Hanoi helps firms implement trade deals

Hanoi helps firms implement trade deals

Hanoi is accompanying local business in international economic integration by formulating mechanisms and policies to support them in the implementation of the country’s various free trade agreements.

Double digit export growth

According to the Hanoi People’s Committee, the export turnover of goods in June 2022 reached about US$1.517 billion, up 6.8 percent from May 2022 and 17.5 percent from June 2021. In the first half of this year, the commodity exports turnover reached US$8.3 billion, up 17.1 percent over the first half of 2021. Some key items with increased export turnover in this period included textile and garment, reaching US$1.22 billion, up 29.6 percent; computer components and peripherals, US$1.072 billion, up 20.2 percent.

The total import turnover of goods hit US$3.675 billion in June and US$20.5 billion in the first six months of 2022, the latter of which is 24.5 percent higher than the same period in 2021. Among the items of highest value were machinery, equipment and spare parts reaching US$2.996 billion, down 5.6 percent; petroleum US$2.934 billion, 2.8 times higher than the same period in 2021; computers, electronic goods and components at US$1.535 billion, up 28.7 percent.

Authorities help business

Vietnam is one of the few countries in the world that have negotiated and signed 15 free trade agreements (FTAs), facilitating the participation of Vietnamese commodities in global production networks.

However, businesses also faced challenges. The biggest challenge posed by the Regional Comprehensive Economic Partnership (RCEP), for example, is the development of Vietnam’s support industry, which does not manufacture sufficient raw materials and components. This and other free trade treaties make imported raw materials cheaper, stimulating imports instead of domestic production.

The UK-Vietnam Free Trade Agreement (UKVFTA), which came into force in May 2021, has provided Vietnamese companies, in general, and Hanoi’s in particular with great opportunities for cooperation, investment attraction, technology transfer, and participation in the UK’s industrial and energy supply chains. However, the deal also requires Vietnam to be proactive in studying the UK’s higher technical standards and export procedures and adapting production models to meet them as well as customer needs.

In order to support Hanoi companies in taking advantage of opportunities arising from FTAs, the city people’s committee issued a plan that includes building support mechanisms and policies to raise capital, provide training and access to information, technology and markets in order to improve competitiveness, particularly of small and medium-sized enterprises.

In addition, the city will help businesses participate in supply chains involving UK businesses to take advantage of the UKVFTA benefits and tighten cooperation between businesses of the two sides to form and develop supply chains.

The city will also promote the application of science and technology in production and business, and improve labor productivity, and encourage innovation and startups to create and launch new technologies and products.

In particular, Hanoi will focus on restructuring its agricultural sector, and on digital transformation and advanced production models to improve product quality, environmental protection, and origin traceability. The city will support improvement of human resources, provide specialized training for companies and intensify investment, trade and tourism promotion programs in members states of the RCEP agreement among Asian-Pacific nations.

In 2022, Hanoi will boost external economic activities for recovery and sustainable development, focusing on international economic integration, promptly updating information on foreign markets, strengthening cooperation between authorities and businesses and among businesses themselves, and anticipating trade and investment trends around the world.

VietNam Economic News