|Illustrative image (Source: asean.org) |
Over the past weeks, Vietnamese-backed TH Group has been busy promoting its export of products including fresh milk, safe foodstuffs, and organic agricultural products to Singapore.
On February 25, TH and HAO Mart, the leading retail supermarket system of Singapore, inked an MoU on strategic cooperation on consuming and promoting these products.
TH Group sees Singapore as a big potential market in Southeast Asia. Over the past years, it has conducted a series of trade promotion activities in Singapore.
“TH Group believes all world-class e-commerce brands have set foot in Singapore, so our official presence in this nation, which will then be expanded to Malaysia, will demonstrate the strength of TH Group’s brand in Asia,” said Hoang Thi Thanh Thuy, director of International Marketing at TH Group.
Last December, TH Group and Singapore’s L’earth Group specialising in foodstuffs and drinks, jointly implemented a project to launch the Singapore-Vietnam foodstuff exchange, which will be valid until December and is applicable to many e-commerce platforms, retail stores, and supermarkets in both countries.
One of the reasons behind TH Group’s plan to penetrate Southeast Asian is the removal of tariffs under the regional commitments, and the region’s big purchasing power and digital cooperation cemented.
“This will enable our group to further cooperate with partners not only in Singapore but also in other regional nations,” Thuy said.
Vietnam is now also a big magnet for businesses from other regional markets. It is expected that Thailand’s Central Retail Vietnam will put into operation its commercial Go! Lao Cai centre next month in the northern province, with total investment capital of over 12 million.
This 30,000 square-metre centre will be the 39th project by Central Retail in Vietnam. One year ago, the group announced a plan to invest $1.1 billion in the Vietnamese market before 2025. As of late 2021, the group has invested $211 million in the country.
Nurturing intra-bloc ties
The 28th ASEAN Economic Ministers’ Retreat, held virtually on March 16, ended on a high note with the ministers charting the ASEAN’s Economic Work Plan for 2022, notably the endorsement of ASEAN Priority Economic Deliverables 2022.
Among the highlights, ASEAN economic ministers launched the ASEAN Trade in Goods Agreement (ATIGA) upgrade negotiations, which are crucial for intraregional trade and promoting a more connected, inclusive and competitive region.
“The revision of the ATIGA should aim at providing better support for enterprises in utilising the deal, especially through lowering compliance costs and enhancing trade facilitation measures,” said Deputy Minister of Industry and Trade Tran Quoc Khanh.
Under ATIGA’s commitments, ASEAN members committed to removing tariffs to 98.6 per cent of the total goods and products in 2021. Brunei, Indonesia, Malaysia, Philippines, Singapore, and Malaysia have eliminated 99.3 per cent of the tariffs and the remaining four (Cambodia, Laos, Myanmar, and Vietnam), 97.7 per cent.
The ASEAN economic ministers also agreed to extend the MoU on the implementation of non-tariff measures on essential goods until 2024 and to expand the present list of essential goods while emphasising the importance of conducting an in-depth study of the impact on the trade flow of essential goods.
To facilitate intra-bloc investment flows, Vietnam has also approved the fourth protocol amending the ASEAN Comprehensive Investment Agreement. The protocol mentioned a prohibition of performance requirements and fundamentals in the Agreement on Trade-Related Investment Measures that was agreed by all members of the World Trade Organization.
This means that no member state is allowed to enforce regulations that discriminate against foreign goods from other member states or implement any measure that might provoke obstructions to other member states to invest or conduct trade in the region.
Promoting a digital climate
At the 28th ASEAN Economic Ministers Retreat, economic ministers also underlined the urgent need to deepen cooperation in the digital and green economies, with the implementation of the Framework for Promoting the Growth of the Digital Startup Ecosystem, and the establishment of technical committees on Digital and Green Economy towards greater collaboration on trade facilitation, fintech, digital identities, consumer trust, and circular economy.
All the member states also vowed to strengthen regional digital integration and transformation by commencing negotiations for the ASEAN Digital Economy Framework Agreement by 2025 for a coherent, harmonised, and rules-based approach to progressing ASEAN’s cooperation in the digital ecosystem.
“The bloc needs to consider taking advantage of new factors such as digital transformation, digital economy, circular economy, green technology, renewable energy and high-quality human resources to participate more deeply in regional and global supply chains and improve the attractiveness of the ASEAN market,” stated Prime Minister Pham Minh Chinh. “Vietnam is also accelerating the digitalisation of the economy in favour of individuals and businesses, and to facilitate intra-bloc e-trade activities.”
According to the Asian Development Bank’s (ADB) latest report on the status of Southeast Asia post-pandemic, the promotion of digital transformation and connectivity among member states is one of the biggest solutions to drive the bloc’s economic growth forward. In this context, Vietnam boasts great potential.
“Compared to other ASEAN economies, Vietnam is leading the way in launching 5G technology. It also boasts the lowest internet access cost, the third-largest number of internet users, second-highest mobile penetration, and second-fastest average mobile connectivity speed in the region,” said the ADB report.
Also rolling in the IT wave, TH Group is now applying high technologies in all of its projects and exports, which are largely produced at the group’s $1.2 billion venture in the central province of Nghe An, featuring a state-of-the-art dairy cow farm and milk plant, which currently has a capacity of 500,000 tonnes of milk a year. “Under its long-term strategy, TH Group will continue expanding in many other Asian markets such as Malaysia and Indonesia,” Thuy said.