International integration is an important highlight of Vietnam in 2020. Within one year, Vietnam joined 3 FTAs, including the EU-Vietnam FTAs, the Regional Comprehensive Economic Partnership (RCEP) Agreement and the Vietnam-UK FTA; bringing the total number of signed and implemented FTAs to 15.
Figures from the Ministry of Industry and Trade showed that with CPTPP, export turnover to member markets previously without FTA with Vietnam has grown rapidly. Specifically, exports to Canada reached an estimated 4.4 billion USD, up nearly 12% against 2019, while exports to Mexico were estimated at 3.2 billion USD, up 12%.
Five months after the EVFTA came into effect, Vietnam’s export turnover to the EU totaled about 15.4 billion USD, a year-on-year rise of 1.6%. This is a very encouraging result in the context of the GDP of the EU still contracting and the bloc facing difficulties amid the complicated COVID-19 pandemic.
The Government leader and the Minister of Industry and Trade at the signing ceremony of RCEP
In 2020, despite facing many difficulties due to the COVID-19 pandemic, Vietnam has proactively coordinated with ASEAN countries and partners; actively looked for solutions to deal with problems to complete the negotiation of RCEP Agreement after 8 years, and successfully held the signing ceremony of RCEP in November.
In December 2020, the FTA between Vietnam and the UK was officially signed and took effect from December 31, 2020. The agreement and other FTAs are expected to contribute to facilitating Vietnam’s trade activities with major economies in the world.
FTAs create favorable future for Vietnam
It can be seen that FTAs with preferential tariff opportunities for Vietnam’s exports and imports with FTA partners offer opportunities on price competition for these goods. In addition, unreasonable non-tariff barriers being cut, and increased unity and more transparency in procedures would facilitate trade flows.
Assoc. Dr. Pham Tat Thang, senior researcher from the Ministry of Industry and Trade’s Trade and Industry Policy Strategy Research, said that together with well exploiting the traditional markets, Vietnam has expanded its research and development of additional new markets while taking advantage of tariff preferences from FTAs. This helped domestic enterprises increase competitive capacity and improve the value of export goods, especially agricultural products and seafood products which have been Vietnam’s advantages.
“Along with the continuous reform of administrative procedures, creation of open corridor for businesses has been driving the development of export enterprises as well as attracting and expanding investment,” he commented.
The signing ceremony of the minutes on the conclusion of negotiations over the UKVFTA
Economist Vo Tri Thanh said that FTAs are closely related to the process of restructuring, production and business of the country in general and producers in particular over the past 5-7 years.
“The impact of FTAs, apart from a purely market view, also brings great effects on partners, core technologies and strategic products. Because, apart from exports, FTAs will inevitably involve a shift in investment and trade, especially high-quality human resources,” Thanh added.
Around the story of utilizing FTAs, especially new-generation FTAs such as CPTPP, EVFTA, PhD. Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry, expressed that, in fact, some businesses just care about tax rates and commodity codes, while many other non-tariff issues need attention. Therefore, in addition to popularizing FTA knowledge to businesses, improving governance, diversifying markets, and building a system of risk prevention; the Government needs to “join hands” with businesses in institutional reform and quickly legalize commitments to facilitate them./.