[HANOI] Vietnam will continue to pursue and promote economic integration by negotiating and signing free trade agreements (FTAs) with other countries, said a senior government minister on Friday (Jul 7).

“Vietnam has established free trade relations with most of the world’s largest economies, providing a solid foundation for enhancing trade and investment, as well as strengthening economic integration with the region and globally,” said Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan at the Singapore Regional Business Forum (SRBF) in Hanoi.

He noted that Vietnam – one of the fastest-growing economies in Asia last year – will seek opportunities to establish more FTAs to spur trade and economic growth.

To date, Vietnam has negotiated and participated in 18 bilateral and multilateral FTAs, of which 15 are already in force. These include the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the European Union-Vietnam FTA and the UK-Vietnam FTA.

And of the 15, Tan noted that nine involve both Vietnam and Singapore as members. This, he said, is proof of the closeness, similarity of views and interests between the two countries.

The relevance and importance of FTAs also came up for discussion during a separate session earlier in the day.

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Singapore’s Second Minister for Trade and Industry Tan See Leng stressed that “trade should be free-flowing and FTAs should be the way to go”, so long as the level of technology or equipment involved is not sensitive or confidential.

“There was an estimate done globally, that with all of this increasing isolation and barriers and tariffs, the potential disruption is close to 7 per cent of GDP. To be disrupted to that kind of extent, it’s very significant,” he said. “My sense is that, at some point, there needs to be some level of rationalisation, in terms of how trade can be facilitated, and it can be a lot more often.”

Dr Tan shared how Singapore has 27 FTAs, with the low or zero tariffs allowing the country to keep its ports open and operate at business-as-usual levels, even during more than two years of the pandemic.

“It’s important that we continue to work with like-minded partners. For a small state like Singapore, in a rapidly growing region like Asean, I don’t think there’s a need for us to erect trade barriers,” he added.

This year’s SRBF, the signature event of the Singapore Business Federation, was held outside of Singapore for the first time. The theme of the day-long forum was “Strengthening Regional Collaboration for Sustainable Growth”.

A group of speakers at another plenary discussed the topic of regional sustainability opportunities for investors, given how sustainable practices are becoming mainstream in businesses today, and demanded by shareholders, customers, regulators and employees.

Nguyen Quang Vinh, vice-president of the Vietnam Chamber of Commerce and Industry, said that the global sustainability movement has opened the door for Vietnamese companies in areas such as energy consumption, supply chains, data privacy and security.

Glenn Hughes, the country head of Logos Group Vietnam, said the days of customers making key decisions purely based on costs are over. Many will consider projects and products only after taking into account the green factors.

“Now, it’s about how to take (the green transition) further and become more efficient (in terms of costs),” he said.

Sharon Tay, chief executive of the Keppel Asia Infrastructure Fund, said a greater market demand for investments in sustainability could potentially drive costs down over time.

There is also a need for a blended financing mechanism, she said. This means the strategic use of catalytic capital from public and philanthropic sources to mobilise additional investment from the private sector for green projects. 

“We always need regulations and financial incentives from the government,” said Tay. “But it needs to be clear (for us to) understand where we are investing in and the risks that we are taking so that we can price it in accordingly.”

Ong Kim Pong, the regional CEO of South-east Asia at PSA International, underlined the importance of understanding the pain points and selecting the right products to achieve the company’s sustainability goals.

He noted that PSA International has moved into “supply chain orchestration”, where it needs to see “the flow of goods from one point to another point”. This, he said, is “where digitalisation and sustainable ecosystem come into play”. 

“There’s a need to collaborate with like-minded parties to create whole ecosystems in order to find solutions,” said Ong. “And besides having like-minded partners, we also need to have sustainable partners. It’s very much like Vietnam’s national flower, the lotus – it needs to be pure and committed.”