Enterprises are trying to take advantage of every opportunity from the FTA to keep the trade surplus. Photo: H.Diu

Finding solutions

Recent reports of a number of Vietnamese commercial affairs abroad showed that inflation, commodity price fluctuations, and signs of recession through a number of economic indicators in many markets had greatly affected the import and export activities of Vietnamese enterprises.

Not only that, competitive moves from exporting countries or strict conditions from import markets were still a big challenge for domestic enterprises.

Lawyer Dinh Anh Tuyet, Head of IDVN Law Office, arbitrator of the International Arbitration Center (VIAC), said that the commitments to export goods in the Free Trade Agreement between Vietnam and the European Union (EVFTA) were increasingly strict, such as the application of high standards on labour, environment, agricultural exploitation.

This required enterprises to have plans and solutions to overcome and be proactive.

Now enterprises were trying to find all solutions, including the narrowest “doors” to increase market share and export capacity. For example, with rice for export, the volume and value of rice exports reached 6.69 million tons and US$ 3.24 billion in the first 11 months of 2022, up 16.3% in volume and 6.9% in value respectively over the same period in 2021.

To achieve this result, Vietnamese fragrant rice brands have continuously entered major markets. For example, to take advantage of the EVFTA, private enterprise Ho Quang Tri and EUTEK Group signed an exclusive contract to distribute "Mr Cua ST25" rice in the UK market. Or Loc Troi Group has taken advantage of the method of exporting through the retail supermarket system in France, E.Leclerc, to bring rice products with the brand name "Com Vietnam Rice" to the EU.

Meanwhile, for textiles, Mr. Vu Duc Giang, Chairman of the Vietnam Textile and Apparel Association (VITAS) said that inflation pressure and the decrease in purchasing power of major countries had made enterprises more efforts to take advantage of opportunities from FTAs in diversifying markets and finding new markets. In addition, many enterprises had transformed production methods, promoted digital governance, solutions for domestic supply chain autonomy, and diversified products to help Vietnam export to 66 countries and territories. In particular, the programs of sustainable development and circular economy of Vietnamese enterprises had helped to stabilize, develop, and attract brands to choose Vietnam as a partner.

With Century Yarn Joint Stock Company, in order to capture the market demand that will turn to products associated with nature and environmental protection, this enterprise has planned to expand the Unitex factory capacity with the goal of increasing the proportion of recycled fibers.

The representative of Century Yarn expected that the contribution of recycled yarn would increase further in 2023, when the factory started operation in the fourth quarter of 2023 to supply to the domestic and export markets.

In addition, to overcome difficulties from the main export market which is facing difficulties, many enterprises have signed deals with large and reputable partners to promote exports. For example, An Cuong Wood Joint Stock Company has signed a business cooperation contract with Sumitomo Forestry America to supply all furniture for the projects that this company invested in the US market from 2022 onwards, with a target on sales increase of US$ 50 million by 2025.

Being proactive

The above efforts of enterprises have brought remarkable results in 2022. With the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), statistics from the Ministry of Industry and Trade showed that export turnover to markets of CPTPP countries reached more than US$ 45 billion in 10 months of 2022, up 22.1% over the same period in 2021. With EVFTA, trade surplus to the EU reached US$ 29.4 billion in 11 months of 2022, an increase of 42.4% over the same period in 2021.

Vietnam's average export growth rate to the EU market was 18.6%, even higher than the growth rate to the CPTPP market.

Another new generation FTA with high standards is the Free Trade Agreement between Vietnam and the United Kingdom of Great Britain and Northern Ireland (UKVFTA), after nearly 2 years of entry into force, goods exported to the UK market increased by 15.4%, many key export products and strengths of Vietnam such as agricultural products, garments, shoes grew by double digits and some items increased by 100%.

However, according to experts, the results of taking advantage of the FTA are very good, but the initiative of Vietnamese enterprises is not high in bringing products to partners in markets, especially new markets. Moreover, many enterprises face difficulties due to lack of specific information on commitments and application methods; or it is difficult for enterprises to compete due to limited capacity even though they have knowledge of FTAs.

Therefore, from the reality and new requirements from export markets and to make good use of the opportunities from the FTA, Vietnamese enterprises need to actively grasp and adjust their production and business plans and participate effectively and sustainably in the supply chain; make efforts in green production, implement social responsibilities, protect the environment as well as change thinking and get used to international regulations and laws in trade and investment.