As new free trade agreements (FTAs) are being signed, they are expected to push Vietnam into becoming more competitive by reducing trading costs and improving its business environment.
Following the signing of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam FTA (EVFTA) trade deals, the FTAs are expected to have a significant impact on the nation’s economy.
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Ho Chi Minh City International Integration Support Centre director Pham Binh An said at an economic conference here that CPTPP and EVFTA could help increase Vietnam’s gross domestic product (GDP) by 4.3 per cent and 1.3 per cent, respectively, by 2030. Shipments to the European Union are expected to surge by 44 per cent by 2030, while those to CPTPP member states are expected to rise by 14.3 per cent by 2035.
The Vietnam News portal said the two trade agreements would put pressure on the government to improve institutional governance, as well as the business climate, because of requirements included in the FTAs.
Up to last year, Vietnam had 17 FTAs with 60 countries, all of which offer the country a chance to transform its economy. Besides increasing exports, FTAs have helped to promote administrative reforms, improve infrastructure and en-sure equality in accessing resources.
The conference organized by Ho Chi Minh City Banking University and Ho Chi Minh City Youth Science and Technology Development Centre offered researchers, economic experts and scholars a chance to exchange views on how new FTAs will affect Vietnam’s economy.
Ngo Thanh Phong, a lecturer at Tien Giang University, said FTAs had created opportunities to participate in global supply chains, but the country must speed up administrative reforms and improve its investment environment, especially in the context of increased protectionism internationally.
The Planning and Investment Ministry’s National Centre for Socio-Economic Information and Forecast said between 2021 and 2025, the country’s GDP was forecast to rise to seven per cent on the back of new FTAs.
Vietnam Chamber of Commerce and Industry chairman Vu Tien Loc said the country’s economic openness was ranked behind Singapore among Asean members, but its competitiveness and capacity for integration were low.
In the World Economic Forum’s “2018 Global Competitiveness Report”, Vietnam ranked 77th out of 140 countries. It placed 99th for institutional competitiveness and 101st in business competitiveness. Experts said Vietnamese products had advantages in certain markets, such as EU, which has little direct competition with Vietnam.
However, to make the most of their position, local businesses must meet the EVFTA’s requirements on environmental standards, labour relations, product origin and sustainable development.
By NST/ Vietnam Insider