Logistic development aims to promote trade facilitation

The event was co-hosted by the United States Agency for International Development (USAID) in collaboration with the Department of Industry and Trade of Ho Chi Minh City.

According to the Export Development Project, moving towards 2025 with a vision ahead to 2030, the southern city set an average annual export growth target of 9.5% during the 2021 to 2025 period.

However, due to the negative impact of the COVID-19 pandemic, export turnover in 2021 only reached US$44.9 billion, an increase of 1% compared to 2020.

Export turnover in the majority of export markets of the southern metropolis endured a fall over the past year, such as China down 8.7%, the US down 2.3%, and Japan down 14.7%. Despite the pandemic currently being brought under control, production and export activities of enterprises remain challenging to quickly recover.

Businesses face difficulties due to a labour shortage, high sea freight rates, a general lack of containers, along with loading and unloading equipment and shipping vessels, thereby putting great pressure on supply chains.

The biggest difficulty is the very high increase in logistical costs. Indeed, some export markets tend to increase the application of numerous pandemic control measures, leading to even more difficulties for businesses.

Ho Chi Minh City is in the process of intensifying administrative reform and promoting trade facilitation for businesses, with import and export goods through the green channel accounting for 80%, whilst those for the red channel make up 2%.

However, administrative procedures remain difficult and limited. In particular, specialised inspection procedures are inconvenient for all firms.

Participants therefore underlined the need for Ho Chi Minh City to speed up administrative reform and information technology applications to provide online public services. This should be done alongside promoting logistics development to reduce costs for local firms.

Furthermore, it can be considered necessary for businesses to capitalise on free trade agreements (FTAs) with tax reduction roadmaps. Enterprises therefore must pay close attention to the origin of goods, particularly with the possible imposition of trade remedies. In the event that enterprises are imposed tax for trade remedy avoidance, the tax rate will be many times higher.

As a way of creating favourable conditions for businesses to boost exports after the pandemic, Nguyen Khac Hieu, deputy head of the Import-Export Management section under the Ho Chi Minh City Department of Industry and Trade, said the city will provide maximum support for businesses through customs clearance procedures thanks to enhanced administrative reform, adding that the department also put a plan in place aimed at helping to improve the overall competitiveness of businesses.

Hieu went on to outline that in order to improve the efficiency of trade and export promotion, the department has carried out a plan which supports businesses’ participation in cross-border e-commerce platforms.