Businesses advised to take better advantage of FTA benefits
Updated : Tuesday, January 08, 2019 3:20 PM (GMT+0700)

Vietnam’s joining offree trade agreements (FTAs) is quite suitable in the context of tradeglobalization. However, to promote the efficiency of boosting exports, aconcerted policy system is needed to help businesses successfully takeadvantage of benefits brought by the FTAs, according to insiders.

Illustrative image - Source: VNA

A survey by the Vietnam Chamber of Commerce and Industry(VCCI) shows that the rate of taking advantage of FTA benefits by Vietnameseenterprises is falling. 

Businesses attributed the fall to shortcomings in Stateoffices’ enforcement of policies, strict rules of origin, and their lack ofinformation about commitments and how to take full advantage of the FTAs. Manyalso acknowledged that their firms’ competitiveness is weaker than that ofpartners whose countries are also members of the FTAs.

The garment and textile sector is considered one of thosetaking the most advantage of FTA benefits in Vietnam. However, President of theHo Chi Minh City Textile and Garment - Embroidery Association Pham Xuan Hongsaid that the sector only succeeds in doing so with the Republic of Korea,while the rates with other partners remain low.

The reason is that different FTAs have different requirementson rules of origin, Hong elaborated, adding that many FTAs requestclarification of origin of yarn, while Vietnam mainly imports materials fromChina.

According to experts, the rate of enterprises bringing intofull play the FTAs has been improved remarkably, from 10 percent at first to 38percent at present. However, it is not enough to equilibrate the trade balancewith partners.

They said that together with tariff reduction, new-generationFTAs include strict regulations on technical standards, source of origin, andintellectual property, which have made Vietnamese enterprises fail to beadaptive to these agreements.

To meet expectations when joining FTAs, Vietnam should carryout measures in a concerted way to increase competitiveness of exporters,experts said.

Pham Quynh Mai, deputy head of the Multilateral Trade PolicyDepartment under  the Ministry of Industry and Trade, suggested businessestake the initiative in accessing information about the FTAs and their contentsto make use of rules on origin in a systematic and effective manner.

Enterprises should also improve technology and increaseproduct quality, as all kinds of products which hope to enjoy tariff incentivesand be welcomed by consumers must meet all quality and technical requirementscommitted, Mai added.

Nguyen Thi Tue Anh, deputy director of the Central Institutefor Economic Management (CIEM), said that the small scale is a week point ofVietnamese enterprises, so they are incapable of meeting big orders.

She suggested they connect with others in the same sector toshare orders, or cooperate with multi-national groups and businesses to bringopportunities into full play to participate in the regional and global supplychains.

Besides efforts of enterprises, the Vietnamese Governmentshould focus on supporting enterprises to export their strong products byguiding them to implement rules of origin and simplifying procedures ofcertification and specific inspections, experts advised.

Source: VNA

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