ASEAN bloc preparing to upgrade trade ties for future

Vietnam’s Ministry of Industry and Trade (MoIT) is now working with relevant ministries and agencies on the upcoming sixth negotiation round on upgrading the ASEAN Trade in Goods Agreement (ATIGA) in Indonesia later this year.

The agreement has undergone five rounds of negotiations since its launch in March 2022, and has entered into text-based dialogue since the third round. The new version of the agreement will be among many measures that ASEAN implements to increase its trade and investment cooperation.

ASEAN bloc preparing to upgrade trade ties for future, illustration photo

“According to the ATIGA negotiating committee, the negotiations will be completed in 2024 and then the signing will take place,” a representative at the Ministry of Foreign Affairs told VIR.

Last month, member states concluded two chapters of the agreements and looked forward to the completion of the negotiations on most of the chapters in 2024, according to the ASEAN Secretariat.

“We reiterated the commitment to making the agreement more comprehensive in scope, covering not only traditional trade-in-goods elements but also emerging and future issues to ensure that the upgraded ATIGA will be a modern, comprehensive, and forward-looking agreement that is relevant to business communities and more responsive to regional and global developments,” said the chairman’s statement from the 43rd ASEAN Summit that was released last month.

“We support the ongoing efforts to align the ATIGA with the ASEAN digital transformation and sustainability agenda, as well as emerging priorities such as paperless trade, the circular economy, sustainability, food security, trade, and the environment.”

Under the existing commitments, ASEAN member nations removed tariffs on 98.6 per cent of the total goods and products in 2021. Brunei, Indonesia, the Philippines, Singapore, and Malaysia have eliminated 99.3 per cent of the tariffs, and Cambodia, Laos, Myanmar, and Vietnam have reached 97.7 per cent.

The EU-ASEAN Business Council has recommended that when it comes to trade liberalisation under the agreement, specific solutions should be explicitly included on the tariff-free treatment of reused, recycled, repaired, and remanufactured goods to boost the movement to a circular economy in the bloc.

“The remaining tariffs on some goods in some member states should be eliminated to bring the agreement on par with others that have been entered,” the council said.

In another chapter on trade facilitation, it is suggested that improvements should embrace concrete and enforceable deadlines for the further expansion of the ASEAN Single Window to include all the documentation needed for the import or export of goods.

A provision is also needed for the simplified clearance of low-value shipments, including a commitment to move to fully paperless systems for customs and other documentary requirements and provisions to enhance consultation with the private sector.

The MoIT has worked with the General Department of Vietnam Customs to successfully connect with the ASEAN Single Window, an environment that connects and integrates the national single window of each ASEAN member state, significantly expediting cargo and promoting economic integration within the bloc.

In addition, Vietnam has also exchanged the electronic certificate of origin with the D form for nine regional nations. In 2022, the total number of e-dossiers exchanged with these nations stood at about 250,000, and in the first nine months of this year, the figure hit about 180,000.

Denny Abdi, Ambassador of Indonesia to Vietnam, said that the implementation of such regional commitments would bring Indonesian companies greater opportunities to export goods to and invest in Vietnam.

“Going forward, cooperation in various areas is important. This includes high-tech industries, the renewable energy sector, the digital economy, fisheries, and agriculture. These are the economies of the future - ones that will pave the way for a sustainable and prosperous economy for the people,” Ambassador Abdi said.

“Given the dynamics and complexity of the global challenges, nations need to collaborate and turn obstacles into opportunities. This spirit of collaboration was highlighted by President Joko Widodo at the 43rd ASEAN summit as the 2023 Chair of ASEAN. His statement showed that Indonesia and Vietnam must continue to foster cooperation to ensure the ship continues to sail amid the storm.”

Last month, member states also discussed the Fifth Protocol to amend the ASEAN Comprehensive Investment Agreement, providing greater certainty and transparency on the investment regime in the bloc and ensuring the bloc’s own internal agreement for investment had continued relevance. It is expected that the protocol will be signed in 2024.

The bloc’s economy is projected to maintain positive momentum, with growth rates of 4.6 per cent in 2023 and 4.9 per cent in 2024. Total trade and investments rose to record levels of $3.8 trillion and $224.4 billion, respectively, the total trade volume increased by 14.9 per cent, and foreign direct investment (FDI) inflows climbed by 5.5 per cent.

The bloc’s share of global trade and FDI last year hit 22.3 and 12.3 per cent, respectively.

“We are committed to the continued enhancement of collaboration among ASEAN member states, as well as external partners, to maintain and strengthen regional economic resilience by promoting transformative sectors such as the digital and green economies to cement the bloc’s position as the epicentre of growth,” said the statement of the 43rd ASEAN Summit

The ASEAN Secretariat has commended Vietnam’s investment facilitation, which will help draw in more funding from both inside and outside the bloc.

“Vietnam’s government has continued to improve the country’s investment environment, including resolutions and regulatory directives on information provision,” the secretariat said.

ASEAN member nations have poured much investment into Vietnam, including Singapore with $73 billion, Thailand $13.73 billion, Malaysia $13.1 billion, Brunei $950 million, Indonesia $646.6 million, the Philippines $607.6 million, Laos $71.1 million, and Cambodia $70 million.

ASEAN-China ties taking crucial steps Vietnam and China are set to beef up their trade and investment ties via a top-level visit to an ASEAN-China exposition.

An upgraded ASEAN bloc within reach ASEAN member states will review their plans on expanding trade and investment within the bloc, making it more favourable for Vietnam to latch onto related bonanzas.

The positive impact of ASEAN-China cooperation Prime Minister Pham Minh Chinh and a Vietnamese delegation have concluded their trip to to attend the 20th China-ASEAN Expo and the 20th China-ASEAN Business and Investment Summit in China’s Nanning province.

Japan Foreign Minister plans trip to ASEAN Japanese Foreign Minister Yoko Kamikawa is planning to visit Brunei, Vietnam, Laos and Thailand from October 8 to October 13, according to a press release by the Foreign Ministry.