Up to now, Vietnam has signed, implemented and is negotiating about 16 Free Trade Agreements (FTAs). Economic experts said that the FTAs affecting Vietnam's economy are Vietnam-Korea FTA, Vietnam-Japan FTA and the EU FTA.
Of the 16 FTAs which have beensigned, being implemented and under negotiation, 10 FTAs have been signed and being executed, 2 have been negotiated and 4 are under negotiation. Of the 10 FTAs signed and being implemented, 6 FTAs have been signed as an ASEAN member; 4 FTAs signed independently with Chile, Japan, Korea, and Eurasian Economic Union.
Garment is the main export item of Dong Nai to Japaneseand Korean markets.
* Export turnover increases
In fact, the new generation of FTA with Japan and Korea brings about many advantages for enterprises nationwide. In Dong Nai, since the FTA with Korea and Japan went into effect, exports to these countries have increased. Businesses began to reduce their reliance on the Chinese market for importing raw materials and gradually switch to Korea. Specifically, in 2016, the province's export turnover to Japan was over $ 1.5 billion, up nearly 11% over the previous year and is the second largest export market of Dong Nai. Export to Korea in 2016 also reached nearly $ 900 million, up nearly 20% over the previous year. For the last two years, businesses in the province haveprioritized to exploit these two markets to enjoy tax incentives.
Mr. Pham Van Chau, Head of General Director Office of Mabuchi Motor Vietnam Co., Ltd in Bien Hoa Industrial Zone 2 (Bien Hoa City), said: "Vietnam-Japan FTA is very convenient for businesses in terms of import and export of goods into Japan. Approximately 50% of the company's products exported to Japan are entitled to preferential incentives, helping to improve competitiveness, so production also increases 13% per year. "According to Mr. Chau, the company exports 35-45 million engines and electronic products per month (equivalent to over $ 20 million) to many markets, including Japan, Europe and the United States. Besides increasing volume of exports to Japan, the the company also targets at European market to enjoy a 0% tax ratewhen the EU-Vietnam FTA is signed. To take advantage of tax benefits, Mabuchi Motor Vietnam Co., Ltd. also expanded its production of raw materials to meet its own requirements, reducing imports from the Chinese market.
"Countries which Vietnam has signed FTAs with are highly regarded by businesses when planning to expand their markets into these countries. Before the ASEAN Economic Community was officially established, the company had expanded its exports to Thailand. The company is looking for ways to bring stainless steel spoons andknives to Japan, South Korea and increase export to EU "- Ms. Pham Thi Ngoc Bich, Import Export Manager of Posco VST Co. Ltd. inNhonTrachIndustrial Zone 1 (NhonTrach district), expressed.
* Attracting investors
FTAs between Vietnam and Korea and Japan have alsoopened up great opportunities in attracting investment from these two countries into Vietnam. According to the data from the Foreign Investment Agency (Ministry of Planning and Investment), South Korea and Japan have poured nearly $ 90 billion in investment capital into Vietnam (in which over $ 49 billion is from Korea and $ 40 billion from Japan). For the past three years, the investment of Korea and Japan in Dong Nai has increased rapidly. In 2016, Korea overtook Taiwanto become the leader in terms of investment in the province with a total capital of more than 5.3 billion dollars and Japan ranked third with nearly 3.9 billion dollars. The number ofenterprises investing in the province from those two countriesis growing very fast to take advantage of the FTAs they have signed.
Mr. ShiroMuramoto, Member of the Hyogo Economic Development Board (Japan), said: "After Vietnam-Japan FTA was signed and Vietnam-EU FTA has been negotiated, many enterprises from Hyogo seek the information to invest in Vietnam. Dong Nai is the destination that many businesses from Hyogo pay most attention to because of convenient road infrastructure, water and air traffic." In addition, new generation FTAs include includingFTAsbetween Vietnam – EUand the ASEAN Economic Community have attracted investors from nearly 40 other countries to Vietnam. "Ukrainian businesses are quite strong in the fields of industry, infrastructure investment and are studying policies to invest in Dong Nai," said Mr. ShovkopliasOleksiyVolodymyrovych, Ambassador Extraordinary and Plenipotentiary of Ukraine to Vietnam. As the Trans-Pacific Partnership (TPP) agreement is discontinued, businesses still expect the EU-Vietnam FTA to come into effect in 2018.
