Taking advantage of the benefits brought by FTAs by Vietnamese enterprises today

Vietnam has signed and put into effect 16 FTAs, including 03 new generation FTAs, 54 FTA partners in 4/5 continents, ranking 17th in the world, 02nd in ASEAN in terms of the number of participating trade agreements. The assessment of the level of benefits for enterprises in particular and the Vietnamese economy in general from participating in the signing of FTAs in recent years has been analyzed, evaluated and actively promoted in many mass media as well as by state management agencies at both central and local levels.

According to the assessment at the Consultation Workshop on building an ecosystem to take advantage of Free Trade Agreements organized by the Ministry of Industry and Trade on June 20, 2025, Vietnam's import-export growth and trade balance in the period 2004-2024, Vietnam's exports from 48th in 2004 to 15th in the world in 2024, imports: from 43rd in 2004 to 18th in the world in 2024, trade balance from deficit in the period 2004-2011 to surplus in 2016-2024, trade openness (total import-export/GDP) 166% - 13th in the world and 2nd in ASEAN, average export growth 2004-2024: 15.9%, compared to the world's 6.4%, ASEAN's 7.9%. The shift in trade partners to FTA markets, of which exports always account for about 70% - in 2024, China accounts for 15%, the EU accounts for 13%, ASEAN accounts for 9%, South Korea accounts for 6%, Japan accounts for 6%..., increasing the deficit with long-standing FTA partners.
Regarding the impact of FTA on investment activities, attracting foreign investment to Vietnam in the period 2010-2024, from 4 billion USD in 2004 to 38 billion USD in 2024, average growth 2004-2023: 17.9%, compared to the world 8.2%, ASEAN 16.9%, from 53rd position in 20024 to 24th position globally in 2023 in attracting FDI. FTAs are said to have an impact on institutions and the business environment. The rate of using C/O form D (ATIGA) in Vietnam in recent years is about 40% compared to the ASEAN average of over 50%. Domestic value added in Vietnam's total exports decreased from 68.4% in 2007 to 49.4% in 2022 (according to ADB RIVA), Vietnam's domestic value added is much lower than many countries in the region.
Regarding the level of participation in the global value chain, forward linkage (an index showing Vietnam's ability to supply raw materials, components or intermediate products to other countries): Decreased from 7.6% in 2007 to 4.6% in 2022, Vietnam's role is not high in providing intermediate inputs for the global value chain because it mainly participates in the final production and assembly stages. According to the assessment, in the value chain, Vietnamese enterprises often participate in the production processing stage - the stage with the lowest added value, the linkage activities between domestic enterprises and FDI are still weak, accordingly, only about 100 Vietnamese enterprises are tier 1 suppliers, about 700 enterprises are tier 2 and tier 3 suppliers for multinational corporations in Vietnam.
Assess the reasons why the level of benefits of Vietnamese enterprises from FTAs ​​is still low, including: lack of information on commitments and implementation methods, inadequacies in the organization of implementation by state management agencies, the competitiveness of Vietnamese enterprises is still low compared to competitors, the application of rules of origin still faces many difficulties due to the complexity, at the same time, there are still commitments that are disadvantageous to Vietnamese enterprises, access to financial and credit packages is still difficult, shortage of domestic supply, difficulties in branding, lack of a connection system to support enterprises, the level of dependence on large markets is still quite high, while trade protectionism tends to increase strongly,... in addition, the response to new trends of international trade: supply chain shifts, sustainable development requirements, digital transformation and AI application... is still low in the system of enterprises nationwide. Although joining an FTA means tariff preferences, non-tariff measures are on the rise and are becoming major barriers to world trade.
According to data from the Ministry of Industry and Trade, agricultural products are currently one of Vietnam's key export sectors with export turnover continuously increasing, from 4.9 billion in 2006 to 28.9 billion in 2024 (accounting for 7.1% of the country's total exports). Vietnam's agricultural export products are very diverse, including vegetables and fruits (most - accounting for 24.7%), rice (19.6%), coffee (19.4%), cashew nuts (15%), rubber (11.8%), pepper (4.5%)... Notably, many products have affirmed their position on the world agricultural map, such as pepper, cashew nuts ranked first, coffee ranked second, rice ranked third in the world in 2024. FTAs ​​with strong tariff reduction commitments (up to nearly 100%) and geographical indication protection (EVFTA, UKVFTA) have contributed to promoting the export of many agricultural products of Vietnam, notably vegetables and fruits (increased from 259 million USD in 2006 to 7.1 billion USD - more than 27 times), rubber (increased from 110 million USD in 2006 to 3.4 billion USD in 2024 - 31 times), seeds (increased from 504 million USD in 2006 to 4.3 billion USD in 2024 – nearly 9 times)…

Awarding certificates of merit to provinces and cities with good achievements in implementing FTAs

Signing many FTAs ​​has helped Vietnam diversify its export markets, but our country is still heavily dependent on two main markets, China and the United States - accounting for about 30% and 10% of Vietnam's total agricultural export turnover in 2023, respectively. Some export products are quite dependent on the Chinese market, such as vegetables and fruits (China accounts for 65% of Vietnam's total vegetable and fruit export turnover in 2023), and rubber (China accounts for nearly 80%). However, many other agricultural products have diversified their export markets, such as coffee, tea, pepper, and cashews. In particular, with the signing of many more FTAs ​​with many development partners, in recent years Vietnam has increased its agricultural exports, especially vegetables and fruits, to the EU, UK, and Canadian markets. Specifically, in the period from 2019-2024, Vietnam's agricultural exports to the EU increased from 2.3 billion USD to 3.6 billion USD (fruits and vegetables alone increased from 148 million to 242 million), agricultural exports to the UK increased from 236 million USD to 338 million USD (fruits and vegetables increased from 8.5 million USD to 37.5 million USD), agricultural exports to Canada increased from 153 million USD to 235 million USD (of which fruit and vegetable exports increased from 25.9 million USD to 69.1 million USD) (General Statistics Office, General Department of Customs, 2025).
In the coming time, central and local state management agencies will continue to overcome and promote the dissemination of benefits that businesses can enjoy from FTAs, in which one of the shortcomings that needs to be overcome is that many businesses are still not really aware of the opportunities and challenges from FTAs, so they are still indifferent to participating in FTA dissemination and training activities, and are also not proactive in learning about commitments related to their business activities.
Regarding the reason why enterprises do not meet the conditions of origin, thereby not benefiting from tariff incentives, the majority of inputs for Vietnam's export production are imported from traditional partners in the region, especially China, Korea, and ASEAN. Therefore, with some FTAs ​​not including the above partners, to meet the agreement's rules of origin, enterprises need to increase the use of domestic inputs. Vietnam's supporting industry is underdeveloped, with limited supply and high prices, so the benefits from preferential tariffs of FTAs ​​often cannot offset the increased costs of using domestic supplies. The increasing shortage of domestic inputs makes Vietnam increasingly dependent on imported sources. Lack of self-sufficiency in raw materials will put export industries at great risk when there are fluctuations in the world market, causing the supply chain to break down.
In addition, businesses will find it difficult to meet the rules of origin to enjoy tariff preferences from some of Vietnam's FTAs, and thus miss out on the benefits from these FTAs ​​to increase competitiveness in the international market. In addition, Vietnam is currently the country with the highest costs related to export documents in the ASEAN region, which also reduces competitiveness compared to businesses in the region.

Dak Lak promotes EVFTA

In the agricultural sector, Vietnam has the strength to produce many products such as rice, coffee, cashew nuts, pepper, and tropical fruits, but exports are mainly in the form of raw materials or preliminary processing. Therefore, the added value is low and there is no separate brand in the foreign market. Some products have built domestic brands and sold abroad under their own brands, but because many businesses have not focused on protecting their brands abroad, they have been registered by foreign businesses first and have lost ownership of their brands. In addition, there are also many businesses that have built brands abroad but do not have a brand promotion strategy to reach more customers.
Currently, the Ministry of Industry and Trade is implementing the national brand program (Vietnam Value) to support businesses in building, promoting their brands and improving their competitiveness in the international market. However, although many brands have been recognized at the national level, the number of Vietnamese brands reaching international standards is still limited. This is because bringing national brands to the world requires a lot of effort. Businesses must conduct market research, understand consumer needs and identify distribution channels. Then, businesses need to invest in product design and processing to meet the requirements of foreign consumers. Next, they must widely promote their brands and connect with customers, convincing them to choose Vietnamese brands among many alternatives. All of these stages require significant resources, including know-how, technology and finance, posing challenges for many Vietnamese small and medium-sized enterprises.
Regarding international experience, some countries such as Korea have built FTA Support Center, which is a comprehensive portal to support businesses to intuitively access various information in the process of taking advantage of FTAs ​​and a one-stop agency providing support services for businesses. This portal provides overview contents such as full text of agreements, HS codes, customs clearance procedures, list of units certifying origin, tools to calculate tariff benefits, self-assessment of compliance with regulations on origin... The UK has rebuilt its international trade strategy and advisory agencies for implementing free trade agreements, in which, the establishment of the Department of Implementation of Free Trade Agreements aims to support small and medium enterprises to improve their understanding of the benefits brought by FTAs ​​and access to foreign partners, improve the capacity of officials in charge and advisors on FTAs.
For Vietnam, one of the lessons that needs to be applied is to strengthen the ability to connect with foreign partners and international systems that effectively support businesses in taking advantage of FTA agreements. Lack of market information and access to foreign partners are two of the biggest difficulties that businesses encounter when taking advantage of FTAs, which requires connection programs that can reach beyond the domestic scope and solve problems downstream of the supply chain, that is, accessing foreign partners and markets to support businesses. The UK model invests a lot of resources in trade promotion activities and capacity building so that businesses can be more proactive in approaching foreign partners, limiting the need for intermediary organizations. In the current context of international trade and the actual needs of domestic enterprises, the "linkage" factor must flexibly combine domestic linkage activities to produce goods that meet the standards and technical requirements of foreign markets and international linkage and cooperation activities to strengthen marketing and sales channels, diversify markets to make the best use of all markets that have FTAs ​​with us instead of being passive in traditional markets.
The FTA ecosystem model in the future, when applied and operated, aims to promote the process of comprehensively and effectively utilizing free trade agreements (FTAs), playing the role of an important support tool, helping to maximize the benefits that FTAs ​​bring. The FTA ecosystem brings many practical benefits to participating parties, including businesses, management agencies and supporting partners. Participating in the ecosystem not only helps optimize business operations but also promotes effective coordination between the public and private sectors, creating a favorable environment for the implementation of free trade agreements. This can be considered an important and comprehensive solution to simultaneously solve the above challenges to support businesses to effectively utilize the benefits that FTAs ​​bring.

Source: https://socongthuong.daklak.gov.vn/vi/news/hoat-dong-nganh-cong-thuong-34/nguyen-nhan-khien-mot-so-doanh-nghiep-viet-nam-chua-tan-dung-duoc-loi-ich-do-fta-mang-lai-5763.html