Free trade deals boost exports, imports despite challenges
Free trade deals boost exports, imports despite challenges
The 15 free trade agreements (FTAs) to which Vietnam is a signatory, and the Regional Comprehensive Economic Partnership (RCEP) coming into force on January 1, 2022, continue to be one of the driving forces of the country’s trade growth.
Vietnam’s exports have been thriving |
Proving efficiency
The Covid-19 resurgence has negatively affected the country’s socioeconomic development. Despite pandemic challenges, Vietnam’s economic picture has still recorded bright spots.
Vietnam’s exports to key markets have maintained high growth rates, especially those to markets of FTA signatories, such as the EU, the UK, Canada and Mexico. According to the Ministry of Industry and Trade, in the first 11 months of 2021, Vietnam’s export turnover reached an estimated US$299.67 billion, an increase of 17.5 percent compared to a year ago. Deputy Minister of Industry and Trade Do Thang Hai said Vietnamese businesses have effectively exploited FTAs to promote exports.
The EU-Vietnam Free Trade Agreement (EVFTA) has made significant contributions to economic development of the two sides. Despite the complicated developments of the Covid-19 pandemic, bilateral trade turnover still recorded high growth, with Vietnam’s exports to the EU reaching about US$35.7 billion in the first 11 months of 2021, a year-on-year increase of 11.9 percent.
Alain Cany, chairman of the European Chamber of Commerce in Vietnam (EuroCham), said the two sides have maintained trade activities and felt no disruptions despite the heavy impact of the Covid-19 pandemic. The trade deal has brought mutual benefits to participating countries, ensuring fair competition. It is expected that two-way trade between the EU and Vietnam will continue to increase further in the coming years.
The UK-Vietnam Free Trade Agreement (UKVFTA), which took effect on May 1, 2021, has also brightened Vietnam’s economic picture. Emily Hamblin, British Consul General in Ho Chi Minh City and UK Trade Director for Vietnam, said Vietnam is one of the UK’s important trading partners. In recent years, bilateral trade turnover has seen a three-fold increase, Hamblin said.
Thanks to the effect of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Vietnam’s exports to Canada and Mexico have maintained double-digit growth.
Exploiting potential markets
New-generation FTAs to which Vietnam is a signatory are expected to be a driving force for the country’s economic growth in 2022, too. According to the Vietnam Association of Seafood Exporters and Producers (VASEP), Vietnamese businesses need to quickly take advantage of opportunities provided by the EU, such as support packages and disbursement to rebuild supply chains.
Once the RCEP is ratified by all signatories and takes full effect, it will cover a market of 2.2 billion people (accounting for about 30 percent of the world’s population), have a gross domestic product (GDP) of US$26.2 trillion (representing 30 percent of the global GDP) and become the largest free trade area in the world in terms of population size. The agreement is expected to strengthen regional supply chains and economic recovery in the post-pandemic period.
Ngo Chung Khanh, deputy director of the Multilateral Trade Policy Department under the Ministry of Industry and Trade, said Vietnamese businesses need to have a serious view of integration as well as take advantage of opportunities provided by the international economic integration process.
| The Ministry of Industry and Trade will continue to implement solutions to support businesses and effectively exploit FTAs. |
