Investing in free trade zones, the biggest bottleneck is legality

Businesses are looking forward to the early investment in free trade zones to help businesses reduce logistics costs, but the biggest obstacle is the lack of legal status.

This is the opinion of many businesses at the Workshop on Free Trade Zones - Opportunities and Solutions to Realize It, held on the afternoon of December 1, in Ba Ria - Vung Tau.

Free trade zones help businesses reduce logistics costs

Most of the businesses attending the workshop agreed that investing in the Free Trade Zone (FTZ) in Ba Ria - Vung Tau will bring great benefits to businesses not only in terms of time but also logistics costs.

Mr. Thai Van Chuyen, General Director of Thanh Thanh Cong - Bien Hoa Joint Stock Company, said that currently, businesses are having to pay quite high logistics costs.

If there is a free trade zone, it will help businesses save costs because this zone is invested near seaports and airports, helping to shorten not only time but also reduce transportation costs.

“When there is a free trade zone, goods will circulate faster, which will help Vietnamese businesses have more opportunities to participate in the global supply chain,” Mr. Chuyen commented.

Businesses participated in discussions at the workshop.

Sharing a similar opinion, Mr. Dang Thanh Son, Deputy Marketing Director, Saigon New Port Corporation, said that the establishment of the free trade zone will help to minimize the management procedures of state agencies, thereby minimizing negative issues.

According to Mr. Son, free trade zones located next to seaports and airports will optimize many costs for businesses, and businesses will benefit greatly.

Regarding the locality that is planning to invest in a free trade zone, Mr. Pham Quang Nhat, Director of the Department of Industry and Trade of Ba Ria - Vung Tau province, said that the locality has all the factors such as geographical location, seaport infrastructure, multimodal transport infrastructure, etc. to form a free trade zone associated with the seaport.

In particular, Ba Ria – Vung Tau has the advantage of Cai Mep Thi Vai port cluster located on the international shipping routes of Asia – Europe and Asia – America through the East Sea – one of the most important, busiest and vital shipping routes in the world.

In 2024, Cai Mep port area will be in the top 30 largest container port clusters in the world, with the third largest number of routes to Europe and America in Southeast Asia, after Singapore and Malaysia. In addition, Cai Mep - Thi Vai has the presence of most of the world's major shipping lines such as MSC, Maersk, CMA-CGM, Evergreen, ONE...

“In the coming time, the Cai Mep – Thi Vai port cluster will be developed, upgraded, and modernized as an international gateway port into a regional and world-class international transit port with the orientation of a green port and a smart port. This is one of the extremely important resources for the formation of a free trade zone associated with seaports in the Cai Mep Ha area,” Mr. Nhat informed.

According to Mr. Nhat, currently, the trend of shifting investment capital flows, global trade flows, the trend of increasing ship sizes, the trend of increasing demand for maritime freight transport makes it very favorable for Ba Ria - Vung Tau to build a free trade zone.

The biggest obstacle is legal.

Although free trade zones are considered to bring many benefits to businesses, up to now the whole country has not invested in any FTZs , the biggest reason is the lack of legal corridor for this type.

Ms. Cao Cam Linh, Head of Research Department, Vietnam Logistics Human Resources Development Association, pointed out the difficulty that localities and enterprises want to invest in free trade zones but do not know where to start due to lack of legal corridor. Currently, only Da Nang has been approved by the National Assembly to pilot the establishment of free trade zones.

Talking on the sidelines of the workshop with reporters from the Investment Electronic Newspaper - Baodautu.vn , Mr. Tran Chi Dung, General Secretary of the Vietnam Logistics Service Enterprises Association, also stated that the biggest challenge of investing in free trade zones that has not been resolved after many years is the issue of legal basis for investing in FTZs.

“I think that the legal issues of free trade zones can be included in a chapter of the Commercial Law to have a legal basis for implementation. Then, the list of open areas should be issued gradually, and when it is effective, it can be opened,” Mr. Dung suggested.

Businesses participating in the workshop discussed solutions to speed up the process of building free trade zones.

On the side of the State management agency, Mr. Tran Thanh Hai, Deputy Director of the Import-Export Department, Ministry of Industry and Trade, admitted that currently, there are no legal documents related to investment in free trade zones located in industrial parks even though infrastructure and human resources are ready.

Currently, Da Nang is the first locality to be approved by the National Assembly to pilot the implementation of free trade zones. Mr. Hai said that it is necessary to quickly supplement regulations on investment in free trade zones in economic zones and industrial parks to reduce logistics costs.

However, Ms. Cao Cam Linh noted that instead of copying the free trade zones of Da Nang or some countries in the world, each locality should build a free trade zone based on its own strengths to be effective and easily approved by competent authorities.

Another issue that businesses have suggested is that investment in free trade zones should be in key areas, where there are large import and export goods such as seaports, airports, and road border gates, and should not be invested in localities without advantages to avoid waste.

Source: https://baodautu.vn/dau-tu-khu-thuong-mai-tu-do-diem-nghen-lon-nhat-la-phap-ly-d231460.html