Vietnam is a country participating in rapid deep integration with many free trade agreements (FTAs) that have been signed. In which, there are many important agreements such as: CPTPP, EVFTA, RCEP. FTAs have come into effect, tariff lines have been gradually reduced to 0%. Enterprises who want to enjoy incentives must have appropriate short-term and long-term plans.
Vietnam's export turnover in recent years has grown by 10-20% each year. In particular, in the past 2 years, which was heavily affected by the Covid-19 pandemic, Vietnam's export turnover still kept a high increase. The above results are obtained because many enterprises have made good preparation for entering the markets that Vietnam has signed FTAs with.
Producing machinery components for export at
Vietnam Kaneko Co., Ltd. in Nhon Trach 3 Industrial Zone, Phase 2, Nhon
Trach District.
Leverage to support the economic recovery
In 2021, Dong Nai is one of the four provinces and cities most heavily hit by the Covid-19 epidemic, but export turnover still reaches US$21.8 billion, up 16% over the previous year. The above results were achieved thanks to enterprises' timely recovery of production and expansion of exports to countries that Vietnam has signed FTAs with. Businesses that enjoy the incentives from the FTA have prepared many years ago. However, FDI enterprises are quick to meet the provisions of the agreement to enjoy more tax advantages than domestic-invested enterprises.
Mr. Wu Ming Ying, President of the Taiwan Chamber of Commerce in Dong Nai said: "The Covid-19 pandemic has caused heavy damage to the world economy. In order to survive and well develop, the enterprises have to re-evaluate production and business plans in the short and long term, exploiting advantages from the FTAs that Vietnam has signed to maintain and expand the consumption market. Taiwanese businesses in Dong Nai are closely monitoring the agreements Vietnam is negotiating to learn and prepare requirements so that when the agreement comes into effect, they can enjoy preferential tax policies.
According to many businesses in the province, the CPTPP, EVFTA, Vietnam-Japan FTA, etc. are the salvation for exports during the pandemic. Although there are fluctuations in exporting goods to these markets, enterprises still retain their market share and gradually expand the market.
Ms. Delphine Rousselet, Executive Director at EuroCham Vietnam commented: “EVFTA has opened up cooperation opportunities for Vietnamese enterprises with EU partners; despite the pandemic, the export into the EU is still increasing. Because after the agreement came into effect, many tax lines were immediately reduced to 0%. It is expected that in the coming years, Vietnam's exports to the EU will continue to increase.
FTAs have not yet been well capitalized on
According to the Ministry of Industry and Trade, by the end of 2021, the proportion of enterprises enjoying preferential treatment on certificates of origin will reach about 40% of the total export turnover to markets where Vietnam has signed FTAs. This proves that Vietnam has not fully taken advantages of trade in goods. Enterprises have not focused on exploiting all markets with FTAs. Specifically, in the EVFTA, there are 27 countries, but businesses only focus on exploiting 5-6 countries; In the CPTPP, many markets of member countries are not well exploited.
Mr. Ngo Chung Khanh, Deputy Director of the Multilateral Trade Policy Department, Ministry of Industry and Trade, said: “When FTAs are signed, businesses must pay attention to regulations to enjoy incentives, and at the same time must focus on advantageous products to boost exports. To do this, enterprises must be well-prepared, in their production and business plans, from purchasing input materials for production to the production process, they must fully meet the regulations of each FTA market intend to open for the goods consumption. According to Mr. Khanh, many Vietnamese markets that have signed FTAs require very high standards of goods. To export and enjoy incentives, they must meet the criteria. Therefore, enterprises must upgrade their products to match the requirements, overcome difficulties, and enterprises will have large, stable orders for a long time.
Consumers in many countries are increasingly demanding on the quality, design and convenience of goods. Especially for organic and environmentally friendly products, consumers are willing to spend an extra amount of money to buy these items. Therefore, from production and processing, enterprises must pay attention to the above trends to actively develop appropriate plans.
Vi Quan
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