Joining so many FTAs makes no sense: Expert
Vietnam has signed many free trade agreements (FTAs) since 2010 but its participation in so many FTAs makes no sense, noted Tran Toan Thang from the National Center for Socio-Economic Information and Forecast.
At an international conference, themed “Prospects of Vietnam’s economy in the 2021-2025 period: opportunities and challenges from new-generation free trade agreements,” held in Hanoi on November 21, Thang stated that since the Laws on Enterprises and Investment came into force, 16 FTAs have been signed, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the European Union-Vietnam Free Trade Agreement (EVFTA).
These FTAs are expected to bring benefits in trade, investment and technology to Vietnam. FTAs will also force Vietnam to reform its business environment and increase its competitiveness.
State management agencies have always expected FTAs to help diversify the markets for local goods and reduce the dependence on certain markets.
However, the participation in so many FTAs brings both opportunities and challenges. A study by the National Center for Socio-Economic Information and Forecast showed that since 2012, Vietnam’s exports have depended on certain markets such as the United States, China, South Korea and the European Union.
In addition, the recent export revenue growth does not result solely from FTAs.
In the 2021-2025 period, Vietnam’s economy is forecast to face both advantages and disadvantages, according to Dang Duc Anh, deputy director of the National Center for Socio-Economic Information and Forecast.
Specifically, the spread of the fourth industrial revolution and the participation in new-generation FTAs, such as the CPTPP and EVFTA, will help Vietnam promote exports, investment and technology application.
However, the country will also face the negative impact of the global economic slowdown given increasing trade protectionism and tensions. Meanwhile, the country’s use of capital, especially public investment, remains ineffective, and its innovative capacity is limited.