FTAs to help local exports to near $400 billion in 2022

Monday, Jul 25, 2022 18:04

Thai Binh Province's Tan De Garment, with 10 factories and more than 18,000 workers produce items for export. FTAs are expected to help Viet Nam reach a milestone of US$400 billion this year. — Photo courtesy of the firm

As production has recovered, and local businesses can meet orders and effectively take advantage of FTAs, experts expected local exports to reach a milestone of US$400 billion this year.

In the first half, total export turnover reached nearly $186 billion, an increase of 17.3 per cent compared to the same period in 2021 with 28 items reaching over $1 billion.

Along with that, many electronics enterprises, textiles, garment, footwear and other industries continuously received good news with tight export orders by the end of the fourth quarter of 2022 and also into 2023.

Many experts considered the results as a strong example of utilising free trade agreements in many key export industries.

Except for China, which is implementing a "zero-COVID" policy, where exports to this market only increased by 7.2 per cent, the remaining markets with FTAs ​​increased by double digits.

After nearly two years of implementing the Vietnam - EU Free Trade Agreement, Vietnamese exports to the EU have achieved more than expected results with a turnover of $23 billion, up 22 per cent.

The ASEAN market reached $17.7 billion, up 27.4 per cent; the South Korean market reached $12.2 billion, up 18.5 per cent; and the Japanese market reached $11.48 billion, up 13.9 per cent.

MoIT also said the market of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) reached more than $20 billion, an increase of nearly 10 per cent.

Nguyen Thi Thuy Hien, deputy director of MoIT’s Planning Department, said: “Businesses have made good use of FTAs, especially new-generation FTAs, to promote exports. Along with that, tariff preferences under these FTAs ​​have also increased."

"The rate of granting sample C/Os under CPTPP reached $1.32 billion, up 22.1 per cent over the same period in 2021. The issuance of C/O form EUR.1 to the EU reached $5.84 billion, up 32.1 per cent over the same period."

Industry experts said 15 bilateral and multilateral FTAs ​​that the country has signed have been put into effect and two FTAs ​​under negotiation have created an important "leverage" for Vietnamese goods to reach targets for 2022.

They said the results will continue to prosper thanks to the recovery of the world economy and FTAs signed and fully implemented.

At the conference to review the activities of the first half, Trade Minister Nguyen Hong Dien said: “The total import-export turnover may exceed $700 billion; exports will reach nearly$ 400 billion and the country will continue to be in the top 20 countries with large international trade.

"The FTAs ​continue to create an effective launch pad for exports.”

He said that the FTAs created more channels to import better raw materials thanks to preferential tariffs, adding that since the beginning of this year, the Regional Comprehensive Economic Partnership (RCEP) took effect, creating the largest free trade bloc in the world, a market with 2.2 billion consumers and a total GDP of $26.2 trillion, accounting for 30 per cent of global GDP, creating positive effect on exports and regional supply chains.

With the advantage of harmonising rules of origin, Viet Nam will have the opportunity to diversify input materials and establish a stable long-term export market, he said.

According to Standard Chartered Bank's assessment, becoming a member of RCEP continued to strengthen Viet Nam's commercial position and contributed to the post-pandemic recovery. The EVFTA created a very significant effect on exports, initially promoting the effectiveness of a substantive agreement with great expectations.

In addition to electronics, components, textiles and footwear, agriculture is also considered to have high growth prospects to the EU thanks to the advantage of EVFTA, with the tax reduced to 0 per cent.

Janusz Wojciechowski, High Commissioner for Agriculture of the European Commission (EC), during a visit to Viet Nam from July 10 to 13, affirmed that agricultural exports to the EU would far exceed the level of implementation in 2021 and may increase in the near future when agricultural cooperation between the two sides became closer.

Overall, exports to the EU in 2022 can reach nearly $50 billion, if the last 6 months of the year can maintain a growth rate of over 20 per cent. The trade surplus to the EU was expected to exceed the figure of $23.23 billion.

Experts said FTAs, especially new-generation FTAs ​​such as the EVFTA and CPTPP, would continue to open tax incentives, creating incentives to attract investment to increase production and helping export businesses become more professional in the international arena.

As a result, exports are expected to be the bright spot of the economy, ensuring jobs for workers and helping the country to participate more deeply in the global supply chain. — VNS

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