A panel titled “Repositioning Việt Nam and ASEAN in Global Value Chains” was held as part of the Autumn Economic Forum. — VNS Photo

HCM CITY — ASEAN member states should focus more on regional trade and co-operation as opposed to solely competiting with each other, according to a discussion panel on positioning ASEAN on the global map in HCM City's Autumn Economic Forum (AEF) on October 27.

Nguyễn Thị Lam Tuyền, general director, chairwoman of the board and country holding officer of ABB Vietnam, said that ASEAN is an increasingly attractive market thanks to several enablers, including the huge market of over 680 million people, rapid urbanisation and strong digital infrastructure.

"ASEAN is one of the most dynamic regions in the world."

ASEAN countries are not only keeping low labour cost, but also invest greatly in advanced manufacturing, and there is also the increasing availability of engineering talent, she added.

Sasha Drey, economist at the Economic Policy Unit for Việt Nam under the World Bank in Việt Nam, said that every year, 15 per cent of foreign investment inflows are going into ASEAN countries, also open to trade.

ASEAN has a wide range of trade agreements, both within its member and also with other continent countries.

ASEAN is very well integrated into global value chain, and there is a lot of diversification of supply chain over the last 20 years in member countries, such as automobile and EV in Thailand, assemblies in Vietnam, semiconductor fabrication and testing in Malaysia and Singapore.

However, regional value chains are more limited, representing on a third of global value chain participation of the region compared to 70 per cent within the EU.

There are still gaps in economic integrations, he said. Out of the approximately $2 trillion of exports every year, only 22 per cent stay in the ASEAN region, compared to the EU's 60 per cent.

This means that ASEAN members may be more exposed to external demand from other countries.

"Uncertainty is no longer uncertain. We know that we are living in a more volatile world. And if you're dependent on consumption in the EU, in the US, or other advanced economies, it makes you more vulnerable."

If resources within ASEAN can be better allocated, such as exploiting affordable production wage in one country and high productive capital in another, members can benefit better from existing trade, he said.

A wood processing factory for export. Experts at the panel agree that ASEAN countries need to co-operate and take advantage of each other's strength. — VNA/VNS Photo

​Similarly, Ngô Sỹ Hoài, vice president and general secretary of Việt Nam Timber and Forest Products Association, said that the members should leverage their advantages in wood manufacturing (which includes rich forest resources, low production costs and the bloc's economic dynamism) to move from competition to cooperation in order to uplift the region's overall competitiveness. 

Phạm Quỳnh Mai, deputy head of International Market Development and Multilateral Trade Department under the Ministry of Industry and Trade, said that ASEAN member states should address non-tariff barriers hindering trade, as factors such as custom procedures, certifications and logistics all add expenses and ineffiiencies.

ASEAN countries needs to work together in order to exchange information and building capacity for member states in order to avoid unnecessary duplication regulation, testing, certification procedures and rules of origins – the latter of which is especially important considering the fact that ASEAN members are negotiating a lot of free trade agreements.

Additionally, custom procedures need to be transparent and straightforward, and countries should enhance the use of electronic documents in processing the procedures.

Other experts highlighted the importance of specialising in specific stages of the regional value chain as opposed to trying to compete on all production stages, and how to combine these production specialisations into effective regional value chains.

One factor that can facilitate this is encouraging more cross-border regional investment, as investment is often the prerequisite for more trade and develop relations. In fact, ASEAN's 2025-30 plan for promoting FDI is not just about "selling ASEAN to global investors", but also "selling ASEAN to ASEAN."

The ongoing AEF will take place until October 29, with more discussion opportunities on a wide variety of topics to foster sustainable growth not only for Việt Nam, but also other countries. — VNS