Add a set of indicators to evaluate the results of local FTA implementation

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Businesses need a lot of support to make good use of opportunities from FTAs. Photo: H.Diu
Businesses need a lot of support to make good use of opportunities from FTAs. Photo: H.Diu

Local business support

According to the Ministry of Industry and Trade, the import and export results are proof that Vietnamese enterprises have been making good use of free trade agreements (FTAs).

For example, with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), after 3 years of implementation, the export turnover of goods to markets in the bloc has grown by 75-100%.

With the EU-Vietnam Free Trade Agreement (EVFTA), many key products of Vietnam have been exported to the EU with high growth, especially a number of commodity groups such as iron and steel (200% growth rate), coffee (75.2% growth), and pepper (55.8% growth).

According to the recent business survey results and summary reports on the implementation of FTAs by localities in 2021 by the Vietnam Federation of Trade and Industry (VCCI), in 2021, with EVFTA, there will be about 38 of 63 provinces with import-export activities with EU countries and about 50% of provinces and cities have import-export activities with CPTPP countries.

In fact, many localities have launched many programs to support businesses to take advantage of FTAs. For example, in Hanoi, in mid-2022, the City People’s Committee issued Plan No. 163/KH-UBND on the implementation of the Free Trade Agreement between Vietnam and the United Kingdom of Great Britain and Northern Ireland (UKVFTA) in the city.

Accordingly, the city will focus on building mechanisms and policies to support and improve competitiveness for industries and businesses. Hanoi has also issued Plan No. 162/KH-UBND, building mechanisms and policies to support and improve competitiveness for industries and businesses, making effective use of the Regional Comprehensive Economic Partnership (RCEP), with solutions to support improving the quality of human resources, promoting investment, trade and tourism promotion programs in RCEP participating countries.

In Ho Chi Minh City, the People’s Committee of Ho Chi Minh City also said that it has developed and implemented a plan to promote exports; organize the exploitation and take advantage of opportunities from FTAs to find solutions to develop the market; take full advantage of the FTAs already in force; diversify export and import markets; diversify the structure of export products, improve the competitiveness of export products.

Or in Son La, in February 2022, the Provincial People’s Committee issued a plan to implement the FTAs of which Vietnam is a member in the province. Including the tasks of propaganda and information dissemination; formulating and implementing laws and institutions; enhancing competitiveness and developing human resources.

In Thanh Hoa, according to the Provincial People’s Committee, in 2021, the whole province will have 61 enterprises exporting to the markets of CPTPP member countries, 52 enterprises exporting to the EVFTA market, five enterprises exporting to the UKVFTA market. Export turnover of goods to the CPTPP member market reached 1.91 billion USD, to the EVFTA market reached 1.64 billion USD, to the UKVFTA market reached 0.33 billion USD.

Focus on strategic products

However, VCCI said that activities to promote support for import-export businesses of many provinces and cities currently still focus on traditional markets, not promoting new markets with FTAs in CPTPP or EVFTA. There are localities, although export turnover is very large, but the proportion of important markets in CPTPP such as Canada or EU countries is still relatively modest.

Also commenting on this issue, Ngo Chung Khanh, Deputy Director of the Multilateral Trade Policy Department (Ministry of Industry and Trade), said that the issuance of implementation plans by localities is more and more active, many provinces have given very detailed information for each item, each field. However, compared to the current potential and space, localities have not yet delved into specific support for industries and businesses that need to take advantage of FTAs or are strategic products for export growth and increase utilization rate.

From the above issues, businesses believe that business support needs to be done more strongly, more closely meeting the needs of businesses. Moreover, in the context of limited support resources, localities should focus on 1-2 strategic items.

Ngo Chung Khanh for example, localities with strengths in rice such as Long An should focus on developing rice, Hai Phong can be leather and footwear.

Besides, businesses also recommend localities to review, removing obstacles in administrative procedures, creating a mechanism for connection and coordination between agencies from the central to local levels, between state agencies and business associations.

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