FTAs - momentum for Vietnam’s economy in 2022

Producing electronic components at 4P Co., Ltd in Hung Yen province (Photo: VNA)

Bilateral and multilateral free trade agreements (FTAs), including the Regional Comprehensive Economic Partnership (RCEP) which took effect from January 1, are expected to become a new momentum promoting Vietnam's economic growth in 2022.

Experts, however, said that enterprises need to proactively improve their competitiveness and self-innovate in order to meet the process of international economic integration and fully tap opportunities in the new context, thus enabling them to go faster and further in the future.

Looking back at 2021, Vietnamese brands continued to gain a foothold on the world commodity map, enjoying a trade surplus of 4 billion USD, despite difficulties caused by the COVID-19 pandemic.

One of the catalysts for this spectacular achievement was FTAs, especially new generation ones.

Accordingly, the FTAs that Vietnam has signed with its partners have been opening the door for the Southeast Asian nation to integrate further into the global value chain and production network.

The new-generation FTAs, such as the CPTPP, the EU-Vietnam FTA (EVFTA) and the UK-Vietnam FTA (UKVFTA), are being implemented comprehensively and effectively.

The Ministry of Industry and Trade (MoIT) said the EVFTA, which came into effect on August 1, 2020, has created a huge boost for Vietnam’s exports, helping the country’s export turnover to the EU hit about 40.07 billion USD, up 14 percent.

As many as 201,846 EUR.1 certificates of origin (C/O) were issued in 2021 for Vietnamese exports worth 7.8 billion USD to 27 EU member countries, the ministry added.

Notably, enterprises exporting goods to the EU also perform self-certification of origin for 5,217 shipments valued at more than 16.5 million USD enjoying preferential tariffs under the EVFTA. This shows that many Vietnamese businesses have paid attention to taking advantage of opportunities from the EU's tariff reduction under the deal.

Besides, the UKVFTA, which was implemented from the beginning of 2021, also helped the two-way trade between Vietnam and the UK reach nearly 6.6 billion USD. The import and export values both increased by double digits to 24.1 percent and 15.4 percent, respectively.

Regarding the CPTPP, Vietnam’s exports to Canada and Mexico where Vietnam has just had FTAs with, respectively expanded by 19.5 percent and 46.1 percent.

However, in order to increase competitiveness in the markets that Vietnam signed FTAs with, a representative of the MoIT’s Import-Export Department said that businesses need to pay special heed to quality, food safety and hygiene, technical barriers, rules of origin and brand development.

In 2022, the MoIT will focus on effectively implementing the FTAs that Vietnam has joined, especially a plan for implementing new-generation ones, towards a more balanced import-export, ensuring stable markets for Vietnam’s exports./.