(VOV) – Vietnam is on track to becoming the first Southeast Asian nation to ratify the landmark Trade Facilitation Agreement (TFA) of the World Trade Organisation (WTO).
In December 2013, WTO member countries unanimously endorsed the TFA at the conclusion of the Ninth WTO Ministerial Conference in Bali, Indonesia.
To date, only four WTO members — Hong Kong (China), Singapore, the US and Mauritius — have secured domestic acceptance of the TFA.
The TFA does not become effective until two-thirds of WTO members have completed their domestic ratification process, as essential part of which is the formation of a National Committee on Trade Facilitation (NCTF).
The Vietnam government recently announced it has taken initial steps to forming the NCTF, which will be comprised of public and private sector stakeholders, to provide oversight in implementing the TFA.
The TFA is vitally important and has the potential to fundamentally reform global customs practices said Nguyen Toan, deputy head of the International Cooperation Department under the General Department of Vietnam Customs.
Most importantly it will substantially reduce the costs and time associated for Vietnamese businesses to ship goods across borders into other countries, Toan stressed.
Secondarily, it’s the perfect example of how breaking down barriers to trade can unlock new opportunities for Vietnam, and it’s a particularly important win for small and medium sized businesses.
The agreement simplifies and clarifies customs procedures and mandates that customs procedures be transparent and provides standardization and uniformity to issues dealing with importing and exporting activities for all WTO member countries.
These improvements will greatly facilitate trade across borders, thereby reducing the costs in both time and money for Vietnamese international traders and ultimately the nation’s consumers.
Echoing Toan’s views, Pham Thanh Binh, consultant for a USAID project said, according to an April survey by the World Customs Organisation (WCO), only 23 out of 66 members have established a NCTF to date.
The greatest benefit of the TFA is that it introduces the element of predictability in the form of rule of law and good governance for business embarking on international trade and business ventures, Binh underscored.
In order to efficiently and effectively conduct international trade businesspersons need to reasonably predict the outcome of transactions they enter into. The TFA takes the guesswork and related risks out of the equation.
It’s a sort of ‘Uniform Business Code’ governing all aspects of international trade that Vietnamese businesses should embrace if they hope to be competitive in the global marketplace.
Toan affirmed the General Department of Vietnam Customs will finalize establishing the NCTF in Vietnam and submit it for government approval soon, achieving a milestone in global integration.