FTAs boost export growth

VCN - A series of the negotiated, signed and implemented FTAs have strongly boosted Vietnam’s goods exports to many markets, helping Vietnam connect and participate more deeply in the global value chain and production network. Even amid the Covid-19 pandemic, the support from the new generation FTAs supports exports in particular, and the Vietnamese economy in general to overcome difficulties.
Understand regulations to successfully export via e-commerce Understand regulations to successfully export via e-commerce
Breakthrough retail Breakthrough retail
Fruit and vegetable exports increase in most markets Fruit and vegetable exports increase in most markets
FTAs boost export growth

Achieve good results

Referring to opportunities from the FTAs, the export growth to markets of the new generation FTAs such as the EU-Vietnam FTA (EVFTA), the UK-Vietnam FTA (UKVFTA), and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a good example.

According to the Ministry of Industry and Trade, in the first months of the EVFTA implementation (from the beginning of August to the end of December 2020), Vietnam's export turnover to the EU reached US$15.62 billion, up 3.8% over the same period in 2019. In the first three months of 2021, Vietnam's exports to the EU reached US$9.9 billion, up 18% over the same period last year.

Vietnam has completed signing 15 FTAs at the bilateral and regional level (in which 14 FTAs are being implemented, one FTA was signed but has not come into effect), and two FTAs have been under negotiation. Among them, the most prominent are three new generation FTAs including: the CPTPP, the EVFTA and the UKVFTA; and one FTA which is the world's largest FTA in the framework of ASEAN, is the Regional Comprehensive Economic Partnership (RCEP). With 17 FTAs being implemented and negotiated, Vietnam has become the center of global trade flows.

From August 1, 2020 to April 4, 2021, agencies and organizations authorized to issue the Certificate of Origin (C/O) form EUR.1 issued more than 127,296 C/O sets form EUR.1 with turnover of more than US$4.78 billion to 27 EU countries.

Additionally, firms exporting goods to the EU deducted self-certification of product origin for nearly 3,585 shipments with a value of more than US$10.88 million, enjoying tax incentives under the EVFTA.

Talking to Customs News, Tran Thanh Hai, Deputy Director of Import and Export Department (Ministry of Industry and Trade), said items with the C/O form EUR.1 were mainly footwear, seafood, textiles, agricultural products, cereal products, and electronics. Import markets are mostly countries with ports and distribution and transshipment centers in the EU such as Belgium, Germany, Netherlands, and France.

Along with many positive signals from Vietnam's trade exchange with the EU countries, the import-export situation with the UK also showed positive signs. In the first three months of this year, exports to the UK increased by 22.1% over the same period last year.

"Thanks to the commitments to cut tax rates up to 99% according to the roadmap and its continuity, the UKVFTA can maintain the strong trade growth between Vietnam and the UK in the future," said the representative of the Ministry of Industry and Trade.

In addition to the EVFTA and the UKVFTA, the CPTPP, which has been in effect for more than two years (from January 14, 2019), has contributed significantly to the overall export performance. In just two years (2019 and 2020), the trade turnover between Vietnam and the 10 CPTPP countries reached US$77.4 billion and US$78.2 billion, up 3.9% and 5% compared to 2018. In particular, if only the import-export turnover to the two new markets without the FTA, which are Canada and Mexico, is included, in 2020, exports to Canada increased by 12.1%, to Mexico increased by 11.8% compared to 2019. These are two markets just having the FTA with Vietnam that have the highest rate of using C/O form among the members. This result strongly confirms the forecasts of positive growth when Vietnam joined the CPTPP.

Many challenges remain

In addition to the three new-generation FTAs mentioned above, regarding 11 traditional FTAs, the Ministry of Industry and Trade said the most obvious impact on trade was Vietnam's export turnover.

Specifically, Vietnam's total exports to the markets with the FTAs increased significantly, reaching US$123.11 billion in 2019. Meanwhile, in 2004, Vietnam had only two FTA partners, ASEAN and China, with a total export turnover of nearly US$7 billion. In terms of the average export growth rate to the FTA partner markets since the FTA, India achieved an average of 35.7% per year, South Korea reached 29.2% per year, Chile reached 28.9% per year, and China reached 20.9% per year.

Besides the impressive results in trade thanks to the FTAs, according to Nguyen Khanh Ngoc, Deputy Director of Europe - America Market Department (Ministry of Industry and Trade), the FTAs are also increasing competition pressure for the economy and businesses, requiring high standards of compliance to take advantage of opportunities and limit trade disputes.

“The new generation FTAs such as the CPTPP and the EVFTA set strict requirements on quality and standards. Undeniably, joining these FTAs, Vietnam will benefit from tariff reduction (up to 99% of the tariff lines). However, the trend of protection and the application of technical standards, labor, and environmental protection are increasingly high. Non-tariff barriers for imported goods in the markets participating in the FTAs with Vietnam will tend to increase. This is a big challenge for businesses, affecting the ability to take advantage of the tariffs,” said Ngoc.

The scope of Vietnam's FTA partners has been wide and comprehensive. Therefore, in the next 3-5 years, it will reach important milestones of many agreements and gradually liberalization of tariffs on most imported goods with major trading partners. To optimize the positive effects and minimize the negative effects of economic integration on the economy, the Ministry of Industry and Trade will focus on the implementation and effective use of opportunities from the FTAs, especially the CPTPP, the EVFTA, the UKVFTA, and the ASEAN agreements with partners; simultaneously, supporting businesses in early warning of partner countries’ trade remedies.

Realizing that the greatest difficulty of Vietnamese enterprises, especially small and medium sized businesses, is the lack of information, Tran Thanh Hai said enterprises had not fully understood the meaning of commitments in each industry and each item, especially those that they are interested in and producing. The utilization of such preferences is tied to the satisfaction of the goods origin. To meet the conditions related to goods origin, enterprises must change their supply chain, find sources of raw materials that meet the criteria for tariff reduction conditions, or change the production process to meet the criteria of code conversion.

To support businesses, the Ministry of Industry and Trade has cooperated with the World Bank (WB) to establish and operate an FTA portal where firms can find commitments on taxes, rules of origin, services, investment, as well as information about the market, import and export regulations/markets, and social responsibility. In terms of trade promotion, Hai affirmed that the Ministry of Industry and Trade would continuously improve their support forms to help businesses achieve effective promotion and expand their reach to access markets amid the Covid-19 pandemic.

By Thanh Nguyen/ Ha Thanh

Related News

Quang Tri Customs makes great effort to foster imports and exports across area

Quang Tri Customs makes great effort to foster imports and exports across area

VCN – Quang Tri Customs Department determines that accompanying businesses is a requirement and responsibility to support businesses in overcoming difficulties, contributing to the socio-economic development in the area.
Removing difficulties in tax exemption and refund policies for export processing enterprises

Removing difficulties in tax exemption and refund policies for export processing enterprises

VCN - The Customs agency has received many proposals from businesses about answering and guiding policies on tax exemption, import tax and VAT refund for export processing enterprises. The General Department of Customs has responded and provided instructions for each specific case.
Trade deficit from China in the first two months of the year hits over US$ 11 billion

Trade deficit from China in the first two months of the year hits over US$ 11 billion

VCN – Over the past two months of the year, Viet-Nam trade turnover reached over US$ 27 billion.
3 exported agricultural groups worth billion US$

3 exported agricultural groups worth billion US$

VCN – The export of agricultural products prospered in the first two months of the year. Notably, three agricultural commodity groups saw export turnover of US$ 1 billion or more.

Latest News

ASEAN, RoK agree on transposition of AKFTA product specific rules

ASEAN, RoK agree on transposition of AKFTA product specific rules

ASEAN member states and the Republic of Korea (RoK) have reached a consensus on the transposition of ASEAN-RoK Free Trade Agreement (AKFTA) Product Specific Rules from the Harmonised System Codes HS 2017 to HS 2022.
Opportunities for digital technology businesses to go global

Opportunities for digital technology businesses to go global

Finding solutions and directions to promote and develop Vietnamese digital technology enterprises is an important task, which will promote the stability and sustainability of the country's economy, heard a recent conference.
Vietnam, China eye stronger border trade

Vietnam, China eye stronger border trade

Border provinces of Vietnam and China should continue close coordination and enhance trade promotion between the two sides, stressed the recent talks between the management boards of the economic zone of the northern province of Ha Giang and the Malypo border economic cooperation zone of China’s Yunnan province.
Improve competitiveness and sustainable development of the seafood industry

Improve competitiveness and sustainable development of the seafood industry

VCN - In early 2024, seafood exports have prospered. This is the driving force that helps seafood businesses hope for a stronger recovery this year. Ms. Nguyen Thi Thu Sac, Chairwoman of the Vietnam Association of Seafood Exporters and Producers (VASEP) shared with Customs Magazine.

More News

Business environment reform needs further promotion: expert

Business environment reform needs further promotion: expert

Resolution 02 issued by the Government creates pressure for the ministries, sectors and localities to make changes for the business community as well as the socio-economic development.
Singapore is the largest foreign investor in VN in Q1

Singapore is the largest foreign investor in VN in Q1

The disbursed FDI rose by 7.1 per cent in the first quarter to reach $4.63 billion, a signal that the disbursement will continue the positive trend, the agency said.
Thai Binh boosts investment, trade cooperation with Germany

Thai Binh boosts investment, trade cooperation with Germany

A delegation from the northern province of Thai Binh, led by Deputy Secretary of the provincial Party Committee Nguyen Khac Than, visited several localities and business organisations in Germany from March 25 to 27, in a bid to enhance trade cooperation with and attract direct investment from the European nation.
Lifting obstacles to develop industrial parks

Lifting obstacles to develop industrial parks

VCN - Attracting investment and developing industrial zones (IZs) and economic zones (EZs) is one of the important contents to implement the policy of developing a multi-component, open, attract investment and resources from all economic sectors to develop the country. In addition to the results achieved, there still limitations that need to be removed to draw investments to develop industrial parks and economic zones, including financial problems for industrial parks.
Unlock capital flows and create favorable conditions for investors

Unlock capital flows and create favorable conditions for investors

VCN - Talking with the press, Dr. Ngo Cong Thanh (Photo), Provisional Executive Committee member of the Vietnam Industrial Park Finance Association (VIPFA), said that it is necessary to open up capital flows and create conditions for investors to access key factors. Facilitate production and business factors and innovate investment promotion activities to more effectively develop industrial parks.
More than 300 businesses, manufacturers to attend VGMF 2024

More than 300 businesses, manufacturers to attend VGMF 2024

More than 300 domestic and foreign businesses and manufacturers will attend the Vietnam Global Manufacturing Forum 2024 (VGMF2024) to explore investment and business cooperation opportunities.
Connecting with FDI firms helps boost wood exports: insiders

Connecting with FDI firms helps boost wood exports: insiders

Strengthening linkages and cooperation between foreign-invested and domestic enterprises will contribute to promoting the sustainable development of the Vietnamese wood industry, according to insiders.
Doosan Vina exports nearly 2,000 tonnes of modules to US

Doosan Vina exports nearly 2,000 tonnes of modules to US

The Doosan Enerbility Vietnam (Doosan Vina) specialising in heavy industries announced on March 26 that it has just exported a batch of nine modules weighing nearly 2,000 tonnes to the Golden Triangle Polymers company in Texas, the US.
Wood processing enterprises strive to increase the proportion of individually designed goods

Wood processing enterprises strive to increase the proportion of individually designed goods

VCN - Many wood and furniture processing enterprises are promoting investment in design activities, helping to increase the proportion of individually designed products (ODM) in exports, thereby affirming the industry's capacity Vietnamese wood in segments with higher added value.
Read More

Your care

Latest Most read
ASEAN, RoK agree on transposition of AKFTA product specific rules

ASEAN, RoK agree on transposition of AKFTA product specific rules

ASEAN member states and the Republic of Korea (RoK) have reached a consensus on the transposition of ASEAN-RoK Free Trade Agreement (AKFTA) Product Specific Rules from the Harmonised System Codes HS 2017 to HS 2022.
Opportunities for digital technology businesses to go global

Opportunities for digital technology businesses to go global

Finding solutions and directions to promote and develop Vietnamese digital technology enterprises is an important task, which will promote the stability and sustainability of the country's economy, heard a recent conference.
Vietnam, China eye stronger border trade

Vietnam, China eye stronger border trade

Border provinces of Vietnam and China should continue close coordination and enhance trade promotion between the two sides, stressed the recent talks between the management boards of the economic zone of the northern province of Ha Giang and the Malypo border economic cooperation zone of China’s Yunnan province.
Improve competitiveness and sustainable development of the seafood industry

Improve competitiveness and sustainable development of the seafood industry

In early 2024, seafood exports have prospered. This is the driving force that helps seafood businesses hope for a stronger recovery this year.
Business environment reform needs further promotion: expert

Business environment reform needs further promotion: expert

Resolution 02 issued by the Government creates pressure for the ministries, sectors and localities to make changes for the business community as well as the socio-economic development.
Mobile Version