Decisive reforms needed for Vietnam to get full EVFTA benefits: WB
|
The report argues that Vietnam could benefit even more from the next-generation trade deals such as EVFTA and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) if it stimulates a comprehensive agenda of economic and institutional reforms to facilitate compliance with non-tariff agreements.
The report estimates that such reforms would result in a “productivity kick”, increasing GDP by 6.8%, relative to the baseline scenario, by 2030. It highlights the need for Vietnam to increase capacity to handle certain key issues, including rules of origin, animal and plant sanitary standards, and investor-state dispute settlement.
“If Vietnam can act in a decisive manner to close legal and implementation capacity gaps, it can capitalize a trade deal whose direct benefits are estimated to be largest in the country’s history,”saidOusmane Dione, World Bank Country Director for Vietnam.
“With COVID-19 acting as a reset button and EVFTA as an accelerator, now is the perfect time to embrace deeper domestic reforms”, Ousmane noted.
The report cites the rules of origin requirement as one of the key challenges for Vietnam to overcome. Even if a product is produced in Vietnam, EU importers might not determine it as such due to the high dependence on imported materials.
The report finds that in key export manufacturing industries, a majority of inputs are sourced from foreign countries (for instance, 62% in electronics and 53% in the automotive sector). It calls for greater efforts to improve linkages between domestic suppliers and foreign enterprises as lead firms in major global value chains.
At the same time, rigorous European food safety standards make it imperative for Vietnam to improve the clarity and consistency of its sanitary measures. By one estimate, the cost of full compliance with existing non-tariff measures in Vietnam will be equivalent to a 16.6% tariff (compared to a regional average of 5.4%).
The introduction of EVFTA is expected to bring more investors into Vietnam both from Europe and the rest of the world. As the flow of foreign investment increase, so does the number of commercial grievances. The report calls for accelerated development of a Systemic Investment Response Mechanism to settle disputes between investors and the state.
The report also makes the case for prioritizing key sectors that make up the bulk of Vietnamese exports to the European market for COVID-19 economic recovery efforts, to maximize the benefits of the trade deal.
Related News
Vietnam and Japan promote cooperation
19:30 | 30/08/2024 Finance
Close cooperation between Vietnam and the EU in sustainable development
19:26 | 24/08/2024 Import-Export
Green energy goals still face many challenges
09:33 | 23/08/2024 Headlines
EVFTA strengthens Vietnam's attractiveness to European investors
07:21 | 18/08/2024 Import-Export
Latest News
Frozen durian - new growth potential for durian industry
16:20 | 20/09/2024 Import-Export
Vietnam’s frozen durian exports to China could reach 300 mln USD in 2024: Official
16:17 | 20/09/2024 Import-Export
US Commerce Department announces preliminary anti-dumping review results for Vietnamese catfish exports
16:15 | 20/09/2024 Import-Export
Textile and garment industry perseveres in overcoming difficulties and seizing opportunities from the market
08:59 | 20/09/2024 Import-Export
More News
Trade in goods in the second half of August increases over US$ 5 billion
08:58 | 20/09/2024 Import-Export
Bac Lieu plans to become renewable energy export hub
15:26 | 19/09/2024 Import-Export
Vietnamese premium rice enters Canadian market
15:24 | 19/09/2024 Import-Export
Logistics industry faces green transition imperatives
10:17 | 19/09/2024 Import-Export
How are imported seafood products transferred to domestic consumption quarantined?
10:16 | 19/09/2024 Import-Export
Steel stocks chill as weak demand sends a shiver through the industry
15:34 | 18/09/2024 Import-Export
Vietnam's seafood exports continue recovery
15:26 | 18/09/2024 Import-Export
Vietnam-China trade turnover hits nearly 130.8 billion USD
20:31 | 17/09/2024 Import-Export
Many good signals for businesses to accelerate seafood exports
10:14 | 17/09/2024 Import-Export
Your care
Frozen durian - new growth potential for durian industry
16:20 | 20/09/2024 Import-Export
Vietnam’s frozen durian exports to China could reach 300 mln USD in 2024: Official
16:17 | 20/09/2024 Import-Export
US Commerce Department announces preliminary anti-dumping review results for Vietnamese catfish exports
16:15 | 20/09/2024 Import-Export
Textile and garment industry perseveres in overcoming difficulties and seizing opportunities from the market
08:59 | 20/09/2024 Import-Export
Trade in goods in the second half of August increases over US$ 5 billion
08:58 | 20/09/2024 Import-Export