Vietnam raked in US$29.69 billion from exports in the first quarter of this year, a year-on-year increase of 19.7 percent.
Experts attributed the impressive growth to the positive impact of a range of FTAs that Vietnam has signed with countries and organisations over the years. Notably, they said businesses made full use of preference deals in FTAs to sharpen their competitive edge against other international suppliers.
Vietnam has so far signed eight FTAs with countries that account for 25 percent of total global consumption.
|FTAs help boost Vietnamese exports
Tran Thanh Hai, deputy head of the Import-Export Department under the Ministry of Industry and Trade, said FTAs play an important role in boosting Vietnamese exports as they help increase the competitive capacity of Vietnamese products in big export markets.
The increase in FTAs is of great significance, given the fact that low labour costs and abundant natural resources are no longer Vietnam’s chief competitive advantage, he said.
Undoubtedly, the reduction and/or removal of tariff and non-tariff barriers makes it easier for Vietnam to penetrate the markets of FTA signatories and their dialogue partners.
When there is a boom in bilateral and multilateral FTA signings, Vietnam will be caught lagging behind unless it accelerates FTA negotiations, Hai warned.
However, experts said Vietnamese businesses fail to capitalise on the opening of markets that FTAs bring about, saying many neither understand nor pay due attention to tariff preferences, thus reducing their competitiveness overseas.
They also fail to keep abreast of annual updates on tariff cuts that Vietnam has committed to in many FTAs.
In addition, Vietnam has yet to develop a powerful support industry capable of supplying all input materials which are currently imported in large quantities.
To this end, the Ministry of Industry and Trade is speeding up the negotiation of FTAs, considering it a key solution for increasing exports from now until 2020.
It is also introducing incentives to encourage investment in support industries with the aim of raising the proportion of domestically produced product.