Vietnam firmly integrates into the international economy

Sat, 24 Sep 2022 10:51:00  |  Print  |  Email   Share:

Thanks to a positive and proactive spirit, Vietnam is increasingly achieving important results in the process of international economic integration. 15 Free Trade Agreements (FTAs) in progress and two FTAs under negotiation have brought Vietnam into the center of global trade "flow", strongly supporting import-export activities, helping Vietnam step by step overcome difficulties of the Covid-19 pandemic, consolidating and affirming its position in the international arena.

Textile and garment are one of the industries that make good use of opportunities from the FTAs. Photo: Nguyen Thanh

Textile and garment are one of the industries that make good use of opportunities from the FTAs. Photo: Nguyen Thanh

Success from the CPTPP and EVFTA

FTA is a key feature in Vietnam’s international economic integration policy and import-export in recent years. According to economist Vo Tri Thanh, Vietnam has more and more advantages from integration. Thanks to the effective negotiation, signing and implementation of the FTAs, Vietnam has significantly improved access to export markets, creating more jobs, and promoting sustainable economic growth.

In the last two years (2020 - 2021), despite being heavily affected by the Covid-19 pandemic, Vietnam's import-export turnover still maintained a high growth rate. In 2020, import and export reached more than US$545 billion, with a trade surplus of more than US$19 billion, the largest ever up to that time. In 2021, import-export surpassed the milestone of US$660 billion, with a trade surplus of US$4 billion, putting Vietnam in the group of 20 leading economies in terms of international trade. In the first seven months of 2022, the results were still positive with the total import-export turnover estimated at US$431.94 billion, up 14.8% over the same period last year.

Emphasizing the outstanding impacts of the FTAs on the economy, Dr. Le Huy Khoi, Head of the Department of Scientific Management and Postgraduate Training, Institute for Strategy and Policy Research (Ministry of Industry and Trade), said that in addition to promoting exports, the FTAs made an important contribution to creating an open investment environment, thereby attracting large corporations and investors from countries in the region and the world to invest in Vietnam. Notably, there has been a trend of accelerating investment in Vietnam through high-tech projects and building modern production "bases" of international investors.

Analyzing the level of utilization of one of the most popular new generation FTAs in recent times, the CPTPP, Vo Hong Anh, Deputy Director of the European and American Markets Department (Ministry of Industry and Trade), said that since the CPTPP took effect for Vietnam (January 14, 2019), exports to the member countries have grown by leaps and bounds, especially in the Americas. For example, exports to Canada in 2021 reached US$5.3 billion, up 20.8% compared to 2020 and up 75% compared to the time before the CPTPP took effect. Similarly, for Mexico, in 2021, exports to this market reached US$4.6 billion, an increase of more than 100% compared to the time before the CPTPP took effect. "Vietnamese enterprises are currently exploiting the incentives of the CPTPP," said Hong Anh.

Regarding the EVFTA, Luong Hoang Thai, Director of the Multilateral Trade Policy Department (Ministry of Industry and Trade), said that, as a high-quality FTA with extensive commitments, the EVFTA has helped Vietnamese enterprises stand firm during the outbreak of the Covid-19 pandemic. Right from the first year of the EVFTA implementation (from August 2020 to the end of July 2021), Vietnam's export turnover to the EU market reached US$39.75 billion, up 6.2%. Import turnover reached US$16.51 billion, increased by more than 24% compared to before the agreement. Entering the second year of implementation (from August 2021 to the end of May 2022), Vietnam's export turnover reached US$36.8 billion, up 39.17% over the same period last year; and import turnover reached US$13.94 billion, down 32%.

Increase businesses’ initiative

In addition to the achieved results, in the process of extensive international economic integration, especially taking advantage of opportunities from the FTAs, Vietnamese enterprises have faced many difficulties and challenges. Thai said that for the EVFTA, enterprises faced many difficulties due to strict requirements on quality standards and product safety. Besides, enterprises still lack information about regulations, domestic requirements of importers, measures to deal with commercial lawsuits, as well as a lack of links with enterprises in the same industry to ensure product diversity, and output, and reduce export costs. “Therefore, businesses need to follow up and update information regularly to promptly respond,” said Thai.

From the perspective of enterprises and industries, meeting the origin rules of the FTAs, typically the CPTPP, is a matter of particular concern. Luong Duc Long, Vice President and General Secretary of the Vietnam Cement Association, said that for the cement industry, most of the input materials used local raw materials and fuels.

“Information about the process, procedures, and records are currently not fully understood by enterprises. Therefore, we hope that State management and specialized agencies will support businesses to implement the standards of origin rules, creating favorable conditions for cement exports to the CPTPP countries and other markets,” said Long.

In addition to support from State management agencies, according to Tran Thi Lan Anh, General Secretary of the Vietnam Federation of Trade and Industry, standing at the “door” of integration, the initiative of each enterprise is very important. Enterprises need to actively explore commitments in the FTAs, typically the RCEP; proactively prepare, act appropriately to make the most of opportunities as well as handle arising challenges. “Most importantly, businesses need to focus on improving their capacity to have enough foundation and strength to compete in the context of integration,” said Lan Anh.

Concerning international economic integration, promoting Vietnam’s imports and exports, Minister of Industry and Trade Nguyen Hong Dien said that the Ministry of Industry and Trade would focus on supporting businesses to make good use of the signed FTAs to speed up production and export; instructing businesses to proactively take advantage of opportunities when the world demand is increasing for Vietnam’s key products.

By: Business Forum Magazine

Source: https://en.diendandoanhnghiep.vn/vietnam-firmly-integrates-into-the-international-economy-n35333.html

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