Workers process squid for export at the factory of the Huy Nam Co. Ltd in Chau Thanh district, Kien Giang province (Photo: VNA) Hanoi (VNA) – The participation in new-generationfree trade agreements (FTAs) has proved to be a driving force for exports butalso posed challenges for Vietnamese firms in meeting importers’ requirementsand competing with foreign rivals right in the domestic market.
Since Vietnam entered the World TradeOrganisation in 2007, it has negotiated 16 FTAs, 12 of which have been inkedand taken effect. While the EU-Vietnam FTA has its talks concluded and iswaiting for ratification, three other deals are under discussion, namely theRegional Comprehensive Economic Partnership, the FTA between Vietnam and theEuropean Free Trade Association, and the one between Vietnam and Israel.
Exports to the countries that have had FTAs withand export structures complementary to Vietnam have increased, including Japan,the Republic of Korea, Australia, New Zealand and the Eurasian Economic Union.The shipments of commodities to many markets like China, ASEAN, Japan and theRepublic of Korea have posted even double-digit growth rates.
On the other hand, trade deficit has also beengrowing due to the rising demand for imports from the partners. The domesticmarket will no longer be the strength of Vietnamese businesses when the countryfully implements commitments under FTAs.
Tran Thanh Hai, Deputy Director of the Ministryof Industry and Trade (MoIT)’s Export-Import Department, said thenew-generation FTAs include more complex and stricter provisions compared toold ones. Therefore, if frequent training programmes are not organised,businesses will be unable to update themselves about FTAs and make use ofpreferential treatment under these deals.
Market expansion is a long-term strategy thatwill help Vietnamese companies further take part in regional value chains,improve their export manufacturing capacity and competitiveness, and gain afoothold in the domestic and foreign markets, he noted.
The MoIT also recommended businesses have good knowledgeof export markets’ legal frameworks and technical barriers to stay active inexport activities.
Pham Quynh Mai, Deputy Director of the MoIT’sMultilateral Trade Policy Department, said although provisions in FTAs arebeneficial to Vietnam, if enterprises fail to capitalise on them, they will beunable to expand markets and increase export value.
She called on firms to swiftly change theirmindset and realise their role in the implementation of FTAs by activelyseeking relevant information. They should also continually improve theirtechnology and product quality to meet the standards set by import countries.
Some insiders suggested Vietnamese businessesconsider competition pressure as the momentum for reforms and coordination withother firms in the same industries.
They also asked authorised agencies and businessassociations to support exporters by giving instructions on FTA implementationand simplify administrative procedures.-VNA
VNA
