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Taking advantage of the FTA "magic wand"

Người Lao ĐộngNgười Lao Động16/02/2025

In the context of unstable and unpredictable global trade, Vietnamese export enterprises need to seize the advantages and opportunities from free trade agreements.


With 17 free trade agreements (FTAs) signed and in effect, in 2024, authorized agencies and organizations issued about 1.8 million sets of preferential certificates of origin (C/O) worth more than 100 billion USD, an increase of 18% in the number of C/O compared to 2023, accounting for 28% of Vietnam's total export turnover. With the remaining 72% of export turnover, many items enjoy 0% import tax in some markets.

Benefits from CPTPP gradually decrease

Mr. Than Duc Viet, General Director of Garment 10 Corporation, emphasized that taking advantage of incentives from FTAs is one of the ways to help businesses maintain export growth in the face of unpredictable global trade developments.

Although there are orders until the end of the second quarter of 2025, the leaders of Garment Corporation 10 are also worried because European customers require very strict product standards. That is, for any product exported to this market, the proportion of recycled fibers used to produce fabric and the proportion of fabric used to produce clothing must reach 35%. This poses a challenge for businesses to quickly convert this year, otherwise, export activities to the European market will be affected.

"To make good use of the FTAs, we are investing heavily in building factories that meet green standards, quickly and strongly converting to using clean energy sources," said the leader of Garment 10 Corporation.

Tận dụng

Businesses need to make good use of free trade agreements in the context of unstable global trade.

When assessing the results of the 5-year implementation of the Comprehensive and Progressive Agreement for Trans -Pacific Partnership (CPTPP), the Vietnam Trade Office in Canada once stated that the rate of preferential utilization by Vietnamese enterprises is still very low. Meanwhile, the tariff advantage that CPTPP brings to Vietnamese exports is gradually disappearing.

Explaining this, Ms. Tran Thu Quynh, Trade Counselor of the Vietnam Trade Office in Canada, said that Canada has signed and is promoting the signing of more FTAs with a series of partners in South America, the Indo- Pacific region (such as the Philippines, India, Indonesia) and the ASEAN region. These are all markets with a commodity structure quite similar to Vietnam. In addition, Canada also calls on its businesses to turn to the South American economic bloc and allied countries to build a sustainable and reliable supply chain. This trend may have a more negative impact on the export of some Vietnamese products with strengths such as fruits, seafood, textiles, footwear, etc.

Competition is getting fiercer

The Vietnam Trade Office in Canada said that in the coming time, it will help businesses from both sides better understand the content of the commitments and how to take advantage of the CPTPP in their investment and business strategies. At the same time, it will promote the fields and products in which Vietnam has a competitive advantage, as well as the key industrial fields and foundations that we want to attract.

The Vietnam Trade Office in Canada will also continue to focus on promoting connectivity between the two economies , especially in the fields of maritime and air transport to help reduce costs and time to bring Vietnamese goods to this market.

With the Vietnam - European Union Free Trade Agreement (EVFTA), Mr. Tran Ngoc Quan, Vietnam's Trade Counselor in Belgium and the European Union (EU), assessed that the overall outlook for Vietnam's exports to this market in 2025 is relatively positive. Entering the 5th year of implementing the EVFTA, it is expected that about 90% of imported goods will have a tariff of 0%.

However, the challenge of accessing the EU market is not small. When tariff barriers are no longer an effective tool to protect the domestic market, the EU tends to use more anti-dumping, anti-subsidy, self-defense measures or promote high, sustainable standards, requiring manufacturers to have abundant technology and capital.

Besides, the EU is the target market of many countries and each country has its own approach - such as promoting FTA negotiations, increasing the commercial presence of exporting companies in the EU, promoting e-commerce...

Counselor Tran Ngoc Quan noted that it is necessary to deal with a number of issues, such as preventing the transfer of goods through Vietnam to access the EU market to benefit from EVFTA or evading self-defense taxes, anti-dumping taxes, food safety, and pesticide residues for some agricultural products. "To bring more vegetables and rice into supermarkets in the EU, first, domestic enterprises must produce and export products that are consumed a lot here. Then, there must be better measures to preserve goods and, most importantly, reduce costs," Mr. Quan noted.

On the side of the Ministry of Industry and Trade, Ms. Trinh Thi Thu Hien, Deputy Director of the Import-Export Department, emphasized that the rules of origin are a tool to help goods benefit but can also nullify tariff benefits if the goods do not meet the origin requirements. Therefore, the department will guide enterprises to properly implement international commitments and Vietnam's regulations related to the origin of goods. Enterprises themselves need to have a complete document storage system to ensure effective origin verification, help C/O to be accepted and goods to enjoy tariff incentives.

More FTAs will be negotiated

In 2024, Vietnam will put the Vietnam - Israel FTA into effect and sign the Vietnam - UAE FTA, thereby creating conditions to bring Vietnamese goods to the Middle East and North Africa markets...

Mr. Luong Hoang Thai, Director of the Multilateral Trade Policy Department - Ministry of Industry and Trade, informed that the ministry will research to initiate negotiations for more FTAs with markets in the Middle East, Africa, and Latin America - which still have a lot of potential and room for development.

Also assessing the huge potential of the Middle East market, Mr. Tran Dinh Thang, Director of Nhat Viet Company Limited, recommended that the Ministry of Industry and Trade pay more attention to negotiating FTAs with niche markets and underdeveloped countries because the product requirements of these markets are suitable for the production level of Vietnamese enterprises.



Source: https://nld.com.vn/tan-dung-dua-than-fta-196250216213411366.htm

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