalization and globalization requires all countries to develop international relations and participate in international division of labor The process of trade liberalization with the removal of trade barriers and creation of principles to regulate international trade relations (regulations of WTO) requires all countries to follows a common playing rule 1.2.3.2. The subjective factors The right strategic choice, making policy and its implementation of a country are important factors that affecting trade relations among countries In case of a customs union, it is required that a consensus to be reached among all members for choosing a trade strategy and policy as well as the role of coordination of the steering agency or the country that have influence in the block Condition and level of economic development of the countries is material factor that decisively promoting their trade relations, enabling the countries to take advantage of their potentials The momentum for promoting trade relations between the countries is the trade promotion activities, of which promotion at macro and micro level are supporting each other The regular surveillance and solving dispute during the process of trade relations development will create a favorable condition for a sound trade relations between countries 1.3 The experience of some countries to develop the trade relations with countries in SACU and the lessons for Vietnam 1.3.1 The experience of some countries to develop the trade relations with countries in SACU 1.3.1.1. The experience of China The development of trade relations of China with countries in SACU is within the developing relationship framework between China and the African countries At the institutional level, recognizing the important of Africa in the development and construction of the Chinese nation in the new period, China has built its complete policy system in relation with the African countries, including the policies to boost exports Chinese goods into African market To create the framework for promoting export the goods of the domestic enterprises to the African market, China enhanced the establishment of the friendly cooperation relations with African countries, signed the agreements with the favorable terms for the Chinese goods to penetrate into the African market. Simultaneously, through the nonrefundable aids and preferential loans for the African countries to develop the infrastructure, the Chinese Government has created the opportunities for the Chinese enterprises to bring the machineries, materials and technology to the African market To promote the trade relations between the SACU countries and China, shortly after China joined WTO in 2001, South Africa and other SACU countries recognized that China has the market economy (while, according to the negotiation agreements of joining WTO, China would be recognized as the country has the market economy in 2015). In 2004, Mr. Jacob Zuma, the Deputy President of South Africa at that time, declared that SACU would consider the possibility of FTA negotiation with China. Currently, the two Sides are studying to negotiate this agreement. At the business entity level, the Chinese enterprises, especially the Stateowned enterprises, are encouraged as well as supported in exporting to the African market. At the moment, there are around 700 Stateowned enterprises of China which have the export activities to the African market and occupy the high proportion compared with other business types, due to these enterprises have large capital and receive the support from the China Government On the part of Chinese enterprises, besides the facilitation and support by the Government, they are always interested in diversifying the export industries, enhance the competitiveness of products, focused on market research to produce the products which meet the needs of African market. 1.3.1.2. The experience of India At the institutional level, the Indian Government launched several initiatives to promote the trade relation with Africa, including focus on facilitating and supporting for enterprises to export to African market With SACU countries, India and SACU countries have negotiated since 2002 and expected to sign Preference Trade Agreement (PTA) soon to reduce the tariffs for the import and export of the both parties India also provided the export credits for SACU countries, in which, USD 100 million for Namibia and increased USD 100 million in 2013; the enterprises of South Africa and Lesotho were also provided the export credit by India for importing goods from India At the trade entity level, the Indian enterprises also are active in exploring African market Since the mid90s, the organizations, such as the Confederation of Indian Industry (CII), the Federation of Chambers of Commerce and Industry (FICCI), the Confederation of Indian Export Organizations (FIEO) identified the enormous potential of Africa and launched a series of the business delegation exchange and economic cooperation programs, including information exchange, organize the business conferences, and display the Indian goods over the Africa continent The Indian community in SACU countries, which concentrated mostly in the Durban city, South Africa, also plays an important role in the trade development between India and SACU countries through the establishment of commercial enterprises which specializing in importing and exporting the goods between SACU and India 1.3.2. Lessons for Vietnam 1.3.2.1. The successful lessons could be applied From the experiences of China and India, we could draw some successful experience which could be applied for Vietnam in developing the trade relations with SACU countries, including: Firstly, need the determination and the strategic direction of the State for the African market development in general and SACU countries in particular. Through the development of political, diplomatic and economic relations with SACU countries, the State needs to establish the favorable business environment for the enterprises to entering the market of SACU countries Secondly, the State needs to use flexible the support tools for the enterprises, which suitable with the characteristics of SACU market as well as the development level of the domestic enterprises In which, need to pay attention to provide the financial supports, due to it is the biggest difficulty of enterprises when making the business with the African market in general and SACU countries in particular Thirdly, the enterprises need to make a reasonable effort in penetrating into SACU market, should carefully study the need and taste of the market to create the suitable products, competitive in terms of quality and price. At the same time, to access the SACU market in particular and the African market in general, need to be patient, flexible and flexibility, due to these markets have the high variability and the little consistency 1.3.2.2. The failure lessons to avoid Besides the achieved successes, China and India also faced with some difficulties in developing the trade relations with SACU countries For China, the Chinese enterprises boosted export the cheap and low quality products to SACU markets, lead to the credibility of the Chinese products has reduced. Besides, the export of textile and footwear products to South Africa market rose too fast, negatively impact to the manufacturing of these items of South Africa, led to South Africa set up the quotas on the import of these products from China For India, although PTA negotiations with SACU countries has implemented since 2002, but due to lack of political will and the flexibility in negotiations of India, so far until now, this agreement has not yet signed. This has reduced the favorably access ability of India enterprises to SACU market These are the lessons which need to be studied, considered to solve and avoid in developing the trade relations with the SACU countries * The conclusion for Chapter 1: Through studying the basic issues about the rationale and practical bases of developing the trade relations between one nation and the countries in a custom union, Chapter 1 of the thesis has achieved the following results and contributions: Firstly, systematizing the theoretical issues on the international trade from the classical trade theory, such as mercantilist school, theory of absolute advantage, theory of comparative advantage, theory of opportunity cost… to the modern trade theory, such as HO theorem, theory of national competitive advantage, theory of product life cycle and theory of global value chain Secondly, clarified the content and form of the development of the trade relations between one nation and other countries in a custom union, based on bilateral relations of each member country, as well as the relations with the whole blocks Thirdly, through studying the experience of developing the trade relations of China and India with African countries in general and with SACU countries in particular, has drawn some lessons for Vietnam to apply in developing the trade relations with SACU countries Chapter 2 THE CURRENT SITUATION OF TRADE RELATIONS BETWEEN VIET NAM AND MEMBER COUNTRIES OF SOTHERN AFRICA CUSTOMS UNION 2.1. SACU and its trade policy for Viet Nam 2.1.1. Economic characteristic of SACU 2.1.1.1. Overview on SACU The Southern African Customs Union (SACU) was founded in 1910 as the first customs union in the world. There are now 5 members of SACU, including South Africa, Botswana, Lesotho, Namibia and Swaziland The new Agreement SACU 2002, signed on October 21 st 2002 and came into force from July 15th 2004 with the aim of (i) facilitating for freighting the commodities among the member countries, (ii) establishing effective, transparent and democratic institution to ensure the fair trade among member countries, (iii) promoting the healthy competition conditions in the common customs area, (iv) increasing investment opportunities in the common customs area, (v) strengthening economic development, diversification, industrialization and competitiveness among member countries, (vi) enhancing the integration of each member in the global economy through boosting trade and investment, (vii) facilitating for the equal delivery of income from customs and special consumption tax of member countries and (viii) creating favorable conditions for upgrading common policies and strategies 10 2.1.1.2. The SACU’s economy Overview: The total area of SACU is 2.7 million km2 and the SACU’s population is 56.3 million people in 2012, of which 86.4% is South Africa From 2002, the SACU economy’s average growth reaches 45%. The economic growth of some member countries is limited by the poor developed infrastructure, shortage of energy, fluctuation of mining output, changing exchange and the effect of the global recession The GDP of SACU reaches USD 423 billion in 2012, in which the GDP of South Africa proportion is 92.1% South Africa is an important member and highly influences on any activities of the Union In terms of economic structure of SACU, in 2012, service accounts for 64%, industry for 33.4% and agriculture for 2.6% The area economic integration in the framework of SACU has encouraged the economy of its members to stably develop since the signing of SACU Agreement in 2002 However, the extent and level of the economic development of 5 members of SACU continue to show a great difference. The average income of Botswana and South Africa are ranked high while that of Namibia and Swaziland are low. Lesotho is considered as underdeveloped country. However, all SACU countries are facing up with such challenges as unemployment, inequality of income, poverty and AIDS 2.1.1.3. The import and export of SACU The SACU’s economy depends much on foreign trade. The ratio between foreign trade and GDP of SACU increases from 45% in 2002 to 56% in 2012 In recent years, the export of the union has risen sharply In 2012, the total turnover reached USD 113.43 billion, in which export is USD 113.43 billion, import is USD 123.34 billion. The deficit in 2012 is USD 9.91 billion The biggest export market of SACU is EU, followed by the US. However, except SACU, US is the most important single market to Lesotho and Swaziland because of the incentive terms from AGOA law. The export of SACU to China has witnessed high growth rate The main SACU’s export commodities are minerals, metal, diamond, meat, fish, textile and sugar SACU mainly imports from EU, China and the US. The key import commodities of SACU are transporting machine and equipment, fuel and chemistry Intraregional trade has rocketed from 2003 and South Africa still plays a center role of the union. 95% of trade flow of SACU is influenced by South Africa. The trade exchange between South Africa and 4 remaining members account for about 60% of the trade exchange between Botswana, Namibia, Lesotho, Swaziland with the world but just for a little ratio in the South Africa’s foreign trade, which expresses the more diversification in foreign markets of South Africa in compared with other members in SACU Like the economic development, the foreign trade activities of SACU’s member countries are definitely different in terms of scale South Africa continues to dominant the import and export of SACU countries with 89.2% export and 86.6% import of the whole union. 12 Regarding nontariff barriers, the regulations on import quota or surcharge on imported agricultural products from all countries including SACU’s countries can be applied by a SACU’s member from case to case in order to encourage production of that agricultural products SACU’s countries shall apply antidumping, countervailing and safeguard levies as regulated by South Africa. South Africa (together with other SACU’s members) is among the list of countries which have applied antidumping measures most Goods importing into a SACU’s member can be cleared at the first entry port (normally in South Africa) or they can be transferred to any port of a member country to be cleared. Movement of goods inside SACU is exempted from import tax but it has to be in customs surveillance All SACU’s members apply preferential and nonpreferential rule of origin. The regulations on preferential and nonpreferential rule of origin are set in the laws on customs tax and special consumption tax of each member modeling the laws of South Africa Regarding TBT and SPS issues, in the SACU Agreement in 2002, SACU promoted to harmonize its TBT and SPS measure. However, SACU’s members have not reached overall agreement until now. Lesotho and Namibia apply South African regulations while Botswana and Swaziland apply different regulations Concerning exporting goods, some SACU’s members apply export tax (Namibia and South Africa apply export tax on raw diamonds) Botswana maintains its exclusive right on beef export) 2.1.2.2. Trade policies with Viet Nam SACU’s trade development policies with Viet Nam are set out generally within the framework of SACU’s trade development policies with the developing countries and Asian countries With Asian countries, SACU’s countries wish to enhance trade relation with Asian countries, especially with fast growing economies such as China, India and ASEAN With ASEAN, SACU had proposed to carry out a joint study on negotiation on a Preferential Trade Agreement between SACU and ASEAN With Viet Nam and within WTO, SACU expressed its support Viet Nam’s negotiation efforts on the accession into WTO by not requesting for separate negotiations. Besides, right after Viet Nam’s accession into WTO, South Africa, after consulting with other SACU’s members, announced and signed agreement to recognize the Viet Nam economy as a full market economy Regarding bilateral relations, with the friendship built in the Viet Nam’s support in the struggle to eliminate Apartheid regime in South Africa and the fight for freedom of the Namibia People, the Governments of South Africa and Namibia have always expressed their willingness to negotiate and sign trade agreements with Viet Nam Meanwhile, other SACU’s members Botswana, Lesotho, and Swaziland, although having primary political and diplomatic relations with Viet Nam, have always expressed willingness to encourage trade relations in the contacts with the Vietnamese side 2.2. Viet Nam’s trade policies with SACU 2.2.1. Overview of political and diplomatic relations 13 Since its Renovation, Viet Nam has decided to positively diversify and multi lateralize foreign relations including the implementation of the policy to continue expanding relations with the traditional friend countries, people freedom countries, developing countries in Africa, Middle East and Latin America With SACU’s countries, due to the less effective activity of the permanent body, the SACU’s Secretariat, as well as the low development in the relationship between Viet Nam with regional economic organizations in Africa, the relations between Viet Nam and SACU mostly depend on bilateral relations between Viet Nam and each SACU’s members Viet Nam has sound traditional friendship relations with South Africa and Namibia, while the relations with Botswana and Lesotho are still limited and Viet Nam has newly established its diplomatic relation with Swaziland in 2013 2.2.2. Viet Nam’s trade policies with SACU’s countries Viet Nam’s trade development policies with SACU’s countries are set out generally within the framework of Viet Nam’s trade development policies with the African countries In the “Export Import Development Strategy for the Period 2011 – 2010”, the Government of Viet Nam requested to find more new markets in Latin America and Africa In this orientation, an important event in the relation of Viet Nam and Africa was held in 2003 themed “Viet Nam – Africa Conference: opportunities for cooperation and development in the 21 st century” in Ha Noi. The Conference marked an important corner stone in the relation between Viet Nam and the African countries. This was the first time Viet Nam held an International Conference on cooperation between Viet Nam and African countries. The Conference added to the understanding and it changed the views of all parties on possibilities, benefits and prospects for Viet Nam – Africa cooperation Beside the Conference, in 2004, the Government of Viet Nam drafted and issued the National Action Plan to promote Viet Nam – Africa relationship in the period 2004 – 2010. With regard to trade, the Government set a target of USD 1.0 billion for the twoway trade volume between Viet Nam and Africa. In which, Viet Nam would export USD 700 million value of goods to Africa In the implementation of the National Action Plan to promote Viet Nam – Africa relationship in the period 2004 – 2010 of the Government, in the trade and economic field, the Ministry of Industry and Trade issued the Action Program in order to implement the National Action Plan to promote Viet Nam – Africa relation Continuously, in 2010, the Ministry of Industry and Trade a Working Scheme “Using capabilities of the general export enterprise in promoting export to the African market” aiming at helping the enterprises do long lasting business with Africa In order to further promote trade and economic cooperation relation with African countries, in October 2010, the Government of Viet Nam organized the 2 nd Viet Nam – Africa International Conference December 28 2011, the Prime Minister issued the Decision No 2471/2011/QD TTg approving Export Import Strategy for the period 2011 – 2020, with orientation 14 to 2030 Regarding markets development strategy, the Strategy identified: diversifying export markets; consolidating and expanding the market share of Vietnamese products in the traditional markets; making a breakthrough in the expansion of new potential markets, striving to raise Viet Nam – Africa twoway trade volume to 5% of the total trade volume of Viet Nam in 2020 2.3. Current development of trade relations between Viet Nam and the SACU countries 2.3.1. Development of trade relations at the institutional level The development of trade relations at the institutional level between Viet Nam and the SACU countries are shown on the following main issues: Establishing joit governmental relations on trade: Viet Nam does not have any joit governmental relations on trade with the block of SACU With SACU countries, Viet Nam only have joit governmental relations on trade with South Africa. Viet Nam and South Africa established the Joint Governmental Discussion Forum on Economic, Trade, Science, Technology and Culture Cooperation and the Join Trade Committee Strengthen the legal framework to facilitate the development of economic and trade relations: Recognizing the importance of strengthening the legal framework for commercial activities, Viet Nam and the SACU countries have signed trade agreements and other agreements supporting the development of commercial activities such as: Agreements on Avoidance of double taxation, Agreement on Banking cooperation, Agreement on Maritime Transport, etc Besides, with Viet Nam’s officially becomeing a member of WTO, trade exchange between Viet Nam and the SACU countries have enjoyed preferences under the WTO rules. Earlier, Viet Nam has granted MFN status with two SACU countries including South Africa and Namibia. Thus, after joining the WTO, Viet Nam has received MFN benefits from all members of SACU Set up representative offices to support the development of trade relations: Recognizing the necessity of the expansion of the Embassies and Trade Offices, Viet Nam has established, in South Africa, Trade Office in 1999 and Embassy in 2000. Currently, these agencies are responsible for situations in the SACU countries As for the SACU countries, South Africa opened its Embassy in Ha Noi in 2002 and opened Honorary Consul in Ho Chi Minh City in 2009 Strengthen the implementation of trade promotion at national level to support the activities enterprises: As part of implementing Viet Nam Africa Action Program, Viet NamAfrica Business Forum has been established on 27 October 2004. Additionally, the Viet Nam Chamber of Commerce and Industry has developed Viet Nam Africa e commerce portal (officially put into operation in September 2005) Since 2005, the Government of Viet Nam has approved National Trade Promotion program. Since then, a national trade promotion is held annually in South Africa, thus supporting hundreds of businesses involved. However, apart from South Africa, no similar program has been held in other SACU countries 15 Besides, the Ministry of Industry and Trade, Trade Promotion Agency, Viet Nam Chamber of Commerce and Industry have also paid much attention on the market research 2.3.2. Development of trade relations at the entity level 2.3.2.1. Regarding trade turnover of goods Trade in goods between Viet Nam and the SACU countries have only started since 1992 and growed rapidly in recent years, which can be divided into three stages of development as follows: From 19921999 During this period, Viet Nam enterprises have made trade relations with South Africa since 1992 and until 1999, South Africa is the only country in SACU having trade relations with Viet Nam. Trade turnover between Viet Nam and South Africa increased from USD 1.215 million in 1992 to USD 35.288 million in 1999 By 1999, with exports to South Africa reaching USD 31 million USD, South Africa became the largest export market of Viet Nam in Africa From 20002006 In 2000, Viet Nam had exported to all SACU countries with a total turnover of USD 31.929 million. In particular, exports to South Africa reached USD 25.797 million (representing 80.8%) and notably, exports to Swaziland reached USD 5.862 million (accounting for 18.3%). By 2006, exports to the SACU countries reached USD 101.2 million The growth rate of exports to the SACU countries for the period 20002006 reached an average of 21.6% per year and accounted for 16.6% of Viet Nam's exports to Africa From 2007 to present Total turnover increased from USD 222.5 million in 2007 to USD 1,014.6 million in 2014. Particularly in 2011, bilateral trade exchanges between Viet Nam and the SACU reached a record of USD 2.1 billion, however, mainly due to the gold reexport operations from Viet Nam to South Africa amid rising gold prices Trade exchenges with the SACU countries grew at an average growth rate higher than the average national foreign trade growth during the same period, reaching 24.2% per year over the period 20072014 The proportion of trade turnover with SACU in total trade exchange Viet Nam Africa in 2007 was 22.1%, in which the highest rate reaching 44.3% in 2011 and 21.2% in 2014 Generally, for the whole period 20072014, the proportion was 26.2%. This manifested important role of SACU markets in Africa to Viet Nam Of the total foreign trade turnover of Viet Nam, trade exchange with the SACU countries accounted for 0.2% in 2007, reaching a peak of 1.04% in 2011 and 0.34% in 2014. Generally, for the whole period 20072014, the rate was 0.43% Regarding the trade balance, from 2007 to now, Viet Nam has always seen trade surplus In the period 20072014, Viet Nam's exports to the SACU countries increased from USD 125.2 million in 2007 to USD 814.4 million in 2014. The average growth rate during this period was 30.7% per year 16 Exports to the SACU countries play important roles in Viet Nam's exports to Africa, accounting for 18.3% in 2007, reaching a peak of 53.1% in 2011 and 26.3% in 2014 Generally, for the period 20072014, exports to the SACU countries accounted for 30.5% of Viet Nam exported to Africa Of the total export turnover of Viet Nam, exports to SACU in 2007 accounted for 0.26%, reaching a peak of 1.93% in 2011 and 0.54% in 2014. Generally, for the whole period 20072014, the rate is 0.72% Regarding imports, imports of Viet Nam from the SACU countries increased from USD 97.2 million in 2007 to USD 200.1 million in 2014. The average growth rate in 20022014 period was 10.8% Imports from the SACU countries accounted for 30% of imports from Africa in 2007, but by 2014, this ratio reduced to 11.8% and stood at 16.6% for the whole period from 2007 to 2014. 2.3.2.2. Regarding export markets and products Export markets Viet Nam's exports to SACU focused mainly on South Africa market. Before 2000, this was the only export market of Viet Nam into SACU countries. In the period 2000 2006, export to South Africa also accounted for 93.7% of Viet Nam's exports to the SACU countries. This rate in the period 20072014 was 97.8%. The export turnover of Viet Nam to South Africa reached a record of USD 1.86 billion in 2011. In 2014, export to this market hit USD 793.9 million. With its favourable position, South Africa is the door for Viet Nam to penetrate into other SACU countries Export structure Before the year 2000, Viet Nam’s export staple to South Africa was rice In the period 20022012, the export products of Viet Nam to SACU categorized by SITC were: food and live animals, machinery and vehicles, and other processed items. In which, food and live animals and other processed goods tended to decrease, while machinery and transport tended to increase For each market, export structure also varied and constantly changed 2.3.2.3. Regarding import markets and products Import markets Similar to exports, imports of Viet Nam from the SACU market rooted mainly from South Africa. Before 2000, South Africa was the only export market of Viet Nam in the SACU countries. In the period 20002006, South Africa accounted for 94.5% of total import turnover of Viet Nam from SACU countries. This rate was 88.3% in the period 20072014. In 2013, imports from South Africa reached USD 143.7 million Meanwhile, imports from the countries such as Botswana, Lesotho, Namibia and Swaziland remained low and unstable but tended to increase in recent times Import products Before 2000, Viet Nam imported from South Africa some commodities such as sugar production equipment, fertilizer, paper, iron and steel products, etc During the period 20022012, Viet Nam’s import products from SACU categorized by SITC were food and live animals, raw materials, chemicals and 17 processing industrial goods In which, food and live animals and raw materials tended to increase, while chemical products and processing industrial goods tended to decrease 2.3.2.4. Trade in services and investment relations Relations in the field of services and investment between Viet Nam and other SACU countries remain low and mainly between Viet Nam and South Africa Some banks of Viet Nam have established correspondent relations with a number of South African banks Regarding tourism, South Africa is the country with highest number of visitors travelling to Viet Nam compared to other African countries. Annually, there are around 10002000 South African visitors to Viet Nam. Viet Nam tourist companies have also developed many tourist programs to South Africa, with a current number of visitors at 5000 people coming to South Africa annually As for investment, South Africa has carried out just one small project of direct investment in Viet Nam and Viet Nam has also had two small investment projects in South Africa Meanwhile, a number of Viet Nam companies have opened branches in South Africa so far Bilateral cooperation in intellectual property has not been set 2.4 General assessment of the situation on development of trade relation between Viet Nam and SACU countries 2.4.1 The achievements Viet Nam has issued a number of policies and solutions for development of trade relation with African countries, including the SACU countries Viet Nam has initially established a mechanism of cooperation and legal framework in order to facilitate trade activities between Viet Nam and SACU countries Regarding the turnover growth rate of commodity trade: Trade turnover of commodity between Viet Nam and SACU countries grew at an average rate higher than national’s growth rate of foreign trade. Regarding the trade balance: The high growth of exports contributed to maintain the trade surplus position of Viet Nam in trade exchange with the SACU countries Regarding the structure of exports: Although the agricultural products still account for a large proportion, but it began turning to consumer goods, electronic households and machinery goods. Regarding the quality of exports: Vietnamese goods is considered meeting the needs of market Regarding the method and object export: In trading with SACU countries, besides the mediate export form, the direct export form currently tend to increase 2.4.2 Some limitations and the causes: 18 Trade relation between Viet Nam and SACU countries is still limited, details: First, except some of mechanism of cooperation with South Africa and Namibia have been built, the legal framework to facilitate for trade activities between Viet Nam and SACU members have not been established Second, Viet Nam hasn’t had any specific development of economic and trade relation policy for the SACU countries Third, our structure of exports to regional market is still limited in two aspect: (1) Category of goods is monotonous, and we haven’t actively developed new exporting products which have high turnover. (2) The exports have low valueadded due to low labor quality. Fourth, the assessment of effect of importexport activities with these markets seem low. The causes of above limitations are: Objective causes: First, high transport costs make price increased and reduced the competitiveness of goods Second, Viet Nam was not a priority partner in development of trade relations policy of SACU countries with the world. Third, except South Africa, the other members of SACU have very small scale so that these are relatively difficult to increase the volume and turnovers of export due to the economic effectiveness still limited. Fourth, most people of SACU countries have low income, so even though the large of consumer demand but come with low affordability. Fifth, Viet Nam is under huge competition in these markets Subjective causes: * For the State: First, The State administration authorities have not yet focused on proposing, buildingup the specific development of economic and trade relations policy with SACU countries Second, Viet Nam has not focused on proposal, negotiating to buildup a mechanism of cooperation and legal framework in order to facilitate trade activities between Viet Nam and SACU group and each members of its… Third, the support of State to the associations and enterprises in promoting development of trade relations with SACU countries still very limited. There are not much the priority support in national trade promotion program for the distant and difficult market as SACU markets * For the associations and enterprises: First, there are few business delegations to explore business opportunities and survey the market of SACU countries organized by Vietnamese associations and enterprises Second, the market information of SACU countries is lacking and and are not updated regularly Third, the trade promotion activities in SACU markets have not been paid attention. Fourth, the competitiveness of Vietnamese enterprises are still weak. Fifth, Vietnamese enterprises are not really interested in building the network of partners in SACU countries * Conclusion of Chapter 2: Through the analyst and assessment of situation of development of trade relation between Viet Nam and SACU countries, Chapter 2 of the thesis has archived the following main results: 19 First, outlines the characteristic of SACU group as well as the trade policies of these countries with Viet Nam; analyzes the policies of Viet Nam in developing economic and trade relations between Viet Nam and SACU countries Second, analyzes the situation of development of trade relations between Viet Nam and SACU countries at the institutional and entity level; the situation of trade exchange is divided into phases: before 2000, from 2000 to 2006, and from 2006 to 2014; analyzes the structure of importexport goods between and SACU countries. The thesis also provides an overview of relations of trade, service, investment between Viet Nam and SACU countries Third, from the analysis the situation of development of trade relations between Viet Nam and SACU countries, the thesis has drawn the achievements, the limitations, the causes of these limitations in developing trade relation between Viet Nam and SACU countries. These are the practical basis for proposing solutions of further developing trade relation between Viet Nam and SACU countries Chapter 3 ORIENTATION AND SOLUTIONS TO DEVELOP TRADE RELATION BETWEEN VIET NAM AND MEMBER COUNTRIES OF THE SOUTHERN AFRICA CUSTOMS UNION 3.1. Prospects for the development of trade relations between Viet Nam and SACU countries 3.1.1. Prospects of regional economic integration of SACU Researchers on regional integration in the world supposed that political willingness is an important factor which promotes deep, wide and effective integration process Heads of SACU states represented this issues through their statements on 12 pointagenda at SACU Summit in 2010, including: promoting Secretariat’s ability; making policies and necessary procedures to complete the establishment of Alliance Bodies; Ensuring that making policies on industry, agriculture, unhealthy trade competitiveness and other priorities which were cited in SACU agreement 2002 should be implemented; making trade and tax policy, trade strategy to support industrial process of SACU; developing the initiatives to enhance interregional trade; the sponsor of intercountry projects should be taken a consideration; Reviewing SACU agreement 2002; Developing SACU’s point of view on futuregeneration issues, and including current negotiations; Determining roadmaps to move towards an Economic Community and a Monetary Union; Considering the division of Common Income Fund; Defining SACU as a central position of regional economic integration The success of SACU will promote the deeper regional connection of SADC, shift from a free trade area to a custom union, of which SACU is a key member At a larger scope, as a member of SADC, SACU will take part in The Tripartite Free Trade AreaTFTA, or called Cape to Cairo Free Trade Zone, including 26 members of the three trade blocks, East Africa (EAC), SouthEast Africa (COMESA) and South Africa (SADC) 20 3.1.2. Prospects for economic development of SACU countries. In the context of the impact of global economic crisis, there are a lot of difficulties and challenges in each economies, developing SACU’s economy will depend on the effectiveness of policy coordination among country members aimed to create an unity region market and enhance the exportled growth. In spite of achieving some progress in common policy institutionalization of entire block based on SACU agreement 2002, there are a lot of unsolved technical problems. Especially, the establishment of common policy in the fields of agriculture, industry, competitiveness. Coordination for a joint negotiation mechanism of entire block will facilitate to promote the connection between SACU and other partners Trade liberalization process will support SACU countries to easily access international markets, however, the import tariff reduction will make the source of important revenue of BLNS countries go down. Therefore, these countries should expand the source of revenue in their home countries 3.1.3. Chances and challenges to developing trade relations between Viet Nam and SACU countries 3.1.3.1. Chances Along with GDP growth, improved income as well as fast urbanization speed will raise import demand on consumption items and goods used in the production and infrastructure construction demand in urban area. From the above foundations indicate that the trend of export growth of almost all countries in the region will be predicted to maintain growth impetus in the coming time A large import turnover as well as common tariff which will be applied consistently will facilitate import items to easily enter, circulate in SACU market region Apart from enhancing to export to SACU countries, promoting to import inputs from SACU countries is a chance for Vietnamese enterprises. It is clear that in the coming time, SACU countries will continue to depend on natural resource exploration for economic development This is an opportunity for Viet Nam importing raw material, essential fuel source for production in their country Along with a chance for trade in goods, SACU countries’ policy for investment attraction is a chance for Viet Nam investing into SACU countries, especially in some advantageous fields of Viet Nam such as communication, aquaculture and seafood processing, wood processing…On the contrary, Viet Nam is able to attract investment from South Africa in the fields of mineral exploitation, tourism, plant and wood processing… 3.1.3.2. Challenges There are a lot of implicit threats and instability in economic, political, social issues in SACU countries, which will have a great influence on trade relation development between Viet Nam and SACU countries. Economic, political, social instability will make business environment in SACU countries deteriorate and raise the risk in trading activities and investment When penetrating into SACU markets, Viet Nam has to compete with South Africa and other African countries At a progressive development level, South African 21 enterprises will become the first competitors of Viet Nam when Vietnamese enterprises enters SACU markets. Besides, there remains the cutthroat competition with other Asian countries such as China, India, Malaysia, Thailand…which have similar export structure with Viet Nam and severe competition on price, quality and design Differences in business culture and consumption habits will set up entry barriers in trade relations between Viet Nam and SACU countries 3.1.4. Forecast on the development prospects of trade relations between Viet Nam and SACU countries 3.1.4.1. Exporting prospect In the Viet Nam’s strategy on Exports and Imports to 2020, general export orientations’ target was set for export growth 1112% from 2011 to 2020 and 10% per year in the period from 20212030 With SACU, In the context of import demand in a slow growth, increasing the export will depend on developing Viet Nam’s export items In the period of 2015 – 2020, Viet Nam still continues to increase the export of processing products with a large value. The rate of raising export value in the market will reach approximately 20% per year and obtain USD 2.7 billion by 2020 In the period of 20202023, along with the development of domestic economy and business exchanges, the period is defined as developing period in depth. Viet Nam moves towards exporting highadded value products, which leads to export growth rate to be slow down. The target for export growth in the period will be 15%/year and reach nearly USD 8.5 billion by 2030 3.1.4.1. Importing prospect Regarding the import, Viet Nam strongly impedes the process of industrialization and modernization in the period of 20152020, Viet Nam is able to increase to import raw materials from SACU countries with growth rate at 20% per year and reach USD 500 million by 2020. The period of 2021 – 2030, the growth rate will be at 15% per year and obtain USD 2 billion by 2030 3.2. Viewpoint and orientation for trade relation between Viet Nam and SACU countries to the period of 2020 and the vision to 2030 3.2.1. Viewpoint of developing trade relation between Viet Nam and SACU countries 3.2.1.1 Developing trade relation between Viet Nam and SACU countries is necessary with the aim of implementing importsexports strategy of Viet Nam to the year of 2020 and the vision to 2030 Developing trade relation between Viet Nam and SACU countries is to implement a guideline of export market diversification. At the same time, with the important role of SACU countries in trade relations between Viet Nam and African countries ( almost account 25% of the total export value to Africa), promoting the export to SACU countries will play a vital part in achieving the target which the export turnover to Africa will account for 5% of the total of Viet Nam’s export value by 2020 3.2.1.2. Development of trade relations with SACU countries will contribute to the expansion of the process of integration of Viet Nam into the world economy 22 In order to further expand the process of integration of Viet Nam into the world economy, Viet Nam should further enhance cooperation with all countries and regions in the world. The SACU countries, leading by South Africa, a member of BRICS group, a gateway to Africa, should be considered priority partners, with the emphasis on trade relations 3.2.1.3 Developing trade relation between Viet Nam and SACU countries will depend on increasing production investment into export items of Viet Nam with the aim of meeting SACU countries’ demand and exploiting the source of import items from SACU countries In the process of developing trade relation between Viet Nam and SACU countries, Viet Nam should pay attention to boost the export and increase to import goods from these countries 3.2.2. The orientation for developing trade relations between Viet Nam and SACU countries Firstly, creating the basic changes in the trade relations between Viet Nam and SACU countries in conformity with the potentiality of each parties and globalization trend and international economic integration Secondly, continuing to better the policy of enhancing trade relation between Viet Nam and SACU countries in accordance to integration commitments of Viet Nam Thirdly, product diversification combines with choosing advantageous items with the purpose of developing trade relations between Viet Nam and SACU countries Fourthly, enhancing the effectiveness of trade relations between Viet Nam and SACU countries 3.3. Measures to develop trade relations between Vietnam and SACU countries in the period up to 2020, with the vision to 2030 3.3.1. Macro measures 3.3.1.1. Enhance political cooperation and diplomatic relations between Vietnam and SACU countries Firstly, Vietnam should foster establishing relations with SACU standing agency as soon as possible Secondly, Vietnam should foster sending concurrent Ambassador to Swaziland after establishing diplomatic relations between two countries to give facilities for developing trade relations between Vietnam and Swaziland in particular and with SACU countries in general Thirdly, Vietnam should enhance high ranking delegation exchange between Vietnam and SACU countries That will help promote the image and heightening Vietnam’s international position, provide official and updated information for SACU, give a chance for the two sides to discuss favorable measures to bilateral trade Fourthly, Vietnam should promote the role of Vietnam Embassy and Trade Office to Africa, concurrently in charge of SACU countries Fifthly, in order to enhance its prestige and influence, Vietnam should share experience of development and technical assistance to SACU countries 3.3.1.2. Promoting the establishment and enhancing the roles of joint governmental relations on trade with SACU countries 23 Viet Nam should cooperate with South Africa to enhancing the roles of joint governmental relations on trade between the two countries, which are the Joint Governmental Discussion Forum on Economic, Trade, Science, Technology and Culture Cooperation and the Join Trade Committee Besides, Viet Nam should promoting the establishment of a Joint Working Group on Trade with the SACU Secretariat Viet Nam should also consider to promote the establishment of a Joint Governmental Commission or a Joint Trade Committee with Namibia and Botswana 3.3.1.3. Studying the possibility of promoting the negotiation and signing of bilateral and multilateral trade agreements with SACU countries Based on the fact that SACU is a close economic bloc, formed an united customs union, in order to give facilities for exporting of Vietnam to SACU market, state managed entities should consider to propose signing FTA with SACU. That will open the door for Vietnamese goods to access to the common market of the SACU countries, which is a trend of the world’s economy when multilateral commitments are not as helpful as they were. In the short term, Vietnam should propose joint research the possibilities of negotiating and signing FTA between Vietnam and SACU countries. After finishing joint research, the two sides will consider to foster starting negotiations with a view to forming free trade area between Vietnam and SACU countries before 2020 Meanwhile, with the customs union’s specification that each country maintain its own nontariff barrier, Vietnam should consider negotiating agreements with SACU on this matter Vietnam should especially negotiate with South Africa since this country has a fullyconstituted nontariff barrier, which is applied by other SACU members. The content of negotiations should be mutual recognition agreements on phytosanitary, which gives facilities for promoting agricultural products trade between Vietnam and SACU countries 3.3.1.3. Support Vietnamese enterprises in developing trade relations with SACU countries Firstly, Vietnam should boost information and communication on SACU countries Secondly, Vietnam should help enterprises which produce exporting items in orienting markets and products Thirdly, Vietnam should enhance and improve the effectiveness of national trade promotion 3.3.2. Recommendation for enterprises 3.3.2.1. Focus on developing exporting items which are suitable to the market of SACU countries To maintain stable export growth to SACU countries, Vietnamese enterprises should actively develop exporting items in two ways. Firstly, to diversify exporting items because SACU countries are potential market for items of all kinds. Secondly, to raise the competitiveness of each exporting item in pricing, packing, quality. SACU countries do not demand superior products but stable and cheap ones. Price competition is the weakness of Vietnamese enterprises among competitors, especially China 24 3.3.2.2. Foster trade promotion in SACU market Vietnam’s trade promotion in SACU market in particular and Africa market in general are not adequately considered There are some contents to be noted as follows: Collect and process information Advertise products and brands Participate in exhibitions and fairs Research on setting up a commercial center in South Africa 3.3.2.3. Build suitable business strategy for SACU market Vietnamese enterprises should patiently build suitable business strategy for SACU market Export through intermediates Most of Vietnamese enterprises have used this method to do business with SACU countries This is applied when export scale is small and exporting items are dispersed Direct import – export Vietnamese enterprises have applied this method, especially in South Africa where Vietnam Trade Office and Diplomatic Representative were set up. Moreover, banking system in South Africa is fully developed and financed Import – export adherence In business strategy in SACU market, Vietnamese enterprises should pay attention to importation. To import low price, good quality and competitive products, especially material input and minerals for producing, enterprises have to send representative to immerse with local communities, meet with local partners, find out supply ability, therefore to set up longterm and reliable relationships Investment in SACU countries Investments directly influence business exchange. The purpose of investing in SACU is not only selling local made products but also exporting to neighbor markets or EU/US market, to take advantage of trade favors granted to SACU through bilateral and multilateral agreements. Vietnamese enterprises should use FDI as a business form to prepare for higher stage of development of Vietnam economy Enterprises should study the possibility of investment in SACU countries in the fields of textiles and garments, woods processing, fishery products, pharmaceuticals, electronics products 3.3.2.4. Enhance the role of associations and cooperation among Vietnamese enterprises The associations should have specific actions to support enterprises in immersion with markets, especially in Vietnam’s advantageous items such as rice, pepper, tea, textiles and garments, footwear, motorbikes, bicycles The associations should foster trade promotion in SACU markets for enterprises, especially via national trade promotion programs The associations should encourage the spirit of cooperation among its members. Competition doesn’t mean refusing cooperation but considering cooperation as important method to restrain negative aspect of competition mechanism 25 * Conclusion of Chapter 3 Based on both theoretical and practical knowledge analyzed in chapter 1, 2, 3, the thesis has gained fruitful outcomes and contributions as follows: Firstly, the thesis has analyzed the factors which influence trade relations developing perspective between Vietnam and SACU countries, therefore to forecast the trade volume in the period up to 2020, with vision to 2030. Secondly, the thesis has given the point of view, orientations and propose the solutions to developing trade relations between Vietnam and SACU in the next time, both macro and micro level Macro solutions focus on enhancing political, diplomatic relations between Vietnam and SACU countries; creating legal framework to give facilities for business exchange and supporting enterprises in developing trade relations with SACU. Micro solutions are: developing exporting products to meet the demand of the market, enhance trade promotion activities, choosing suitable business strategy and promoting the role of the associations, connections among domestic enterprises in building up markets. 26 CONCLUSION Trade relation between Viet Nam and SACU countries was established and developed since 1990, when Viet Nam gradually diversified its trading partners and looked for new markets In recent years, trade relation between Viet Nam and SACU countries records positive developments, contributing to the expansion of Viet Nam’s international trade activities By studying the theoretical and practical issues of the development of trade relation between Viet Nam and SACU countries, proposing measures for further enhancing this relation, the thesis “Measures to develop trade relation between Viet Nam and member countries of Southern Africa Customs Union (SACU” has completed with the following contribution: i) Summarized the theories of international trade; ii) Clarified contents and forms of the development of trade relation between a country and member countries of a customs union; iii) Studied the experience of China and India in developing trade relations with Africa in general and with SACU countries in particular, the thesis made some suggestions that Viet Nam can follow; iv) Gave an overview of the SACU characteristics, its trade policy for Viet Nam as well as the trade policy of Viet Nam for Africa in general and SACU countries in particular; v) Analyzed the process of development of trade exchange between Viet Nam and SACU countries; vi) Pointed out results, shortcomings and reasons of the development of trade relation between Viet Nam and SACU countries. These are practical basis for the proposals of measures for developing trade relation between Viet Nam and SACU countries; vii) Analyzed the affecting factors of the prospect of the development of trade relation between Viet Nam and SACU countries, and for casting the trade exchange volume between Viet Nam and SACU in 2020 and with vision to 2030; viii) Proposed measures for developing trade relation between Viet Nam and SACU countries in the coming time, at macro and micro level It is hoped that the results and contribution of this thesis will join hand to develop trade relation between Viet Nam and SACU countries, a new market area with potentials However, in the context of complex international trade relations, it is necessary that there should be new studies on the development of trade relations between Viet Nam and SACU countries as well as other countries, economic organizations in Africa to meet the demand of the process of market expansion for exports and import of Viet Nam./ ... expansion of new potential markets, striving to raise Viet Nam – Africa twoway trade volume to 5% of the total trade volume of Viet Nam in 2020 2.3. Current development of trade relations between Viet Nam and the SACU countries 2.3.1. Development of trade relations at the institutional level... practical basis for proposing solutions of further developing trade relation between Viet Nam and SACU countries Chapter 3 ORIENTATION AND SOLUTIONS TO DEVELOP TRADE RELATION BETWEEN VIET NAM AND MEMBER COUNTRIES OF THE SOUTHERN AFRICA CUSTOMS UNION ... expansion of the process of integration of Viet Nam into the world economy 22 In order to further expand the process of integration of Viet Nam into the world economy, Viet Nam should further