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Vietnam’s free trade agreements boost exports-imports in first quarter

Rosemary Nguyen Rosemary Nguyen

khanhduong.vns@gmail.com

May 24, 2021 | 09:27

Vietnam’s exports and imports rose over 24 percent year-on-year in the first quarter, driven by the country’s free trade agreements (FTAs), said Associate Professor Pham Tat Thang, a former official at the Ministry of Industry and Trade.

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Vietnam’s free trade agreements boost exports-imports in first quarter
After the EU-Vietnam FTA (EVFTA) took effect in August 2020, shipments to the bloc have headed upwards and rose 18 percent in January-March this year. Photo Tien Phong

Thang, who worked at Vietnam Institute of Industrial and Trade Policy and Strategy, said exports surged 22 percent and imports 26.3 percent, with the country posting a trade surplus estimated at more than 2 billion USD.

“The figures reveal the strong recovery seen in production and trade in the country despite Covid-19 here and around the world,” he said.

“After the EU-Vietnam FTA (EVFTA) took effect in August 2020, shipments to the bloc have headed upwards and rose 18 percent in January-March this year,” he added.

Exports to members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) also grew substantially during the period, including to Canada, up 13.7 percent, Australia 17 percent, Chile 25.6 percent, Mexico 12.7 percent, and New Zealand 35.1 percent.

Thang commented that these agreements will continue to act as an important “leverage” for Vietnam’s exports into the future.

Though instances of protectionism have emerged around the world in recent years, Vietnam still insists on opening up its economy, with 16 FTAs having been signed, he said.

With the signing of the EVFTA and the CPTPP, large volumes of Vietnamese rice, shrimp, aquatic products, and vegetables have been sent to member markets, Thang added.

Vietnam’s free trade agreements boost exports-imports in first quarter
The free trade agreements will continue to act as an important “leverage” for Vietnam’s exports into the future. Photo VOV

Vietnam has signed 16 FTAs including important ones such as EVFTA, CPTPP, UK-Vietnam Free Trade Agreement (UKVFTA) and Regional Comprehensive Economic Partnership (RCEP).

The EVFTA which was signed on June 30, 2019 is expected to ensure the balance of benefits for both Vietnam and the EU.

Coming into effect in August 2029, EVFTA boosted Vietnamese exports, especially agriculture and aquaculture and other products in which Vietnam has its comparative advantages.

CPTPP came into force in January 2019. With comprehensive commitments, high standards and balances, the CPTPP would help strengthen mutually beneficial links among member economies and boost trade, investment and economic growth in Asia Pacific.

Vietnam’s free trade agreements boost exports-imports in first quarter
The signing ceremony for the Europe-Vietnam Free Trade Agreement (EVFTA) on June 30, 2019. Photo VNA

According to calculations by the National Centre for Socio-Economic Information and Forecasting under the Ministry of Planning and Investment, the CPTPP would boost Việt Nam’s GDP by US$1.7 billion and exports by more than $4 billion by 2035, up 1.32 per cent and 4.04 per cent respectively.

In the latest move, Prime Minister Pham Minh Chinh last week approved the action plan to realize the UKVFTA.

The UKVFTA was signed on December 29, 2020 in the UK and become effective on May 1, 2021.

Under the UKFTA commitments, six years since the coming into effect of the deal, the UK will remove tariffs for 99.2 percent of goods imported from Vietnam, or 99.7 percent of Vietnam’s exports to the country.

Meanwhile, Vietnam will immediately remove tariff for 48.5 percent of goods from UK, or 64.5 percent of import volume. The figure is set to rise to 91.8 percent or 97.1 percent of UK exports to Vietnam in six years.

Vietnam is expected to have more opportunities in attracting investment capital, technology transfer, and tourists from the UK once the Covid-19 is contained. In return, UK enterprises and products would have an open access to a market with 100 million people./.

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