Thailand
Free trade deals offer boon for Vietnam’s exports
The Hanoitimes – The signed free trade agreements (FTAs) have promoted Vietnam’s export growth strongly by more than 4.43 times from US$48 billion in 2007 to $213 billion last year.
As member of the Association of Southeast Asian Nations (ASEAN), Vietnam participated in only two FTAs of the ASEAN-China Free Trade Area and the ASEAN- Republic of Korea (RoK) Free Trade Area before 2007. After that, the country signed several more deals, including those with Japan and Chile.
Notably, Vietnam signed many FTAs with large trade partners in 2015. During the year, the country concluded negotiations with the United States in the Trans-Pacific Partnership, with the European Union on the EU- Vietnam Free Trade Agreement (EVFTA) and with Russia on the Vietnam- Eurasia Economic Union Free Trade Agreement. The country also concluded bilateral FTA talks with the RoK in the year.
Vietnam is one of the countries with the most FTAs in the world. It has signed a total of 17 trade deals, of which 10 have become effective, 2 have been signed but are yet to take effect, while negotiations have concluded on 2 deals and are on the way for three others.
According to Ngo Chung Khanh, deputy head of the Multilateral Trade Policy Department under the Ministry of Industry and Trade, 60-70 percent of the Vietnamese firms had business relations with those in the East Asia before 2007, however, they suffered heavy loss, resulting in trade deficit of nearly $70 billion in 2007.
The situation has been improved as free trade pacts help set up sound trade ties with other regions and they serve as a boon for local products to break in into foreign markets. While Vietnam exported only $5.4 billion worth of products in 1995, it gained $48 billion from shipments in 2007 and the figure hit $213 billion in 2017.
Aside from export turnover, the FTAs also brought other benefits, with the most remarkable one being ensuring fairer access to resources.
Many FTAs, especially new-generation ones, pay attention to fairness, which forces Vietnam to act to improve domestic business environment towards fair treatment between State-owned and private enterprises.
The trade deals also assist with efforts to improve infrastructure, push forward administrative reforms and remove market obstacles.
Vietnam is waiting for the EVFTA to take effect this year to further boost the shipment to the European market.
Nguyen Dinh Cung, director of the Central Institute for Economic Management (CIEM), highlighted the importance of the EVFTA agreement in Vietnam’s integration process.
The trade agreement brings great benefits to the country, as it is estimated it would generate an additional 2.5 percent to Vietnam’s GDP by 2020, and 4.6 percent by 2025, he said.
The agreement is expected to help increase Vietnam’s exports to the European market, while creating new jobs for the Vietnamese labor force, especially for those working in rural and agricultural areas.
It would also make it easier for Vietnam to import advanced technologies, which would help improve the country’s economic rankings.
Meanwhile, as for the Comprehensive and Progressive Trans-Pacific Partnership Agreement (CPTPP), which was signed in March this year, Minister of Industry and Trade (MoIT) Tran Tuan Anh expected that it will be vital deal to expanding free trade and ensuring sustainable development in Vietnam.
The minister said such sectors as garment-textiles, footwear, food processing, beverage, confectionery, tobacco and wine and beer will benefit most from the deal. He cited a study jointly conducted by the World Bank (WB) and the research institute under the Ministry of Planning and Investment as saying that Vietnam’s GDP would be 1.1 percent higher than otherwise expected in 2030 thanks to the CPTPP.
Vietnam is one of the countries with the most FTAs in the world. It has signed a total of 17 trade deals, of which 10 have become effective, 2 have been signed but are yet to take effect, while negotiations have concluded on 2 deals and are on the way for three others.
According to Ngo Chung Khanh, deputy head of the Multilateral Trade Policy Department under the Ministry of Industry and Trade, 60-70 percent of the Vietnamese firms had business relations with those in the East Asia before 2007, however, they suffered heavy loss, resulting in trade deficit of nearly $70 billion in 2007.
The situation has been improved as free trade pacts help set up sound trade ties with other regions and they serve as a boon for local products to break in into foreign markets. While Vietnam exported only $5.4 billion worth of products in 1995, it gained $48 billion from shipments in 2007 and the figure hit $213 billion in 2017.
Aside from export turnover, the FTAs also brought other benefits, with the most remarkable one being ensuring fairer access to resources.
Many FTAs, especially new-generation ones, pay attention to fairness, which forces Vietnam to act to improve domestic business environment towards fair treatment between State-owned and private enterprises.
The trade deals also assist with efforts to improve infrastructure, push forward administrative reforms and remove market obstacles.
Vietnam is waiting for the EVFTA to take effect this year to further boost the shipment to the European market.
Nguyen Dinh Cung, director of the Central Institute for Economic Management (CIEM), highlighted the importance of the EVFTA agreement in Vietnam’s integration process.
The trade agreement brings great benefits to the country, as it is estimated it would generate an additional 2.5 percent to Vietnam’s GDP by 2020, and 4.6 percent by 2025, he said.
The agreement is expected to help increase Vietnam’s exports to the European market, while creating new jobs for the Vietnamese labor force, especially for those working in rural and agricultural areas.
It would also make it easier for Vietnam to import advanced technologies, which would help improve the country’s economic rankings.
Meanwhile, as for the Comprehensive and Progressive Trans-Pacific Partnership Agreement (CPTPP), which was signed in March this year, Minister of Industry and Trade (MoIT) Tran Tuan Anh expected that it will be vital deal to expanding free trade and ensuring sustainable development in Vietnam.
The minister said such sectors as garment-textiles, footwear, food processing, beverage, confectionery, tobacco and wine and beer will benefit most from the deal. He cited a study jointly conducted by the World Bank (WB) and the research institute under the Ministry of Planning and Investment as saying that Vietnam’s GDP would be 1.1 percent higher than otherwise expected in 2030 thanks to the CPTPP.
Source: http://www.hanoitimes.vn/economy/2018/04/81E0C57D/free-trade-deals-offer-boon-for-vietnam-s-exports/