Vietnam hopes FTAs will bring more opportunities to expand export markets

If Vietnamese enterprises have thorough preparations, they can take full advantage of the opportunities to be brought by free trade agreements (FTA) between Vietnam and other countries in the world.

Vietnam is under the negotiations for a series of FTA with countries and blocs. According to the Ministry of Industry and Trade (MOIT), to date, Vietnam and Chile has conducted seven negotiation sessions on a bilateral FTA. The ministry believes that it is very likely that the two sides will reach an FTA after some more negotiation sessions.

Meanwhile, Vietnam and Canada have reached the consensuses on basic points for the Foreign Investment Promotion and Protection Agreement FIPA, which is expected to be signed right in 2011.

The issues relating to the possible impacts of the FTA on the Customs Union of Russia, Belarus and Kazakhstan, are being considered by the Vietnamese agencies and the union’s agencies. Recently, the EU has been joining forces to organize events in Vietnam where the advantages are analyzed if the two sides sign an FTA.

The European Free Trade Association EFTA, including Norway, Switzerland, Iceland and Liechtenstein, and Vietnam, have formed up a taskforce in charge of researching and reporting the possibility to conduct negotiations for an FTA between Vietnam and EFTA.

In Asia, Vietnam, as a member of ASEAN bloc, is joining the FTA negotiations with big partners. Besides, it is also possible that Vietnam would conduct negotiations for the FTA between Vietnam and Laos and between Vietnam and Taiwan.

The Trans-Pacific Strategic Economic Partnership Agreement or TPP, if successfully negotiated, is believed to help open the door to one of the most important market area for Vietnam. At the latest sixth negotiation rounds, the countries including Brunei, Chile, Malaysia, New Zealand, Australia, Peru, Singapore, the US and Vietnam discussed the issues relating to the trade promotion.

TPP is the area which has the gross domestic products GDP of up to 16 trillion dollars, the total population of 472 million. TPP has been described as the most ambitious trade integration process in the history of Asia-Pacific.

With the FTA which were signed or will be signed in the future, Vietnamese enterprises have a lot of opportunities to expand the export markets.

As for the export to the EU, for example, experts can foresee the sharp increases in the export of some product items to the market, once the FTA between Vietnam and EU is signed and takes effect.

If Vietnamese garment products can enjoy the import tariff of zero percent when entering the EU market, they will have big advantages over the products from Bangladesh, China, India or Pakistan, because the products from the nations are imposed the average tax rate of 11 percent, according to Claudio Dordi, an expert from Multrap project (the European Union’s Multilateral Trade Assistance Project).

The same advantages will also be enjoyed by Vietnamese footwear producers once preferential tariffs are applied under the frame of the Vietnam-EU FTA.

Regarding the Russian market, Le Van Dao, Deputy Chair of the Vietnam Textile and Apparel Association (Vitas), said Vietnamese enterprises can exploit the market and can raise the export turnover to Russia to one billion dollars, if they can enjoy preferential tariffs.

Russia is the market which has a very high demand for garment products, but it is imposing overly high tariffs, therefore, Vietnamese garment companies still cannot cement their positions in the market.

“However, the situation will be different, and Vietnamese enterprises will have opportunities to boost exports to the market if an FTA is signed,” Dao said

In fact, Vietnamese enterprises still cannot take full advantage of the signed FTAs. For example, the growth rate of garment exports to Japan is modest at 10 percent per annum. – Vietnamnet

Tags: ASEAN Free Trade Agreement, FTAs