FTA Index is key driver to implement free trade agreements

FTA Index is key driver to implement free trade agreements

The index for assessing the implementation results of Free Trade Agreements in localities (FTA Index) is a new tool that provides a transparent database for the Government, as well as central and local agencies in directing and supervising economic integration efforts.

Prime Minister Phạm Minh Chính spoke at a ceremony on announcing the FTA Index 2024 yesterday. VNA/VNS Photo Dương Giang

The FTA Index 2024 was released in Hà Nội on April 8 by the Ministry of Industry and Trade, assessing the implementation of Free Trade Agreements (FTAs) by localities and businesses last year.

The FTA Index is based on four main pillars: FTA dissemination and advocacy; implementation of legal regulations on FTAs; support policies to enhance competitiveness; and the implementation of commitments on sustainable development. 

The top 10 localities leading the country in terms of FTA Index score in 2024 are: Cà Mau (34.90 points), Thanh Hóa (34.13 points), Bình Dương (34.03 points), Khánh Hòa (32.96 points), Trà Vinh (32.74 points), Long An (32.50 points), Hà Giang (32.46 points), Bạc Liêu (32.43 points), Ninh Bình (31.74 points) and Điện Biên (31.72 points).

In his speech at a ceremony announcing the FTA Index, Prime Minister Phạm Minh Chính affirmed that the index for assessing the implementation results of Free Trade Agreements in localities (FTA Index) was a new tool that provides a transparent database for the Government, as well as central and local agencies in directing and supervising economic integration efforts. 

The Prime Minister emphasised that the effective implementation and enforcement of FTAs was not only about fulfilling the international commitments Việt Nam has made, but would also serve as a driving force to promote domestic reforms, expand markets for goods and services, and enhance the competitiveness of the economy.

Minister of Industry and Trade Nguyễn Hồng Diên said this index would serve as a catalyst for both local authorities and enterprises to enhance their engagement with FTAs and optimise their benefits.

Over recent years, the Government and Prime Minister had spearheaded initiatives to successfully negotiate and implement 17 FTAs with major economies worldwide. 

As a result, Việt Nam had emerged as a leading country in the region, participating in both bilateral and multilateral economic cooperation frameworks.

Minister Diên noted the effective implementation of these agreements had expanded and diversified markets, improved supply chains, and increased the participation of Vietnamese goods in global production and supply chains. 

He noted the increasing competition among major economies and the shifting dynamics in international trade, particularly after decisions such as former US President Donald Trump's imposition of reciprocal tariffs on imports. 

He also highlighted the growing trend of global economic integration and the challenges posed by trade wars and protectionism. 

In this context, FTAs had become vital, not just for expanding trade, but also as a key instrument for fostering international economic cooperation.

According to the Ministry of Industry and Trade, Việt Nam's import-export turnover has seen robust growth, contributing to a shift from a trade deficit to a consistent trade surplus for nearly nine consecutive years. 

In 2024, the country reached a record trade surplus of nearly $25 billion. This has contributed to strengthening foreign exchange reserves, stabilising exchange rates, and bolstering macroeconomic indicators, which are key drivers of the nation's economic development.

Despite these positive outcomes, Minister Diên pointed out that the implementation of FTAs had been uneven across localities and enterprises, particularly in the small and medium-sized enterprise sector. 

Many businesses had not yet fully updated their knowledge of specific commitments or lack the capacity to meet the standards required for origin, technology, environmental, and labour criteria.

Another key issue was the insufficient coordination between central agencies, local authorities, and the business community, which hampered the full potential of FTAs. 

The lack of synchronisation reduced the overall impact of these agreements, preventing businesses from fully capitalising on the benefits they offer.

To address these challenges, the Government tasked the Ministry of Industry and Trade with developing the FTA Index - a tool designed to assess and track the implementation results of FTAs at the local level. 

This index would provide a transparent, objective, and comprehensive database of each locality’s FTA commitments, helping to identify gaps and areas for improvement.

The FTA Index would also serve as a crucial resource for the Government and relevant ministries in developing effective policies and mechanisms for import and export management. 

By using the FTA Index as a guide, policymakers could create practical and efficient strategies that encourage greater participation from the business community. 

This, in turn, would enable Việt Namese enterprises to better leverage the opportunities provided by FTAs, driving growth in production, business, and exports, and ultimately enhancing the country’s competitiveness on the global stage. 

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