Illustrative image (Source: VNA) Hanoi (VNA) – Vietnam’s involvement in12 bilateral and multilateral free trade agreements (FTAs) with 56 economiesaround the world is expected to be a golden key for the country to expand itsglobal economic integration, according to Cong Thuong (Industry & Trade)newspaper.
In July 1995, Vietnam signed internationaltreaties to join the Association of Southeast Asian Nations (ASEAN) andofficially partook in the ASEAN Free Trade Area (AFTA) in January 1996.
Since then, the country has engaged in freetrade deals such as ASEAN-China Free Trade Agreement – signed in 2002 and ASEAN-KoreaFree Trade Agreement – inked in 2006; and joined the ASEAN-Japan Free TradeArea.
In October 2011, Vietnam struck a free tradeagreement with Chile, and from mid-2012 onward, the Southeast Asian country haspushed ahead with negotiations on other free trade packs.
In late 2014,Vietnam concluded negotiations on bilateral and multilateral free tradeagreements with the European Union, the Republic of Korea, and the CustomsUnion of Russia, Belarus and Kazakhstan.
Vietnam has been negotiating more free tradeagreements, including the Regional Comprehensive Economic Partnership (RCEP),and deals between ASEAN and Hong Kong, and between Vietnam and Israel.
The RCEP is considered a free trade agreementwhich will stipulate trade activities of the entire ASEAN.
The Vietnam-EU Free Trade Agreement will enableVietnam to boost relations with Central and Eastern European countries, whileaccessing advanced technologies and learning how to improve management skillsand vocational training.
Tax reductions under the pact will increaseVietnam’s exports to the EU to about 30-40 percent.
Meanwhile, the free trade agreement betweenVietnam and the Eurasian Economic Union (EAEU), which came into force inOctober 2016, has opened up opportunities for businesses of the two sides toboost trade and services.
Vietnamese firms will have access to a marketwith total gross domestic product of nearly 2.2 billion USD and a population of183 million. Vice versa, countries from the EAEU will be able to access a 90million population in Vietnam.
The Vietnam-RoK Free Trade Agreement, which has beenin effect for one year, has boosted Vietnam’s economy and is expected to help increasethe bilateral trade to 70 billion USD by 2020.
Besides opportunities, there are numerouschallenges, including stricter technical requirements from foreign nations onVietnam’s export products, which cause trade barriers.
Additionally, the competitive edge of Vietnamesefirms is still poorer than trade partners in the region such as Singapore,Malaysia and Indonesia.
It is also difficult for Vietnam to controlimported goods due to tariff removals. Domestic consumers can buy products anduse services from other countries, making it tough for Vietnam to protectproduction at home.
Vietnam plans to devise measures such asrefining trade and investment policies, attracting high-quality foreigninvestment projects, and adjusting the structure of domestic and import-exportmarket to optimise opportunities from FTAs.
By 2020, whenall 16 FTAs that Vietnam is involved in come into effect, Vietnam will be amonga massive economic network of 59 partners, including five permanent membercountries of the UN Security Council, 15 out of the 20 nations from the G20 andother emerging economies.-VNA
