The Ho Chi Minh City Institute for Development Studies has issued a document related to the opinions of the HCMC People’s Council delegates, proposing that the central government allow the establishment of an economic zone to form a free trade area associated with the Can Gio international transshipment port.
Accordingly, the free trade area model is still quite new in Vietnam. Based on international experience, a free trade area is a special economic zone established by two or more countries. When formed, it requires policies such as tax exemptions, corporate income tax incentives, market access, free movement of goods between member countries, and other policies. Currently, only the Central City of Da Nang has proposed a pilot establishment of the first free trade area, and the National Assembly has issued a resolution allowing its implementation.
According to the Ho Chi Minh City Institute for Development Studies, a free trade area is an important tool to promote trade, investment, and international economic integration. The pilot implementation of a free trade area brings many socio-economic benefits but appropriate solutions are needed to address the accompanying challenges.
Additionally, according to the planning, Ho Chi Minh City is not designated for a free trade area, so there is no legal basis to establish a free trade area in the city.
The Politburo’s Resolution 24 of 2022 on the development of socio-economic and ensuring national defense and security in the Southeast region until 2030, with a vision to 2045, has oriented the formation of a free trade zone associated with the Cai Mep Ha seaport in Ba Ria – Vung Tau Province. Therefore, it is necessary to consider the factors of location and competition in the formation of the marine economic zone in Can Gio.
The Ho Chi Minh City Institute for Development Studies also highlighted several challenges when participating in the free trade area suggesting that to enjoy the benefits of the special area, thorough research and appropriate strategies are needed to maximize opportunities and minimize risks from this model.
The Institute believes that with strong political determination to establish the Can GIo international transshipment port, the formation of the area can also be considered if it is included in the Ho Chi Minh City planning, Southeast region planning, and national master planning in the southern metropolis.
Additionally, the Institute recommends further research and reference to domestic and international documents on the establishment of free trade zones to accurately and comprehensively identify the challenges that Can GIo in particular and Ho Chi Minh City in general will face when forming the zone before preparing the dossier to submit to the competent authorities.
