Non-tariff barriers (NTBs) remain one of the most significant obstacles to ASEAN’s economic integration. Bloc members, including Vietnam, are facing increasing difficulties as exported goods encounter stringent NTB regulations, especially in sectors such as agriculture, food, and electronics. These regulations not only raise costs and extend clearance times but also limit market access, ultimately affecting the competitiveness and growth potential of businesses.

Major hurdle

According to the World Bank (WB), there are currently nine major categories of non-tariff measures (NTMs) being implemented around the world. Among these, sanitary and phytosanitary (SPS) measures, which aim to ensure food safety and protect animal and plant health, account for 37.5 per cent, while technical barriers to trade also represent 37.5 per cent. Pre-shipment inspections and other related procedures make up 1.3 per cent. Such measures are intended to safeguard public health, the environment, and domestic production in each country.

However, certain limitations and inconsistencies in their implementation have posed significant challenges for businesses, particularly in export activities and investment efforts. At a conference entitled “Easing Non-Tariff Barriers to Unlock ASEAN’s Potential” held in late June, Ambassador of New Zealand to Vietnam, H.E. Caroline Beresford, noted that many NTMs, such as biosecurity regulations aimed at protecting human, animal, and plant health, are necessary and can enhance trade.

But when these measures are implemented in ways that unnecessarily restrict trade, they become non-tariff barriers. “These NTBs disrupt the free flow of goods and services, delay exporters, and undermine the shared goal of deeper regional integration,” the Ambassador said.

NTBs are also creating additional burdens for Vietnamese businesses, particularly small and medium-sized enterprises (SMEs), in their efforts to export and expand investment into regional markets. The requirement to navigate complex and inconsistent inspection and certification procedures across ASEAN not only increases costs and processing times but also causes many businesses to miss out on market access opportunities, reduces their competitiveness, and limits their ability to fully benefit from the preferential terms offered by free trade agreements.

In terms of investment, Vietnamese enterprises continue to face numerous obstacles, particularly regarding procedures for obtaining licenses to invest abroad, which are often considered complex and time-consuming. According to Ms. Bui Kim Ngan, Tax Services Director at Grant Thornton, businesses must go through a multi-layered evaluation and approval process involving various ministries and government agencies in Vietnam, creating significant administrative hurdles.

For many investment projects aiming to capitalize on global opportunities, the cumbersome and prolonged licensing procedures may cause Vietnamese businesses to miss out on valuable chances.

“In fact, many companies have had to abandon their initial overseas investment plans simply because they could not complete the licensing process in time,” Ms. Ngan noted.

Moreover, many Vietnamese enterprises continue to encounter challenges in managing outbound investment capital. In particular, they are required to apply for the opening of a foreign investment capital account through a bank authorized by the State Bank of Vietnam. Investment capital can only be transferred abroad after the disbursement plan has been registered and approved.

In addition to investment-related difficulties, businesses also face numerous NTBs in import and export activities. These issues are particularly burdensome for companies in the agriculture and seafood sectors, which are required to comply with overlapping technical standards, strict food safety inspections, fragmented customs infrastructure, and inconsistent coordination between ministries and government agencies.

As a result, operational costs increase significantly, from quality control and hiring specialized personnel for import-export procedures to warehousing expenses.

Beyond hampering current business activities, these non-tariff barriers are also holding back the ability of Vietnamese companies to tap into new and promising markets. A notable example is the Halal market, which Vietnam is targeting to expand both trade and tourism. However, Vietnamese businesses continue to face considerable challenges in unlocking the potential this market holds.

Ms. Le Hang, Deputy Secretary General of the Vietnam Association of Seafood Exporters and Producers (VASEP), explained that Halal certification is a mandatory requirement for products exported to Muslim-majority countries such as Indonesia, Malaysia, and Brunei. This certification process can take three to six months, and involve high costs and complex procedures that vary by country and supply chain. “This presents a major hurdle for Vietnamese companies seeking to penetrate into the Halal market,” Ms. Hang added.

Adjusting to thrive

According to the United Nations Conference on Trade and Development (UNCTAD), trade costs arising from NTBs account for 2-4 per cent of the total value of goods. Meanwhile, a study by the Global Trade Analysis Project (GTAP) at Purdue University in the US estimates that even a 10 per cent reduction in NTB-related costs could lead to a 3-4 per cent increase in ASEAN trade annually.

Therefore, ASEAN member states need to adopt appropriate measures to reduce NTBs in the near future in order to support businesses, thereby contributing to the growth of trade and investment activities.

“Governments across the region, including Vietnam and New Zealand, have made meaningful progress in reducing non-tariff barriers, but there is more to be done and this requires collective effort,” Ambassador Beresford noted. She emphasized that the voice of the business community plays a vital role in reducing NTBs. Sharing practical experiences helps identify policy gaps that need to be addressed.

At the same time, strengthening communication and outreach activities is essential for raising awareness and delivering constructive messaging about NTB reform in the future. “As government officials and policymakers, we must listen carefully and translate what we hear into effective, transparent, and appropriate regulations that support enterprise and remain in line with our international commitments,” the Ambassador added.

In addition, Vietnam’s business community must proactively implement concrete solutions to overcome NTBs. Particularly in the seafood export sector, Ms. Hang highlighted the importance of companies staying proactive and adaptable in response to increasingly stringent international market requirements. Enterprises must closely monitor developments in their target markets, especially regarding supply and demand trends, as well as evolving rules and regulations.

Vietnamese businesses should also strengthen their capacity to access and process updated information on both domestic and international standards and technical regulations through training programs, workshops, and seminars.

From a policy perspective, Ms. Ngan proposed that the Vietnamese Government streamline licensing procedures to create more favorable conditions for domestic enterprises in both trade and outbound investment activities. Simplifying these processes would not only save time and costs for businesses but also enhance their competitiveness in the global market.

Moreover, she emphasized that fostering open and regular dialogue between ASEAN member states is essential for addressing and minimizing NTBs. Such regional cooperation plays a crucial role in harmonizing standards, improving transparency, and removing unnecessary obstacles that hinder cross-border trade.

“By doing so, businesses across ASEAN would benefit from a more predictable and accessible regulatory environment, ultimately making it easier for them to expand into new markets and strengthen intra-regional trade links,” she said.

Source: VnEconomy