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Home / Economy / Trade - Service
Taking advantages from FTA to a higher level
Ngoc Thuy 10:16, 2017/12/23
The rate Vietnamese enterprises taking advantages from preferential treatment in free trade agreements (FTAs) is still at modest level, as the highest level is only at 64%.
As such, at the conference on ASEAN – Hong Kong FTA (AHKFTA), the issue above has been identified by experts. As of present, Vietnam has participated in 16 FTAs, in which 12 FTAs have been signed, negotiation process for 1 FTA has been concluded and 3 FTAs are under the negotiation process. Among 12 signed FTAs, 10 FTAs have come into effect, while the remaining 02 FTA have not yet been implemented. 
 
By taking full advantages of FTAs, Vietnam will have more chances to increase trade value.
By taking full advantages of FTAs, Vietnam will have more chances to increase trade value.
AHKFTA was signed on November 21, 2017. This is the latest FTA with the presence of Vietnam, opening opportunities for Vietnamese goods to infiltrate Hong Kong’s market. By signing this FTA, countries in ASEAN expected to facilitate export to Hong Kong, as well as to attract investment fund from potential investors. 

In 2016, ASEAN is the second largest trading partner of Hong Kong, on the other hand, Hong Kong is the 6th largest trading partner of ASEAN recently, with total trade value of 93.3 billion USD, contributing to 4.2% of total trade value of ASEAN. In which, Vietnam is the 13th largest trading partner of Hong Kong.

After the AHKFTA was signed, it will take at least 1 more year (since the signing date) for the two sides to discuss pending products specific rules (PSR). However, it is safe to say that AHKFTA will bring more benefits for Vietnamese enterprises during the trading process with China, the largest trading partner of Vietnam.

Economic experts said, both ASEAN and Hong Kong have ideal strategic geo-political location in term of goods and service trading with the presences of 4 out of 5 world largest sea ports and 2 out of 3 largest international airports. 

For Vietnam, there is an urgent need in taking full advantages of FTAs in general and AHKFTA in particular, in the context of global economic integration. In reality, the rate of Vietnamese enterprises taking advantages from preferential treatment in FTAs is still at modest level, with the lowest with ASEAN (30.3%) and highest with Chile (64%). While for other FTAs, the rate is as follow: ASEAN – China (31%); ASEAN – Korea, Vietnam – Korea (56%), ASEAN – Australia – New Zealand (34%). 

According to experts, in order to have an idea rate of FTA utilization, goods must meet requirements on the rule of origins designed specifically for each FTA, and AHKFTA is no exception. 

According to statistics of the General Department of Vietnam Customs (Ministry of Finance), foreign trade value of Vietnam as well as the scale of the economy has significantly improved. Specifically, on December 01, 2007, trade value had reached 100 billion USD for the first time, while the scale of the economy is 77.4 billion USD. Four years later, until December 24, 2011, trade value of Vietnam reached 200 billion USD and the scale of economy was 133 billion USD. At present, after 6 years, this number has reached 400 billion USD and the scale of the economy reached 200 billion USD.

In particular, the statistics number also recorded the a rapid growth of trade value since 2015 (from 300 billion USD) to gain more than 100 billion USD, reaching the milestone of 400 billion USD in 2 years – the period when many signed free trade agreements (FTAs) between Vietnam and Korea, ASEAN, Regional Comprehensive Economic Partnership (RCEP) and Eurasian Customs Union (EACU) came into effect. 
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