A workshop assessing the impacts of free trade agreements (FTAs) on State budget revenues was organised in Hanoi on June 19 by the National Institute for Finance (NIF) and the US Agency for International Development (USAID).

According to NIF Deputy Director Truong Ba Tuan, the USAID and NIF have been working together in the Vietnam Governance for Inclusive Growth (GIG) project to establish a set of assessment tools for FTA impacts on key sectors as well as state budget collection.

The workshop would provide a platform for attendees to discuss methodologies for assessing the potential impacts of FTAs, such as the Trans-Pacific Partnership (TTP), on state budget, he noted.

Prof. Inkyo Cheong from Inha University in the Republic of Korea (RoK) said that the analysis of the TPP impacts on state budget is very complicated, requiring evaluation of all components of the TPP.

NIF Director Nguyen Duc Thanh believed that Vietnam joining FTAs might reduce direct tax collection from import-export activities, however economic growth fueled by the FTAs would benefit state budget in return.

As the private sector, including the SMEs, is the key driver of economic growth, there should be reform of administrative institutions and favourable business climate for them to develop, the director added.

Integration has double-edged effect on domestic production, requiring efforts of not only the government but also the entrepreneurs. Domestic firms need to actively look for information on the FTAs and its impacts on the market.

Vietnam is seeking to conclude the TPP with eleven other countries which is expected to fuel the country’s economy by reducing trade barriers, boosting exports and increasing employment opportunities for its citizens.-VNA