What do US experts recommend for Vietnam's logistics?

At the Vietnam Logistics Forum 2024, Prof. Dr. John Kent - University of Arkansas (USA) made many recommendations to develop the logistics industry in Vietnam.

Vietnam Logistics Forum 2024 with the theme "Free Trade Zone - Breakthrough solution to promote logistics growth" was organized by the Ministry of Industry and Trade in coordination with the People's Committee of Ba Ria - Vung Tau province.

At the forum, Prof. Dr. John Kent, University of Arkansas (USA), who has 30 years of experience developing US-China supply chains, gave a speech on the topic: Trends in developing free trade zones - Opportunities and recommendations for Vietnam's logistics industry. This is a topic that is attracting great attention from experts, businesses and managers in the context of Vietnam's increasingly deep integration into the global economy.

According to Professor Dr. John Kent, free trade zones (FTZs) are becoming a strong development trend in the world, contributing to promoting international trade and reducing barriers to trade. Vietnam, with its strategic location in the Southeast Asian region, has a great opportunity to take advantage of the free trade agreements (FTAs) that our country has signed, thereby expanding the international trade network and enhancing the role of the logistics industry in the global supply chain. We must strive to take advantage of the free trade agreements (FTAs) in promoting the formation of free trade zones (FTZs).

Prof. Dr. John Kent, University of Arkansas (USA), who has 30 years of experience developing US-China supply chains, gave a presentation on the topic: Trends in developing free trade zones - Opportunities and recommendations for Vietnam's logistics industry.

Professor John Kent assessed that Vietnam is at a very important time. Recently, companies around the world have been shifting their supply chains to Vietnam. At the same time, our country has a very special position, a neutral role when it can cooperate with both China and the US.

This expert also believes that Vietnam is in a new era. In particular, there are three important factors: dynamic leadership, the most favorable geographical position in the international trade flow, along with being in a good position to play a diplomatic role in an increasingly complex world.

In his speech, Prof. Dr. John Kent also shared some models and experiences in developing free trade in some countries in the region such as Singapore, South Korea, Malaysia, and China. Prof. Dr. John Kent recommended that Vietnam can make good use of the border with China to form free trade zones which are specialized areas for international trade, foreign investment, bonded warehouses, and export processing.

This expert also said that Vietnam can develop economic and border cooperation zones to encourage border trade and export processing, improve relations with neighboring countries and improve economic conditions in areas with many ethnic minorities. In these areas, it is possible to focus on component production, so that input materials from Guangdong province (China) can enter Vietnam for production and re-export or release to the market. Economic corridors such as Guangdong and Kunming (China) concentrate a lot of production activities. This is an important advantage for Vietnam when it has a border adjacent to this area.

This expert also assessed and expected that Vietnam could aim to become a free trade country by establishing many different free trade zones similar to the experience and model from Singapore.

Professor John Kent also shared that when looking at the story of China and the United States, Vietnam needs to clearly see the "China + 1" strategy. In particular, it is necessary to diversify supply sources, with the goal of reducing the risk of dependence through diversifying suppliers. Along with that, there needs to be a goal of avoiding tariffs from outsourcing production in your country.

Next, Professor John Kent also said that Vietnam needs to design value-creating centers. Specifically, designing a part, some areas (Free trade zone) or the entire country (Free trade country FTC) to become a free trade zone. In which, Vietnam thinks and considers ideas including tax exemption and visa exemption to encourage trade, not just in terms of goods.

Prof. Dr. John Kent also emphasized Vietnam's role as a gateway to the Greater Mekong Subregion. He also made assessments of public-private partnership models in developing free trade. At the same time, he also shared his experience related to diplomacy and diplomats in trade exchanges. In particular, this expert also emphasized Vietnam's neutral position in trade and diplomacy.

From the above practices, Professor John Kent has made 5 recommendations and proposals for logistics development for Vietnam from a supply chain perspective.

First, Vietnam needs to leverage its diplomatic neutrality vis-à-vis China and the United States (like Switzerland vis-à-vis global supply chains).

Second, implement a free trade zone (FTZ) for the entire country of Vietnam (FTC), possibly using the legal framework, experience and model from Singapore and Hong Kong (China). He also hopes that Vietnam will consider the plan, declaring itself a free trade country from January 1, 2025.

Third, the shift in infrastructure, including the recommendation that Vietnam build a new two-way railway to connect the capital Vientiane (Laos) with the East Coast of Vietnam. At the same time, build a railway connecting to China and Thailand. This will help Vietnam play a real role as a gateway to Southeast Asia.

Fourth, improve activities in the land border gate area between Vietnam and Yunnan (China); especially important is that between Vietnam and Guangxi (China).

Finally, Vietnam needs a strong company and network specializing in feeder ships and strong cargo consolidation to connect Vietnam with ASEAN and China.

Source: https://congthuong.vn/chuyen-gia-hoa-ky-khuyen-nghi-gi-cho-logistics-viet-nam-362320.html