Customs clearance of import and export goods at seaports. (Photo: Vietnamplus) Vietnam's import-export turnover in recent years has consistently been a bright spot for the economy. Notably, when the COVID-19 pandemic was at its peak, unpredictable in most countries and economies with which Vietnam has trade relations, exports in 2021 still grew by “2 figures,” which was indeed an unexpected result.
According to experts, participation in free trade agreements (FTA) is important leverage to help enterprises access different market segments and reduce risk while improving export value. Vietnam’s recent agreements include the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), European Union- Vietnam Free Trade Agreement (EVFTA) and the freshly signed Regional Comprehensive Economic Partnership (RCEP).
Breakthrough from FTAs
In 2021, Vietnam's total import-export turnover reached US 668.55 billion USD. Exports reached more than 336.3 billion USD, an increase of 19% compared to 2020. Imports reached 332.2 billion USD, an increase of 26.5%, helping the country enjoy a trade surplus of more than 4 billion USD.
The free trade agreements (FTAs) that Vietnam has signed have given rise to the above results and have made a significant contribution to taking advantage of the new markets.
According to Export-Import Department under the Ministry of Industry and Trade, the implementation of FTAs in the last two years has achieved positive results, especially new generation FTAs such as the Vietnam-EU Agreement (EVFTA), the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) and the Vietnam-British Free Trade Agreement (UKVFTA).
For the EU market, in 2020, despite the difficulties caused by the COVID-19 pandemic, in the first five months of implementing EVFTA (from August to December 2020), Vietnam's trade had a positive growth, reaching 3.8%. The last seven months saw a growth of 17.8%.
With UKVFTA, as early as January 1, 2021, Vietnamese exports to the UK have enjoyed preferential treatment in accordance with the commitment of this agreement. The effectiveness of the deal is also clearly visible.
In 2021, Vietnam's exports to the UK experienced a high growth of 15.4%. As for the CPTPP, the first two markets with FTA relations were Mexico and Canada, which also posted growth of more than two figures.
Meanwhile, the Regional Comprehensive Economic Partnership Agreement (RCEP) between 10 ASEAN countries (including Vietnam) and Australia, the Republic of Korea, New Zealand, Japan and China, which came into effective from the beginning of 2022, is rated as a new "leverage" in Vietnam's commodity exports to some important markets such as China and ASEAN region.
According to Associate Professor Dr. Pham Tat Thang, senior expert of the Institute of Strategic Studies, Trade Policy under the Ministry of Industry and Trade, Vietnam has exploited the Chinese market mainly through unofficial quota.
However, with RCEP - this is a new opportunity to increase exports, but enterprises have to change their business operation and consider it as a “high-level” market to exploit all opportunities. As for the ASEAN market, for many years, Vietnam still mainly imports from this market.
Therefore, with the signing of the RCEP agreement, together with high-level Free Trade Agreements such as CPTPP, EVFTA will help Vietnamese enterprises to diversify the market and reduce the trade deficit with some partners.
It is estimated that the total RCEP countries account for about 30% of global GDP and 30% of the world population. With great potential, experts said that the RCEP agreement will help increase quality inputs for consumption and production as well as exports. The agreement will also help Vietnam better participate in the value chain, improving economic recovery from COVID-19 and reducing risk to the market./.
