The Government and domestic businesses need appropriate strategies and solutions to successfully integrate into the ASEAN Economic Community (AEC) that will be established by 2015 and create favourable conditions for Vietnam to raise its position and prestige at ASEAN forums.

The suggestions were made at a recent conference on the country’s joining the ASEAN Economic Community held by the University of Economics and Business under the Vietnam National University-Hanoi.

During the conference, experts stressed that proactive participation in the AEC will bring great benefits to the bloc’s member countries including faster economic growth, better job generation and additional foreign direct investment (FDI) inflows.

The AEC will also help enhance ASEAN countries’ presence in the global production and value chain, and allow them to enjoy more benefits from regional trade and investment.

The community will attach special importance to promoting the target of narrowing the development gap between member countries, an issue of great interest to Vietnam .

According to recent research by the Hawaii-based East-West Centre (EWC), ASEAN economies are estimated to see a 5.3 percent increase in their real income thanks to their participation in the AEC .

The paper also showed that the bloc’s businesses will have better access to the large markets in China , Japan, the Republic of Korea, Australia, India and New Zealand through separate Free Trade Agreements (FTAs) between ASEAN and each of the major economic partners and the Regional Comprehensive Economic Partnership (RCEP).

Therefore, Vietnamese firms will be able to penetrate deeper into the global and regional production and supply chain.

After December 31, 2015 , most goods and services traded between ASEAN countries will be taxed at zero percent .

Through the ASEAN + 1 Free Trade Agreements between the association and its partners, Vietnamese exports will also receive a zero percent tariff treatment in the markets of China, Japan, the RoK, India, Australia and New Zealand. FDI inflows in ASEAN, including Vietnam, will be facilitated due to the region’s propitious investment environment.

However, the big economic development gap between Vietnam and ASEAN-5 countries (Indonesia, Malaysia, the Philippines, Singapore and Thailand) along with the country’s difficulties in the process of realising the AEC is an emerging concern in addition to the challenges posed by the global economic slowdown.

Moreover, Vietnamese firms are also warned about cut-throat competition as ASEAN nations remove all their non-tariff barriers after 2015. These businesses may lose market share in both domestic and regional markets.

Alarmingly, the Vietnamese business community has not yet made sufficient preparations to take full advantage of opportunities from the AEC . They need to boost their operational capacity and the quality of products and services, plus trade promotions.

In addition, State management agencies should have suitable policies to orient and assist home firms so that they can take the opportunities and overcome challenges arising from the establishment of the AEC.

According to Central Institute for Economic Management (CIEM) Deputy Director Vo Tri Thanh, ASEAN is a large-scale potential market with a population of 600 million and a regional GDP of around 2,200 billion USD.

Vietnam needs to hastily meet requirements and regulations related to the establishment of the AEC so that ASEAN will meet the goal of become a relatively united institution with harmonised customs and technical level, added the official.

ASEAN includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.-VNA