FTAs good for Vietnam: US expert
In the context of international integration, how to deal with opportunities and challenges arising thereafter remains an open question.
Truong Dinh Tuyen, former Minister of Commerce, said the free trade agreements (FTAs) with key partners such as Japan, the EU, and the US offer great opportunities to Vietnam.
When the Vietnam-Japan FTA was not signed, Vietnamese textile and garment products could not compete with those from China, he cited. However, since the agreement took effect in 2008, tax relief has made it possible for Vietnam’s exports to the East Asian country to increase constantly.
Regarding the current FTA negotiations with the EU , Tuyen said both Vietnam and the EU need mutual support and the signing of the agreement will help them supplement each other, not compete with each other.
For example, he said, milk imports from the EU will give Vietnamese consumers a better choice to compare with domestic products.
Deputy Minister of Industry and Trade Nguyen Thanh Bien said Vietnam has enjoyed preferential treatment since ASEAN and ASEAN+ countries agreed to allow the country to maintain its current tax rates in the 2011-2015 period and bring some of its products and services to their markets like other countries in the CLMV group such as Cambodia, Laos, and Myanmar.
According to Bien, international integration not only offers chances but also imposes challenges for Vietnam as the country will have to cut its tax rates and open its market after 2015 as it was committed to doing.
It is important to help domestic businesses prepare for equal competition after 2015, he said. This is the only way for Vietnam to prove itself.
Former Minister Tuyen said in the context of fast international integration, it is unsuitable for Vietnam to consider itself a CLMV country to benefit from tax preferences.
He also proposed encouraging Vietnamese businesses to gather their strength.
Dr. Vo Tri Thanh, Vice President of the Central Institute of Economic Management (CIEM) said during the negotiation process, many countries want to remove Vietnam from the CLMV group but the country, in fact, is still a poor country that needs preferential treatment.
Exporting in line with the value chain
Tuyen said there are challenges for Vietnam’s exports and imports.
He said if Vietnam fails to meet strict technical standards set by major partners including Japan, the EU, and the US, these countries will be likely to cut, or even ban imports of Vietnamese goods.
In many cases, locally-made products cannot penetrate foreign markets as they do not meet their technical requirements, he said, proposing that domestic businesses spare no effort to improve the quality of their products.
Meanwhile, Deputy Minister Bien said, Vietnam’s technical barriers are far too weaker than those put up by its partners in free trade areas and the WTO, in general.
Dr Thanh insisted that for a quick approach to the value chain, domestic businesses would rather export their products or materials via FDI enterprises in Vietnam. By this way, Thanh said, Vietnamese businesses can build up their brand names and reputation.