FTAs create driving force for 2021 exports
FTAs create driving force for 2021 exports
Vietnamese businesses have made good use of incentives provided by free trade agreements (FTAs), creating an important driving force for export growth in 2021.
Many Vietnamese goods are available in the European market
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Maintaining steady growth
According to the Ministry of Industry and Trade, Vietnam achieved record trade results in 2020 despite the pandemic challenges, with total trade revenue reaching an estimated US$543.9 billion, a year-on-year increase of 5.1 percent. Of the total, exports hit US$281.5 billion and imports stood at US$262.4 billion, an increase of 6.5 percent and 3.6 percent compared to a year ago, respectively. In particular, the domestic economic sector continued to be the driving force for export growth.
Economist Vo Tri Thanh attributed these positive results to the resilience of local businesses, coupled with state support. Garment and textile, leather and footwear businesses continued to maintain export momentum despite the disruption of global supply chains due to the Covid-19 pandemic.
Furthermore, agricultural products such as coffee, pepper and rubber maintained good export prices despite the adverse impacts of the Covid-19 pandemic, reflecting high international demand for essential items. It also points to the successful utilization by Vietnamese enterprises of new-generation free trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA). Vo Tri Thanh said several ten thousand sets of certificates of origin were issued in 2020 in an effort to take advantage of incentives set out in the EVFTA, while local businesses have taken full advantage of the CPTPP in a relatively effective manner.
Driving force for exports
Despite potential risks, opportunities for Vietnam to increase its exports in 2021 are available. The implementation of free trade agreements will help Vietnam accelerate the economic recovery process, promote restructuring, attract additional foreign investments and strengthen training of high-quality human resources.
To make the most of opportunities provided by free trade agreements, Vietnam must promote linkages between domestic businesses and foreign companies, enhance the added value of local production, increase product competitiveness and improve firms’ position in the international arena.
In addition, industries and sectors need to carry out reforms to improve corporate governance and promote digital transformation in the management and operation of businesses.
| The Ministry of Industry and Trade plans to strengthen information dissemination about free trade agreements to support businesses, while fine-tuning the legal system, simplifying administrative procedures and speeding up the deployment of the Vietnam National Single Window mechanism in order to create favorable conditions for export and import activities. |
