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Vietnam eyes membership of global supply chain by 2020: Official
Vietnam looks forward to becoming part of the global supply chain by 2020 when its businesses can supply industrial products to the regional and global economies, a trade and industry official said Wednesday.
The country’s low labor costs could help make its products more competitive, Phan Dang Tuat, Director of the Ministry of Industry and Trade’s Institute for Industry Policy and Strategy, said.
Engineering and machinery, apparel and footwear, which are the industries that have a large base of skilled workers in Vietnam, are expected to be soon integrated in the global chain.
These industries have contributed greatly to the country’s export revenues, he said while speaking at a seminar in Ho Chi Minh City.
Ho Nhat Quang, Product Quality and Project Manager at Artus Vietnam, an aerospace company, said local businesses should “renovate” their operations and management and adopt international standards to be able to join the global chain.
Quang’s France-based company supplies accessories and parts to aircraft manufacturer Airbus and would soon become a supplier to Boeing, he told the seminar.
Antonio Berenguer, trade counselor at the Delegation of the European Commission to Vietnam, said the supply chain is a marketplace for businesses to come with their comparative advantages and enjoy the advantages from others, creating cheap prices for the world market.
However, it is now too “big” for Vietnam, which has only the advantage of low labor costs but faces competition even on that front from growing rivals like Cambodia, Laos and Bangladesh, he said.
Vietnamese businesses are not yet strong enough to become part of the chain on a global scale and should therefore first form a local chain in the country.
The government could facilitate the development of the local chain in its early stages, he said.
Local businesses can expand into the regional market once they became strong suppliers in the chain, he said.
However, the chain would also mean that businesses could depend too much on their suppliers and some governments would use it unfairly against others, he warned.
Refusing to supply or increasing export tariffs would be the likely “traps” in the chain, the counselor explained, adding free trade agreements would be a way to escape them.
Minh Quang
thanhnien
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