National Assembly deputies expect that Free Trade Agreements (FTAs) will give local enterprises both opportunities and challenges, forcing them to reform if they are to survive and grow.

Vietnam recently signed FTAs with the Republic of Korea and the Eurasia Economic Union (EAEU) while more pacts are expected to sign in the upcoming time.

According to Cao Sy Kiem, a NA deputy representing Thai Binh province and chairman of the Small- and Medium-Sized Enterprises (SMEs), the EAEU is a dynamic and potential area with markets suitable with Vietnamese goods.

The FTA with the EAEU will open up new market, new circumstances and new chances for Vietnam’s economy to grow further, he said.

Vietnam can find good chances for the export of agro-products. Besides that, Vietnam’s abundant workforce and production capacity can meet requirements of the market and partners in the region, he said.

However, the deputy is concerned that domestic businesses lag behind their peers in the target region and the world in terms of management capacity, the quality of workforce, productivity, and technology level. These limitations might push up the price of goods, affect product quality and therefore reduce competitiveness.

Kiem said that three problems should be addressed promptly to help improve domestic businesses’ performance. Firstly, the country must reform institutions such as taxation, exchange rate, interests and business freedom to meet the requirement of new markets and new partners.

Secondly, the application of technology should be boosted and thirdly, training a workforce and a pool of managers able to use new technologies.

Kiem advised enterprises, especially SMEs, to actively take measures to make them more competitive.

Do Van Ve, member of the NA’s Commission for Science, Technology and Environment, said local enterprises have made preparations over the past years for the international economic integration.

FTAs always brings both advantages and disadvantages. FTAs offer more markets for Vietnam’s exports thanks to tax incentives and allow local enterprises to learn a lot from developed countries from management to marketing.

However, Ve said, limitations in technology, productivity, and the quality of workforce will reduce the competitiveness of the local products.

Ve proposed that the Government should create favourable conditions through mechanisms and policies to help enterprise grow to become international players.-VNA