After signing the VIFTA, Vietnam has become one of the most open economies, engaging in free trade with over 60 economies worldwide. (Source: TTĐN)

With the signing of the Vietnam-Israel Free Trade Agreement (VIFTA) in 2023, Vietnam has become one of the most open economies, engaging in free trade with over 60 economies worldwide. Vietnam is also the only country to have signed FTAs with all major global economic partners, including the US, Japan, China, the European Union (EU), the UK, and Russia.

These 16 effective FTAs with over 60 partners across continents is a basement for Vietnam to become a leading country in the region in participating in bilateral and multilateral economic cooperation frameworks. This fosters economic growth and helps the country overcome "headwinds".

Positive impact on the economy

At the 2024 Business Forum "Unlocking New Growth Drivers" held in April, Mr. Trinh Minh Anh, Chief of the Office of the Interagency Steering Committee for International Economic Integration, under Ministry of Industry and Trade, said that along with joining the World Trade Organization (WTO since 2007), the implementation of FTAs has contributed to increasing Vietnam's GDP by over 300% and trade turnover by 350%.

He emphasized: "This result is evidence of our Party's sound policy on international economic integration, including participation in FTAs and the timely directives of the Government in strengthening the implementation and effective exploitation of FTAs towards promoting international economic integration efficiently."

FTAs have created momentum to expand markets, trade, exports, and investment opportunities. Participating in FTAs has helped Vietnam's economy maintain a high growth rate of 6-7% per year, stabilize the macroeconomy, control inflation, and ensure balances.

From 2018 to 2022, Vietnam's average annual export-import turnover growth rate reached 11.3%. Despite the negative impact of the COVID-19 pandemic on the global and domestic economies, export-import activities still achieved positive growth.

"Participating in FTAs has truly created additional momentum and brought many positive impacts to Vietnam's economy. Export markets have been expanded and diversified; the financial services market has developed with the participation of many foreign investors; the institutional and policy system has gradually been improved to meet the integration requirements and commitments in FTAs," Mr. Trinh Minh Anh emphasized.

Dien grapefruit from Hoa Binh is available on supermarket in the United Kingdom. (Source: TTXVN)

Vietnamese agricultural products 'take off'

According to the Ministry of Agriculture and Rural Development, the total export turnover of agriculture, forestry, and fisheries in the first six months of 2024 reached $29.2 billion, an increase of 19% compared to the same period in 2023.

The agriculture sector has always played a role as the backbone of the economy, with strong growth indicators in terms of production, productivity, quality, and export turnover. This has been significantly contributed by FTAs, as Vietnam's leading export markets are countries participating in FTAs.

Last year, China, the US, Japan, and South Korea were the four largest export markets for Vietnam's agricultural, forestry, and fishery products. Most of these are markets signed FTAs with Vietnam.

Regarding fisheries, according to the Ministry of Industry and Trade, Vietnam is exporting seafood to over 160 markets worldwide. In which, exports to member countries of the Regional Comprehensive Economic Partnership (RCEP) have the largest volume, accounting for 63.5% of Vietnam's seafood export market share.

The Vietnamese Trade Office in Australia reported that Vietnamese shrimp has advantages over competitors in this market not only in quality and supply capacity but also in the processing level of value-added products.

"Consumers increasingly prefer Vietnamese shrimp, from restaurants to major supermarket chains in Australia, convenience stores and supermarkets. Notably, Australia is trending towards reducing imports from other countries due to lower processing levels than Vietnam," a representative of the Vietnamese Trade Office in Australia said.

Regarding rice, one of Vietnam's strengths, the door to the EU market is also wide open. The 27-member bloc will reduce tariffs to 0% after 3-5 years, creating opportunities for Vietnamese rice to compete with other countries when exporting to the EU. Currently, Vietnam has risen to 8th place among non-EU countries supplying rice to the EU.

Meanwhile, the fruit and vegetable sector is also experiencing strong export growth to the EU thanks to high-quality and deeply processed products. The Vietnam Fruit and Vegetable Association forecasts that export growth of fruits and vegetables to the EU market in 2024 could reach 20%.

Additionally, coffee, a key export product of Vietnamese agriculture, also has strongly grown in FTAs markets. In the first quarter of 2024, the export value of coffee to Asia and Europe increased sharply compared to the first quarter of 2023. The export proportion of coffee to Asia and Europe rose from 34.28% and 47.63% in the first quarter of 2023 to 37.81% and 48.34% in the first quarter of 2024, respectively.

FTAs are not only a strong driving force for economic growth but also support provincial and city People's Committees in expanding trade connections and promoting economic development. (Source: BDT)

Localities gradually joining in

According to the Ministry of Industry and Trade, FTAs are not only a strong driving force for economic growth but also support provincial and city People's Committees in expanding trade connections and promoting economic development.

For example, in Dak Lak, leveraging the advantages of FTAs, the province's goods are now exported to over 70 countries and territories, bringing products to consumers in many major markets worldwide.

Mr. Huynh Ngoc Duong, Deputy Director of the Department of Industry and Trade of Dak Lak province, said that the province has over 100 import-export enterprises, with export turnover growing at an average of 14.4% per year from 2016 to 2020. In 2021, export turnover was $1.151 million, reaching 101.3% of the plan; in 2022, export turnover increased to $1.5 million, reaching 125% of the annual plan, up 30.4% compared to 2021.

In Thai Binh province, Ms. To Thi Huong Lan, Deputy Director of the Department of Industry and Trade of Thai Binh, said that the effectiveness of FTAs is most evident in businesses' ability to take advantage of the benefits from FTAs.

Ms. To Thi Huong Lan emphasized, "The efforts of state management agencies, along with the proactive efforts of businesses, have borne 'sweet fruits'. By grasping information about FTAs, businesses in Thai Binh have prepared for integration, innovate to timely access and take advantage of tariff preferences when these agreements are signed, thereby boosting production and increasing revenue."

For exports to markets where Vietnam has signed FTAs, businesses in Thai Binh are facilitated and guided to obtain Certificates of Origin (C/O) to enjoy tariff preferences, thereby increasing the competitiveness of goods in markets such as ASEAN, Japan, Republic of Korea, China, Australia, and New Zealand.

"Overall, the utilization of tariff preferences from the FTAs that Vietnam has signed by businesses in Thai Binh is relatively favorable. Preliminary statistics show that the utilization rate of FTAs in the province currently accounts for about 40% of the total export turnover of the province," Ms. Lan cited.

Changes, efforts, and struggles to harvest more 'sweet fruits'

In the coming time, to boost exports and expand markets for key products, Dr. Doan Huu Tue, an economic expert, believes that localities and businesses need to enhance the effectiveness of international economic integration, build strong links among businesses, and cooperates with industry associations to improve competitiveness and rapid integration.

The expert noted that efforts should focus on three main areas to increase export value: developing export enterprises, diversifying export markets, and improving the quality of export products.

Mr. Trinh Minh Anh suggested that the Government, localities, and businesses need to be strategic, proactive, and innovative. He emphasized the importance of continuing to perfect the institutional, policy, and legal frameworks to ensure consistency, fairness, transparency, and non-discrimination, following proper procedures to minimize disputes with foreign investors and effectively resolve any that arise. Additionally, it is neccessary to continue building and improving early warning mechanisms to prevent disputes.

Furthermore, the coordinated efforts of all levels, sectors, localities, and businesses are needed. Regular monitoring and supervision of the implementation and enforcement of effective FTAs should be conducted, maximizing internal resources, closely linking and promoting the improvement of institutions, enhancing the quality of human resources, modernizing infrastructure, and improving overall strength and competitiveness.

"We need a well-thought-out strategy, a positive and proactive spirit, and strong innovation in both thinking and action to help unlock and promote growth drivers for the new phase," he emphasized.

With these changes, efforts and struggles, Vietnam will continue to harvest more 'sweet fruits' from the 16 FTAs currently possesses.