MINISTRY OF EDUCATION AND TRAINING FOREIGN TRADE UNIVERSITY MASTER THESIS TRADE FACILITATION OF THAILAND AND LESSONS FOR VIETNAM Specialization: International Trade Policy and Law TRINH THI HUYEN Hanoi – 2019 MINISTRY OF EDUCATION AND TRAINING FOREIGN TRADE UNIVERSITY MASTER THESIS TRADE FACILITATION OF THAILAND AND LESSONS FOR VIETNAM Major: International Economics Specialization: International Trade Policy and Law Code: 8310106 Full Name: Trinh Thi Huyen Supervisor: Doctor. Phan Thi Thu Hien Hanoi – 2019 i DECLARATION I hereby commit that this thesis is my own study and there is no information used with the unauthorized data source. The research contents in this topic are completely honest and have not been used or published in any form. The information and data of other authors and other organizations referenced in the thesis are fully cited and annotated.
Due to limited time period and knowledge, this thesis faces with flaws and inevitably contains errors. In addition, when the author carried out the research about the trade facilitation implementation of Thailand, it still exists the shortage in figuring out the details because of a big language barrier (a huge amount of information is in Thailandese). Therefore, I look forward to receiving the contributing ideas to finish this study. I would like to express my sincere and grateful thanks to Doctor.
Phan Thi Thu Hien, who enthusiastically guided me under the process of completing this study. Student: Trinh Thi Huyen ii TABLE OF CONTENT DECLARATION.i LIST OF FIGURES.iv LIST OF TABLES.vi ABBREVITION LIST.1 CHAPTER 1: OVERVIEW OF TRADE FACILITATION. Trade facilitation definition. Impact of trade facilitation.
Trade facilitation main indicators. WTO’s Trade Facilitation Agreement (TFA). Overview of TFA establishment. Main contents of TFA.
Current implementation of TFA.19 CHAPTER 2: THE CURRENT IMPLEMENTATION STATUS OF TRADE FACILITATION OF THAILAND. Overview of Thailand. Thailand geographical location. Transportation and logistics structure in Thailand.
Current implementation of TFA of Thailand. TFA Implementation of Thailand. Achievements of TF in Thailand. Trade Facilitation Main Indicators.
Implementation of TFA Indicators by OECD. Overall assessment of TF in Thailand and lessons learned.54 CHAPTER 3: THE CURRENT IMPLEMENTATION STATUS OF TRADE FACILITATION OF VIETNAM. Overview of Vietnam. Vietnam geographical location.
Transportation and logistics structure in Vietnam. Current implementation of TFA of Vietnam. TFA commitment of Vietnam. TFA Implementation of Vietnam.
Achievements of TF of Vietnam. Trade Facilitation Main Indicators. Implementation of TFA Indicators by OECD. Overall assessment of TF in Vietnam.81 CHAPTER 4: STRENGTHENING TRADE FACILITATION OF VIETNAM FROM THAILAND’S EXPERIENCES.
Vietnam’s view for improvement trade facilitation of vietnam. Opportunites of Vietnam. Challenges for Vietnam. Solutions for strengthening trade facilitation of Vietnam from lessons/experiences of Thailand.93 iv LIST OF FIGURES Y Figure 1.
Buy-Ship-Pay Model. Principle of trade facilitation. What is measured in Doing Business?. The Global Competitiveness Index 4.
The implementation commitment of WTO Members. GDP of Thailand (2009-2018). GDP/ capita of Thailand & East Asia & Pacific (2009-2017). Share of economic sectors in GDP from 2007-2017.
Balance of Trade of Thailand from 2009 – 2019. Thailand’s Exports from 2009 – 2019. Thailand’s Imports from 2009 – 2019. Thailand’s Foreign Direct Investment (2013 – 2018).
Notification Status of Thailand. Thailand National Logistics strategy. Conceptual Model of Thailand National Single Window. Thailand National Single Window operation.
AEO Organization of Thailand. Thailand AEO Members. Thailand Ease of Doing Business (2009-2018). Logistics Performance Index of Thailand.
Thailand’s Competitiveness index 2009 – 2018. Thailand’s Enabling Trade Index 2016. Trade Facilitation and Paperless Trade Implementation of Thailand in 2017. “Transparency” measures implementation.
“Formalities” facilitation measures implementation. “Institutional arrangement and cooperation” measures implementation. “Paperless trade” measures implementation. “Cross-border paperless trade” measures implementation.
GDP of Thailand, Vietnam, Malaysia (2013-2018). GDP/capita of Thailand, Vietnam, Malaysia (2013-2017). Share of economic sectors in GDP Thailand-Vietnam, 2013-2017. Vietnam’s Exports from 2009 – 2019.
Vietnam’s Imports from 2009 – 2018. Notification Status of Vietnam. Number of AEO in Vietnam (2014-2018). Ease of Doing Business in Vietnam- Thailand (2009-2018).
Logistics performance index of Thailand, Vietnam and Malaysia. Vietnam’s Enabling Trade Index 2016. Vietnam’s Performance of TFI(s) of 2017 by OECD.81 vi LIST OF TABLES YTable 1. Benefits for governments and business communities.
OECD’s Trade Facilitation Indicators. Development of Thailand’s international trade in January 2019. Score for Infrastructure. Notified items of Thailand.
Thailand NSW Participating Agencies. Major Documents Exchanged via THAI-NSW. Development of Vietnam’s international trade in Jan. Score for Infrastructure.
Maritime and Ports infrastructure in Vietnam-Thailand. LSCI of Vietnam, Thailand and Malaysia.78 vii ABBREVITION LIST ADB Asian Development Bank AEO Authorized Economic Operator APEC Asia-Pacific Economic Cooperation ASEAN Association of Southeast Asian Nations ATIGA ASEAN Trade in Goods Agreement B2B Business to Business partnerships DG TAXUD Directorate General of Customs and Taxation EC European Commission EDI Electric Data Interface EU European Union FoS Factor of Safety FTA Free Trade Agreement GATT General Agreement on Tariffs and Trade GDC General Department of Vietnam Customs GDP Gross Domestic Product G2B Government to Business partnerships G2G Government to Government partnerships ICC International Chamber of Commerce ITC International Trade Centre ITO International Trade Organization OECD Organisation for Economic Co-operation and Development NESDB National Economic and Social Development Board NLC National Logistic Committee NSW National Single Window NTFC National Trade Facilitation Committee PDSC Policy Support Dialogue Component RFID Radio Frequency Identification RTC Royal Thai Customs TEC-II Thailand-EU Cooperation Facility Phrase II TF Trade facilitation TFA Trade Facilitation Agreement THAI-NSW Thailand National Single Windows UN The United Nations UNCTAD United Nations Conference on Trade and Development UNECE United Nations Economic Commission for Europe UN Economic and Social Commission for Asia and the UNESCAP Pacific UNESCO United Nations Educational, Scientific and Cultural Organisation WB World Bank WCO World Customs Organization WTO World Trade Organization viii ix ABSTRACT Trade facilitation with many benefits for countries in enhancing the effectiveness of international trade, including but not limited to cost cutting, risk and uncertainity reduction, market expansion, has been increasingly received more and more interest from many countries in all over the world, especially in developing countries and least developed countries. Southeast Asia is a typical region of the developing countries for active implementation of trade facilitation, two of them are Vietnam and Thailand. This paper presents the current status of the results of the implementation of Trade Faciliation Agreement of Thailand and Vietnam, the results of these two countries in trade facilitation through trade facilitation indicators given by other international organizations such as World Customs Organization, World Bank… In addition, at the same time, the paper presents the difficulties and challenges that the two countries encounter during the implementation process of the trade facilitation, as well as the experiences that Thailand has drawn during the implementation of the trade facilitation, thereby giving lessons to Vietnam.
From these studies, the Thesis would like to provide solutions for Vietnam to further promote and improve the process of trade facilitation from time to time based on experiences of neighbouring coutry as Thailand. The research rationale Nowadays, the increase of trade in both value and volume sets out with the question for countries that is to create a favorable business environment to promote the movement of goods across national borders for the purpose of optimizing transaction costs and time. In a globalized world characterized by globalization and integrated supply chains, the need for global regulations and rules to facilitate trade are more and more pressing. As a consequese, many international organizations such as WTO, WCO, UNCTAD, OECD, APEC, focused on the trend of trade facilitation.
Derived from that, trade facilitation has become the target and tool to improve national competitiveness of many countries in the world such as Thailand and Vietnam. Trade Facilitation Agreement (TFA), the first multilateral trade agreement of WTO with its fundamental role for reforming of trade all over the world, is the source of international law for countries to build and enforce national trade facilitation. The TFA regulates the expedition of the movement, release, clearance of goods and sets out measures for effective cooperation between customs and other governmental authorities on trade facilitation and customs compliance issues. As of 22 February 2017, the TFA came into force following its ratification by two-thirds of the WTO membership.
Thailand and Vietnam are two countries of the south-east asia (ASEAN) who actively participated and ratified the TFA. With a high level of human development and the second largest economy in ASEAN and the 20th largest in the world by purchasing power parity, Thailand is classified as an emerging industrial economy in which production, agriculture and tourism are key sectors of the economy and it is an export-dependent market economy with exports. Thailand became the 20th WTO Member to formally accept the WTO’s Trade Facilitation Agreement (TFA) when it submitted its instrument of acceptance on 5 October 2015. About two months later, Vietnam also did ratify the TFA in 15 December 2015 with its orientation to quickly adapt and figure out how to keep up with other members.
2 Vietnam and Thailand are the two countries in Southeast Asia, located in the center of the world's most vibrant economy, having a favorable geographical position and natural conditions to develop all types of freight transport. They have similar characteristics in terms of tropical climate and traditional agriculture. Also, the both countries have the borders on the sea, with seaports and favorable natural conditions for tourism development and import export activities. Despite of above-mentioned similar characteristics, the economic starting point of the two countries is quite different.
In the 1970s, Thai implemented the "export-oriented" policy, of which ASEAN, America, Japan and EC were the main export markets. Industry and services and tourism have gradually played an important role in the economy and the role of agriculture has been declining. Thailand is now a new industrialized country (formerly a traditional agricultural country). Meanwhile, Vietnam is also a traditional agricultural country.
Thanks to economic and political reforms under ”Đổi Mới” in 1986, Vietnam have achieved rapid economic growth and transformed Vietnam from one of the world’s poorest to a lower middle-income country. According to the World Bank's Doing Business 2019 report, Thailand ranks 27th among 190 economies in the Ease of Doing Business (EODB) ranking (taking the third place after Singapore and Malaysia within ASEAN area), and ranks 32th in the logistic performance index (LPI) ranking in 2018. These results demonstrate that Thailand has achieved certain accomplishments in trade facilitation. As the two typical economies of the Mekong region, Vietnam and Thailand are on the momentum of economic development and effort to apply trade facilitation measures to strengthen economic cooperation with countries in the region and the world.
The achievements and experiences that Thailand gained from trade facilitation are absolutely some of the best ways for Vietnam to learn and apply for itself. Therefore, the topic "Trade facilitation of Thailand and lessons for Vietnam" is chosen to be the topic of this master thesis. Literature review As a category to promote international trade, trade facilitation quite received much attention and research from many organizations and researchers, including the 3 research on trade facilitation in general, on trade facilitation in Asia inluding the ASEAN countries. Regarding studies of trade facilitation in general, it would be impossibe not to mention on the work “Indicators for Trade Facilitation”.
This digital Handbook was developed as a follow-up to the Workshop on Trade Facilitation Performance and Monitoring, co-organized by the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP), the Organization for Economic Cooperation and Development (OECD) and the Asian Development Bank (ADB), in collaboration with World Bank (WB), International Trade Centre (ITC), World Customs Organization (WCO), United Nations Conference on Trade and Development (UNCTAD), with the support of the United Nations Network of Experts for Paperless Trade and Transport in Asia and the Pacific (UNNExT), the China International Electronic Commerce Center (CIECC) and the New Zealand Ministry of Foreign Affairs and Trade. For the “Trade facilitation: ITC publications”: The International Trade Centre (ITC) has many publications to help businesses and policymakers make the most of important agreements to break down trade barriers.