Vietnam's first free trade zone to be piloted in Danang city

The development of a free trade zone in the central city of Danang will provide a premise to legislate regulations on free trade zones across the whole country, said Minister of Planning and Investment Nguyen Chi Dung on Friday.

Presenting a draft resolution on the organization of urban administration and the piloting of specific mechanisms and policies for Danang’s development at the ongoing sitting of the National Assembly, Dung said Vietnam's current law does not have regulations on the establishment and operation of a free trade zone, while this is a popular economic model that exists in over 150 countries and territories.

Countries are constantly adjusting and piloting breakthrough and competitive mechanisms to attract investment and promote trade and service development, he stated.

However, Dung noted Vietnam has gradually approached this economic model through the development of similar schemes on a smaller scale, such as export processing zones, non-tariff zones, and duty-free shops, aiming to establish free trade zones to integrate further into the international economy.

Having researched successful free trade zone models in the EU, China, Singapore, and South Korea and selectively approached preferential policies from established economic models, the draft resolution proposes the Danang free trade zone include three functional areas covering production, port logistics, and trade-services.

"The development of the Danang free trade zone aims to create new development motivation, help accelerate the city's socio-economic development, and promote its role as a locomotive, driving the economic development of the north-central and central coastal region,” said the minister.

Presenting a verification report on the draft, Chairman of the National Assembly's Finance and Budget Committee Le Quang Manh said that the majority of committee members support the pilot establishment of the free trade zone because it has a sufficient legal basis.

This is also a breakthrough policy that reflects political determination, innovation, creativity, and the “daring to think, daring to do” spirit of Danang and Vietnam by applying an advanced global development model, he stated.

“If successful, it will create a premise to promote the socio-economic development of Danang and the region as a whole," Manh stressed.

The piloting is meant to lay the foundation for the formation of new policies in the process of operating a socialist-oriented market economy in the country, he said, adding there will be breakthrough fields to focus on, such as semiconductors and artificial intelligence.

However, Manh noted that this is also a big problem, related to not only the economy but also national defense, security, social order and safety, and associated with institutions and the legal system.

To effectively implement this policy, he recommended that the government clarify related issues such as the concept and organizational model, mandates, development policy and state management, implementation resources, and investment in infrastructure development.

Impacts on socio-economic growth, the budget, business development, and the responsibilities of relevant individuals and organizations should be included in the draft, he suggested.