HCMC – Advantages brought about by free trade agreements (FTAs) such as EVFTA and CPTPP would gradually disappear if Vietnamese exporters do not act quickly to make the most of these advantages right now.
The recommendation was made at a seminar last Friday featuring discussions on how EVFTA and other FTAs could be leveraged and on finding solutions to making use of the FTAs. The event was co-organized by the Ministry of Industry and Trade and the HCMC International Integration Support Center.
Speaking at the event, Luong Hoang Thai, head of the ministry’s Multilateral Trade Policy Department, said that after many new-generation FTAs between Vietnam and other countries, regions were signed from 2019, the local economy has witnessed positive changes despite the on-going geopolitical uncertainties and the global economy negatively impacted by Covid.
Vietnam’s exports to members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in 2021 expanded 18.1% against the 2020 figure. Also, the EU-Vietnam FTA coming into force enabled the Vietnam-EU bilateral trade in 2021 to increase 14.5% over the year earlier.
Thai attributed these significant trade results to State management agencies and local exporters’ great efforts in effectively leveraging the FTAs.
Around 85.8% of local businesses directly impacted by FTAs said that the pacts have left a positive impact on their operations. Besides, their awareness about FTAs were improved as 26.1% of the businesses said they gained considerable knowledge about FTAs, compared to the 2016 figure of 12.6% only.
However, the awareness about FTAs remains limited and varies by business sectors. The level of awareness about FTAs steadily decreased from FDI firms to Vietnamese ones, mostly small and medium enterprises with limited resources and operating capacity.
Many experts at the event shared the same point of view that advantages of FTAs, particularly new generation ones would pave the way for Vietnamese products to enter the markets that had signed FTAs with Vietnam. But the number of businesses knowing how to take advantage of FTAs is reportedly modest while the opportunities of the pacts are expected not to stay long.
Therefore, Ngo Chung Khanh, deputy head of the Multilateral Trade Policy Department, advised local exporters to quickly grasp opportunities of FTAs as soon as possible. Or else, the opportunities and tariff incentives would diminish and even disappear.
Khanh noted that Malaysia recently ratified CPTPP. This means tariff-related advantages for Vietnam in comparison with Malaysia in the markets of CPTPP members would no longer exist.