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Why Vietnam’s Free Trade Agreements Will Play an Important Role in 2022

03/03/2022

Vietnam’s free trade agreements, along with the recent Regional Comprehensive Economic Partnership (RCEP) are expected to play a major role in helping Vietnam’s economic growth this year. As Vietnam further opens up its borders for international travel, the government wants to ensure that the country returns to its pre-pandemic growth. Vietnam’s FTAs and other bilateral agreements are likely to aid and play a significant role in the medium to long term.

New generation FTAs

While Vietnam is one of the countries with several FTAs, most recently it has signed new generation FTAs such as the  Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), EU-Vietnam FTA (EVFTA), UK-Vietnam FTA (UKVFTA), and most recently the RCEP. While these agreements will not only help Vietnam advance its economy and production network, it will also help the country conform to labor standards while modernizing labor laws and industrial relation systems. While the government will continuously need to work on reforms, being part of such agreements gives an impetus.

As per the Ministry of Industry and Trade (MoIT), the EVFTA, itself has helped Vietnam’s exports despite the pandemic. In addition, more than 200,000 certificates of origin were issued in 2021 for Vietnamese exports worth US$7.8 billion. In 2021, the UKVFTA helped boost trade between Vietnam and the UK reaching close to US$6.6 billion. Similar increases were also noted with CPTPP with exports to Canada and Mexico increasing.

Investors can also access the ASEAN Framework Agreement on Services (AFAS). This agreement comprising of ASEAN countries and liberalizes trade in several industries such as education, sanitation, hospital services, and tourism.

Nevertheless, businesses should ensure that they are making use of Vietnam’s FTAs which can no doubt be complex to implement. However, the cost savings can be significant given the reduction in tariffs depending on the various markets. Businesses should especially pay attention to rules of origin, technical and hygiene standards, labeling requirements, import-export regulations as well as brand guidelines.

Government support and high growth industries

The MoIT has further stated that it will look at efforts to implement the current FTAs and plan for new ones which ensure a stable market for Vietnam. Some steps that the MoIT has outlined for 2022 include:

  • Work with relevant agencies on infrastructure, strengthen connectivity and reduce logistic costs;
  • Work with border provinces to ease customs procedures for the import and export of goods;
  • Ease challenges in seaport infrastructure;
  • Raise awareness on key market developments and niche markets;
  • Facilitate digital transformation and application of IT; and
  • Propose trade remedies to protect the interest of domestic industries.

Vietnam is currently negotiating the Vietnam-EFTA agreement, which involves Vietnam and the EFTA (Switzerland, Norway, Iceland, and Liechtenstein), and Vietnam-Israel FTA.

Businesses can further look at which industries can benefit from FTAs, and tailor their production according to current demand and trends. For example, in January 2021, Vietnamese exports were valued at US$29 billion increasing 1.5 percent over the same period last year. Out of this, seven commodity groups, earned over US$1billlion each accounting for a total of 63.3 percent for total export turnover as per the MoIT. Some of these commodity groups were:

  • Phones and components US$4 billion;
  • Computers, electronic products, and components (US$3.5 billion);
  • Textiles and garments (US3.3 billion); and
  • Agro, forestry, and fisheries (US$2.67 billion).

2022 important year for economic growth

This year will be important for Vietnam as it looks to bounce back to pre-pandemic growth levels after strict lockdowns and production stoppages. Businesses that were drastically affected last year are also eager to increase trade and revenues as they look to limit losses from last year.

Therefore, FTAs will play an increasing role in the country’s economic growth as businesses look to bounce back. The government is keen to promote FTAs and as mentioned earlier has outlined steps to help businesses make use of such agreements. Nevertheless, there will be challenges; sea freight rates remain high as containers are limited affecting global supply chains. This has also resulted in increased costs in raw materials as well as higher delivery times. Complex administrative procedures, customs delays, and infrastructure are also factors that have hindered businesses from making use of FTAs.

Nevertheless, investors are ready to expand business coverage and Vietnam’s government has realized this outlook and provided investor-friendly policies aimed at attracting investment to promote strong economic development. While further pandemic variants are possible, Vietnam’s high vaccination rate will help keep businesses open; the government has reiterated its plans to keep factories open with a ‘live with the virus’ approach.

Source: Vietnam-briefing.com

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    MTA VIETNAM

    Tham Gia Giờ Trái Đất Cùng MTA Vietnam Để Chung Tay Kiến Tạo Tương Lai
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    Là một phong trào môi trường có quy mô lớn nhất thế giới, Giờ Trái Đất đã tạo nguồn cảm hứng và thúc đẩy các cá nhân, cộng đồng, doanh nghiệp và tổ chức trên 190 quốc gia và vùng lãnh thổ hành động vì biến đổi khí hậu và mất môi trường tự nhiên. Đây cũng là sự kiện thuộc chuỗi phát triển bền vững từ Informa Markets với mong muốn tương tự. Hãy cùng MTA Vietnam tắt đèn từ 20:30-21:30 tối nay, thứ Bảy ngày 26/03/2022 và lắng nghe thông điệp hành động từ WWF toàn cầu trong Giờ Trái Đất 2022 nhé!
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    As the world's largest environmental movement, Earth Hour has inspired and motivated individuals, communities, businesses and organizations in 190 countries and territories to take action for climate change and loss of natural environment. This is also an event in the sustainable development chain from Informa Markets with the same desire. Let's turn off the lights with MTA Vietnam from 20:30-21:30 tonight, Saturday, 26/03/2022 and listen to the message from WWF during Earth Hour 2022!

    #earthhour #MTAVietnam #MTAHanoi #Manufacturing #Engineeering #MTAVietnamserries #MTAVietnamGoesHybrid #ManufacturingIndustry #MTAVietnam2022
    ...

    Tham Gia Giờ Trái Đất Cùng MTA Vietnam Để Chung Tay Kiến Tạo Tương Lai
[English below]
Là một phong trào môi trường có quy mô lớn nhất thế giới, Giờ Trái Đất đã tạo nguồn cảm hứng và thúc đẩy các cá nhân, cộng đồng, doanh nghiệp và tổ chức trên 190 quốc gia và vùng lãnh thổ hành động vì biến đổi khí hậu và mất môi trường tự nhiên. Đây cũng là sự kiện thuộc chuỗi phát triển bền vững từ Informa Markets với mong muốn tương tự. Hãy cùng MTA Vietnam tắt đèn từ 20:30-21:30 tối nay, thứ Bảy ngày 26/03/2022 và lắng nghe thông điệp hành động từ WWF toàn cầu trong Giờ Trái Đất 2022 nhé!
---------------------//
Join Earth Hour with MTA Vietnam To Shape Our Future

As the worlds largest environmental movement, Earth Hour has inspired and motivated individuals, communities, businesses and organizations in 190 countries and territories to take action for climate change and loss of natural environment. This is also an event in the sustainable development chain from Informa Markets with the same desire. Lets turn off the lights with MTA Vietnam from 20:30-21:30 tonight, Saturday, 26/03/2022 and listen to the message from WWF during Earth Hour 2022!

#earthhour #MTAVietnam #MTAHanoi  #Manufacturing #Engineeering #MTAVietnamserries #MTAVietnamGoesHybrid #ManufacturingIndustry #MTAVietnam2022
    3 months ago
    MTA VIETNAM

    MTA Vietnam 2022 Is Ready To Welcome The Return Of Our Exhibitors
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    With the latest news of ZERO QUARANTINE for international travelers entering Vietnam, MTA Vietnam 2022 is ready to welcome all of the international exhibiting companies to this year's exhibition at SECC, District 7, Ho Chi Minh City, Vietnam from 06-09/07/2022. MTA Vietnam is the leading prestigious exhibition of the engineering and manufacturing industry in Vietnam with a lot of experiences from organization to marketing promotion, promising in this return, MTA Vietnam will bring up many surprises to the community in and out of the country. Contact us to BOOK YOUR STAND NOW!
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    MTA Vietnam 2022 Đã Sẵn Sàng Chào Đón Sự Trở Lại Của Các Nhà Trưng Bày

    Với những tin tức mới nhất về việc KHỒNG CẦN CÁCH LY đối với người nhập cảnh, MTA Vietnam 2022 đã sẵn sàng để chào đón các đơn vị trưng bày quốc tế đến với triển lãm năm nay tại SECC, Quận 7, tp. Hồ Chí Minh, Việt Nam từ 06-09/07/2022. MTA Vietnam là triển lãm uy tín hàng đầu trong ngành cơ khí chế tạo tại Việt Nam với nhiều kinh nghiệm từ khâu tổ chức đến quảng bá, tin chắc rằng sự trở lại lần này của MTA Vietnam sẽ làm cho cộng đồng cơ khí chế tạo trong và ngoài nước không khỏi bất ngờ. Liên hệ với chúng tôi để ĐĂNG KÝ GIAN HÀNG NGAY HÔM NAY!

    MTA Vietnam 2022
    ⏰ 06-09.07.2022
    📍 Trung tâm Hội chợ Triển lãm Sài Gòn - SECC, 799 Nguyễn Văn Linh, Quận 7, Tp. Hồ Chí Minh, Việt Nam
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    📩 [email protected]

    #MTAVietnam #MTAHanoi #Manufacturing #Engineeering #MTAVietnamserries #MTAVietnamGoesHybrid #ManufacturingIndustry #MTAVietnam2022
    ...

    MTA Vietnam 2022 Is Ready To Welcome The Return Of Our Exhibitors
[Vietnamese below]
With the latest news of ZERO QUARANTINE for international travelers entering Vietnam, MTA Vietnam 2022 is ready to welcome all of the international exhibiting companies to this years exhibition at SECC, District 7, Ho Chi Minh City, Vietnam from 06-09/07/2022. MTA Vietnam is the leading prestigious exhibition of the engineering and manufacturing industry in Vietnam with a lot of experiences from organization to marketing promotion, promising in this return, MTA Vietnam will bring up many surprises to the community in and out of the country. Contact us to BOOK YOUR STAND NOW!
----------//
MTA Vietnam 2022 Đã Sẵn Sàng Chào Đón Sự Trở Lại Của Các Nhà Trưng Bày

Với những tin tức mới nhất về việc KHỒNG CẦN CÁCH LY đối với người nhập cảnh, MTA Vietnam 2022 đã sẵn sàng để chào đón các đơn vị trưng bày quốc tế đến với triển lãm năm nay tại SECC, Quận 7, tp. Hồ Chí Minh, Việt Nam từ 06-09/07/2022. MTA Vietnam là triển lãm uy tín hàng đầu trong ngành cơ khí chế tạo tại Việt Nam với nhiều kinh nghiệm từ khâu tổ chức đến quảng bá, tin chắc rằng sự trở lại lần này của MTA Vietnam sẽ làm cho cộng đồng cơ khí chế tạo trong và ngoài nước không khỏi bất ngờ. Liên hệ với chúng tôi để ĐĂNG KÝ GIAN HÀNG NGAY HÔM NAY!

MTA Vietnam 2022
⏰ 06-09.07.2022
📍 Trung tâm Hội chợ Triển lãm Sài Gòn - SECC, 799 Nguyễn Văn Linh, Quận 7, Tp. Hồ Chí Minh, Việt Nam
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#MTAVietnam #MTAHanoi  #Manufacturing #Engineeering #MTAVietnamserries #MTAVietnamGoesHybrid #ManufacturingIndustry #MTAVietnam2022
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