Infrastructure development creates momentum for exports to neighboring markets

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Goods trading activities at Nam Can international border gate. Photo: H.Nu
Goods trading activities at Nam Can international border gate. Photo: H.Nu

There are barriers and restrictions on border trade

With more than 5,000km of border with China, Laos and Cambodia, it is located in the center of Southeast Asia – a region that is highly appreciated for its transformation, strong development and growth in trade activities, Vietnam possesses many strategic advantages and conditions to expect to become a trade center in the region, becoming an important trade connection gateway between neighboring countries and other countries in Southeast Asia and developed economies in the world.

Ms. Nguyen Thi Mai Linh, Head of Trade Facilitation Department, Department of Import and Export (Ministry of Industry and Trade), and border trade is facing new development opportunities. In which, the land border line with a system of border gates, roads, transnational economic corridors, economic cooperation zones, border gate economic zones, free trade zones and tax bonded zones has been established and is being built and upgraded, and is considered one of the main and important gateways in economic development, trade and investment cooperation between Vietnam and ASEAN countries and China. The ASEAN-China free trade area was established, creating a great driving force for economic, trade and investment cooperation between the two markets of ASEAN and China…

Besides the advantages, border trade along the land border line still has many difficulties. Although infrastructure in border gate areas of border provinces has received investment attention, especially transportation infrastructure, the logistics system still has some problems such as difficulties in exploitation of railway with China due to lack of uniformity in rail gauge; steep river system with many reefs when exploiting for transportation; there is no logic center with full basic functions. Therefore, the cost of logistics services remains high, and the connectivity between regions and businesses faces many limitations. On the border with Laos, infrastructure development, especially the construction of roads connecting to border gates and inter-district roads in some areas, is still slow and not commensurate with each other, not meeting the potential and needs of trading, exchange and circulation of goods in border areas.

With major partners like China, goods exported through border gates in the Vietnam-China border provinces are mainly agricultural products and fruits; the number of types of agricultural products and fruits exported is also limited compared to Vietnam’s potential for producing and processing agricultural products and fruits. In addition, some agricultural products have not yet signed the Quarantine Protocol, so 100% of the shipment must be physically inspected, affecting customs clearance time.

For the border line with Laos, produced goods are on a small scale, mostly unprocessed raw materials, seasonal, unstable, the number of goods is small, low value, not yet formed. Concentrated production areas, standards, traceability, branding have not yet been applied, and production and consumption chains have not yet been formed. On the border with Cambodia, Vietnam’s exported goods to Cambodia have a similar structure to those of Thailand and China and are subject to fierce competition in quality, design and price.

Increase investment in infrastructure development in border areas

From a local perspective, a representative of Nghe An Department of Industry and Trade said that currently the province has nearly 70 Nghe An enterprises operating import and export activities with Laos. Enterprises in the area mainly operate through Nam Can international border gate with a total turnover in 2023 reaching USD 100.66 million, of which export turnover is USD 27.65 million, import turnover is USD 73.01 million. Nghe An – Laos border trade in recent years has developed but is not commensurate with the potential of each side. Import-export turnover for the Laos market is low (accounting for about 5% of the total export turnover of Nghe An province).

To promote the development of border trade, the Department of Industry and Trade of Nghe An believes that it is necessary to have a roadmap and increase investment in infrastructure development in border areas, especially in border gate areas with favorable conditions for development to promote Vietnam – Laos border trade. At the same time, concretize and diversify trade promotion and export promotion support activities. Currently, the Vietnam – Laos Border Trade Agreement encourages trade promotion activities at the Vietnam – Laos border. In the future, it is necessary to diversify types of trade promotion to Laos such as: organizing fairs. Vietnamese goods in Laos; conference connecting supply and demand directly and online; provide financial support for provinces to organize trade promotion activities with Laos and Thailand…

In An Giang, Mr. Le Trung Hieu, Director of the Provincial Trade and Investment Promotion Center, said that An Giang is a province located in the key economic region of the Mekong Delta with a contiguous border of two provinces of Kandal and Takeo (Kingdom of Cambodia), with 5 border gates (2 international border gates of Tinh Bien, Vinh Xuong; 2 main border gates: Khanh Binh, Vinh Hoi Dong and 1 sub-border gate of Bac Dai).

An Giang has great potential to develop inter-regional and inter-national border trade economy due to its central location in 3 major cities (Ho Chi Minh City, Can Tho and Phnom Penh – Kingdom of Cambodia). To maintain and continue to promote the strength of trade in the border area, the province has continued to promote investment in building technical infrastructure, gradually ensuring to serve the needs of economic development in border with the goal of 2025, vision to 2030, making An Giang an important goods transit point for the region and the whole country into the Cambodian market and towards the markets of ASEAN countries.

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