At the 27th ASEAN Summit, November 18-22, in Malaysia, leaders of the ten ASEAN member nations signed the 2015 Kuala Lumpur Declaration officially establishing the AEC as of December 31.
The 10 member nations of the AEC that form the free trade region comprise Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.
“The trade deal represents significant new revenue streams for Vietnamese fishermen and aquaculture farmers from the important free trade region with a consumer market of 600 million and an annual GDP of US$2,000 billion,” said the MoIT.
“Its formation could be one of the most significant developments to date in the industry’s history.”
The AEC is another step toward reshaping the nation’s economy by working with domestic and foreign businesses, foreign purchasers, and government leaders to find new trade opportunities and making Vietnam an economic hub for the region.
“Growing exports within the AEC provides more revenue and job creation opportunities for the nation’s producers and agribusinesses,” said a representative for the MoIT’s International Cooperation Department.
Department personnel have participated in numerous meetings with regional importers during recent trade missions – particularly as it relates to rice, seafood, aquatic products and vegetables – which historically have accounted for 30% of exports to AEC member nations.
“The elimination of import tariffs and removal of barriers to trade brought about by the AEC create some competitive advantages for Vietnamese businesses that hitherto did not exist,” said the representative.
The rep said the AEC presents ample opportunity for success if domestic businesses can retool their technologies with a focus on improving overall quality of their products, efficiencies in the production process and take a more innovative approach to product development.
Official statistics show ASEAN member nations represented the sixth largest export market for seafood and aquatic exports the rep underscored, saying that economists at the MoIT believe it is reasonable to expect a 5-7% increase in shipments to the region in 2016.
He emphasized it is important to keep in mind that globally promoting Vietnam’s agribusinesses and family-owned agricultural operations is an important component to growing the nation’s trade portfolio.
Working with international marketing and development teams in Vietnam and our network of trade offices around the globe, we have been able to support the country’s small businesses and work out free trade agreements with other countries and regions comparable to the AEC trade deal.
“Through October the five largest seafood and aquatic markets in descending order were the US, EU, Japan, China, and Republic of Korea,” the rep said and if we can increase sales next year by 5-7% for each market it’s easy to see how significant the impact could be.
If the stars line up, for just 2016 alone, economic experts report exports of seafood and aquatic products in the top six markets could potentially expand by 30-35%. For comparison purposes in the last five years the nation’s total exports for these markets expanded 33.6%.
So it is conceivable that seafood and aquatic exports in 2016 could equal or exceed the industries growth for the whole of the last five years combined if the nation’s fishermen and aquaculture farmers can grasp the opportunities.
“Growing our international sales is a critical part of the government’s strategy to expand our business and develop the Made-in-Vietnam brand globally,” said the representative and we should all be appreciative of the efforts of the government to develop these new sales channels.
According to statistics from the Vietnam Association of Seafood Exporters and Producers (VASEP), Vietnam and Thailand remain the two leading suppliers of seafood and aquatic products for the global marketplace.
VASEP General Secretary Truong Dinh Hoe said the two most important obstacles for exports in the AEC region and globally relates to food safety and hygiene matters as Vietnam’s seafood, in particular, has been tarnished by food safety violations of a few non-responsible businesses.
“If the poor practices of these relatively few negligent businesses can be overcome and the image of the industry improved many opportunities will follow both in the AEC region and internationally,” said Hoe.
“I cannot overemphasize the importance of ensuring food safety and hygiene to success within the AEC trade bloc as all of the advertising and marketing cannot erase the damage done by lack of attention to fundamental food safety.”
Hoe said those who utterly disregard the importance of food safety are a scourge on the industry and the reputation of the nation and handicap all those honest fishers and businesses that follow the rules.
With the AEC formation, VASEP believes the time is ripe for Vietnam to develop a new consortium of Vietnam based fishing and seafood companies that have the forward thinking savvy to not only lead— but revolutionize the industry.