Vietnam launches Trade Facilitation Agreement implementation program

TFA could reduce Vietnam’s trade costs by 20%, according to the World Trade Organization, more than any Free Trade Agreement tariff reductions. Read more

World Bank: Structural reforms remain critical to Vietnam’s growth

Thanks to robust domestic demand and export-oriented manufacturing, Vietnam’s medium-term outlook remains favorable, with GDP expected to expand by 6% this year. Vietnam’s growth was accompanied by low inflation and widening current account surplus. Risks that could adversely affect medium term prospects include continuing delays in implementation of structural and fiscal reforms. Read more

WB report: Vietnam’s pension system facing serious challenges

According to WB experts, the official pension system is facing major challenges which will become increasingly serious when the aging process accelerates. Currently, the population aged 65 and older in Vietnam is 6.5 million, but the number is expected to increase by 3 times to 18.4 million by 2040. In 2014, Vietnam made reforms but they were not fast and powerful enough to restore financial balance of the retirement fund. Before the amendment, economists forecast that the fund would be in deficit in the early 2020s and the reserves will be exhausted by mid-2030. Read more

Three keys: NCTF, CMAA, Customs-Business Consultations in the WTO Trade Facilitation Agreement

During his Jul 28-29, 2016 visit to HCMC and Hanoi, Deputy CBP Commissioner Kevin MacAleenan emphasized that three pre-requisites for implementing the WTO Trade Facilitation Agreement are needed to establish the institutional framework, which includes: (1) National Committee on Trade Facilitation, (2) Customs Cooperation (Customs Mutual Assistance Agreement), and (3) Government – Business Consultations on all laws and regulations affecting imports and exports. Below are details of the commitments in the TFA. Read more

ADB Affirms Support For Vietnam, Cautions on SOEs

The ADB anticipates strong growth of 6.7% in 2016 and 6.5% in 2017, but sluggish SEO reform acts as a brake on even faster expansion. Read more

Vietnam’s TPP ratification to take up to 2 years: lead negotiator

It will take up to two years for the Trans-Pacific Partnership (TPP), which was reached after five years of talks by 12 countries in Atlanta on Monday, to be ratified in Vietnam, the lead Vietnamese negotiator of the trade deal said. “Other countries also pledge to provide technical assistance to Vietnam in fulfilling its commitment,” he added. Read more

World Bank: Are minimum wages too high?

The World Bank’s most recent update on Vietnam’s economic developments concluded that (1) a high minimum wage, if enforced, will reduce formal employment; (2) outside the government sector, Vietnam’s minimum wages have risen rapidly in recent years, outstripping productivity growth, ; and, (3) , Vietnam’s private sector minimum wage is high relative to other countries. Read more

Minimum Wage 2016 to be decided on Sep 3

The National Wage Council (NWC) will meet again on Sep 3, after it was unable to reach agreement in two earlier meetings on Aug 3 and 25 . The NWC will submit a recommendation in September for the Minimum Wage 2016 adjustment to the Government for a decision, which will be implemented not less than 90 days later, on Jan 1, 2016. The Vietnam Textiles and Apparel Association has proposed a  6 or 7 % adjustment, VCCI proposed 10%, and the VGCL (Vietnam General Confederation of Labour) proposed 16.8%. Read more

Ways & Means Committee approves Trade Promotion Authority (25 – 13)

only two House Democrats joined the Republican majority, highlighting that they generally oppose the TPP and other free trade agreements. In the Senate Finance Committee, seven Democrats favoured the bill, and the Finance Committee approved the bill by a 20-6 vote. House Minority Democratic Leader Pelosi criticized the bill, but she stopped short of saying she’ll vote against the TPA measure. House Speaker John Boehner (R-Ohio), said, “We’re going to need some bipartisan support.” Senate Majority Leader Mitch McConnell (R-Ky.) said, “It’s my hope to pass it during the current work period,” which is before Memorial Day . Read more

Asia Development Outlook 2015 – Vietnam Summary

Rising foreign direct investment helped to accelerate economic growth to 6.0% in 2014. Inflation abated, and robust external accounts enabled the rebuilding of foreign reserves. Growth is forecast to edge higher again this year and next, while inflation remains relatively low. Policy challenges are to reform banks and state enterprises and to integrate domestic firms into global value chains. Read more