Implementation of FTAs still lacks breakthroughs from many localities

	Understanding commitments to make effective use of tariff preferences to implement FTAs
	Exports add tens of billions of USD to coffers from FTAs

Businesses need to exploit opportunities from FTAs to expand consumption markets to other member countries.

Increase Exports

This issue was discussed at the seminar "Supporting localities, increasing the effectiveness of FTA implementation" held on October 31.

The process of implementing Free Trade Agreements (FTA) in recent times has had positive impacts on the socio-economic development of localities, especially promoting growth in trade value.

According to statistics, the total two-way trade turnover of 5 centrally run cities with FTA countries in the 2021-2022 period is estimated at more than USD 449 billion; Of which, exports are estimated at USD 189.5 billion; Imports are estimated at USD 259.4 billion.

Particularly with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), in the two years 2021-2022, the total trade turnover between the 5 cities and CPTPP countries reached USD 79.751 billion. With the European Union and Vietnam Free Trade Agreement (EVFTA), businesses in the 5 cities have exported goods worth USD 14.179 billion to EU countries.

The Ministry of Industry and Trade's recent report on the situation of the CPTPP, EVFTA and UKVFTA Agreements also shows a more general view: in 2022, there will be 52/63 provinces and cities having export activities with CPTPP countries, an increase of 11 locations compared to 2021. For EVFTA countries, there are 49/63 localities have export activities in this area, an increase of 11 localities compared to 2021. Similarly, in 2022 there are 44/63 provinces and cities have export activities with the UK under the UKVFTA Agreement, an increase of 13 localities compared to 2021.

Mr. Ngo Chung Khanh, Deputy Director of the Multilateral Trade Policy Department (Ministry of Industry and Trade), said that with the support of the local authorities of these 5 provinces and centrally run cities, they have taken advantage of FTAs very well. Domestic enterprises and foreign-invested enterprises connect effectively, participating more and more in global supply chains.

Mr. Nguyen Anh Duong, Head of the General Economics Department, at the Central Institute for Economic Management (CIEM), said that the difference in taking advantage of FTAs in provinces and cities is due to differences between localities. Besides, with the issue of propaganda, according to Mr. Nguyen Anh Duong, current information still focuses a lot on propagating the main contents of the agreement, the contents written in the agreement and the two sides have agreed on it together in terms of understanding. However, there are still new issues affecting implementation, for example, new regulations of the EU or partner markets that are not written in the agreement, and how will implementation be organized... These are also issues. The topic has many different interpretations.

There will be an FTA Index

From the realities and inadequacies in implementing FTAs in localities today, and at the same time, in the context that the implementation of FTAs will move to a new phase with roadmaps for tariff reduction and opening strong market. This requires stronger solutions to improve implementation efficiency and policies to encourage businesses to take advantage of opportunities from FTAs.

Mr. Ngo Chung Khanh also acknowledged the reality that the depth of propaganda activities does not meet the needs of businesses, and the number of officials directly implementing FTA implementation tasks in provinces and cities is still very limited. In particular, the proportion of new-generation FTA markets in the total import-export turnover of provinces and cities is still modest.

“There are some provinces that I summarize less than 10%, some provinces have more than about 20%, but on average (including the national level for the EU) it is about 20%; As for Canada and Mexico, the average is about 1.4% - 1.5%; The UK is 1.3%. That means the potential to exploit the markets is still very large," Mr. Ngo Chung Khanh shared.

To effectively exploit the FTA, Mr. Ngo Chung Khanh said, the Ministry of Industry and Trade aims to help provinces and cities build and connect ecosystems of strategic goods between provinces. Most importantly, businesses in provinces and cities must connect with each other, share with each other, and support each other to take advantage of the FTA.

In addition, Mr. Ngo Chung Khanh said that the Government has assigned the Ministry of Industry and Trade to publish a set of FTA indexes (FTA Index), evaluating the results of FTA implementation in provinces, cities and localities.

“We hope that with similar thinking to the PCI index, the FTA Index will help provinces pay more attention and pay more attention to making effective use of FTAs. When these activities begin to be actively implemented, the efficiency of taking advantage of FTAs in localities will increase significantly," Mr. Ngo Chung Khanh commented.