Illustrative image (Photo: VNA)
Hanoi (VNA) – Vietnamese firms have not been able to fully tap incentives offered by free trade agreements (FTAs) that Vietnam has signed, experts said.
Vietnam has so far engaged in the signing and negotiations of 16 FTAs, 10 of which have taken effects. Through the deals, the country has entered into free trade partnerships with many economic powers and regions such as Japan, the Republic of Korea, the ASEAN and the Eurasian Economic Union (EAEU).
However, the growth of Vietnam’s exports to some partners, such as the RoK, China, and ASEAN, has not caught up with the surge in imports from those countries, resulting in big deficit for Vietnam in trade with those partners totalling 68.7 billion USD in 2017.
The ASEAN Trade in Goods Agreement (ATIGA) was the first FTA that Vietnam has joined, under which up to 98 percent of tax lines will be abolished, the biggest number among effective FTAs. However, the trade balance between Vietnam and ASEAN has been tilting in favour of other ASEAN members.
Statistics of the General Department of Vietnam Customs showed no sudden surge in Vietnam’s exports to ASEAN countries since the formation of the ASEAN Economic Community in 2015. Instead, the flow of imports from ASEAN members into Vietnam has increased strongly. As a result, Vietnam recorded a 6.5 billion USD deficit in trade with ASEAN countries in 2017, and 5.4 billion USD in the first 10 months of 2018. This is a matter of concern for Vietnam.
The trade deficit with the RoK is also increasing three years after the Vietnam-RoK FTA took effect, reaching more than 24 billion USD in the January-October period of this year.
Under the deal, the RoK commits to remove tariff for Vietnamese goods within three to five years since the date the FTA entered into force, while Vietnam will do the same over the course of 10 years.
Trade experts warn that it will be difficult for the country to reduce deficit and restore trade balance with partners in East Asia and Southeast Asia in the short term.-VNA
