10:32 | 06/05/2016 Industry
(VEN) - When compared to previous agreements, new-generation FTAs such as the Trans-Pacific Partnership and the EU-Vietnam Free Trade Agreement include deeper trade liberalization, wider commitment scale, many institutional commitments and particularly large partners like the US, the EU and Japan.
Support industries need to catch up opportunities provided by new-generation FTAs
Vietnam Institute of Economics Deputy Director Le Xuan Sang when addressing a recent forum on developing Vietnam’s support industries in the context of new-generation free trade agreements (FTAs), said that support industries should be offered more opportunities to help with their development.
Le Xuan Sang said that large capital and high-quality human resources were two key factors leading to the development of Vietnam’s support industries. Domestic support industry businesses have mainly manufactured products such as plastic boxes, metal parts, molds and packaging, while engineering spare parts, plastic gears, transistors and capacitors often remain beyond their abilities. However export markets will be expanded thanks to the signing of new-generation FTAs, creating more opportunities for businesses to participate in the global supply chain.
Sang also said that support industries would be provided with more opportunities to strongly develop. New-generation FTAs will be a foundation to promote exports, thereby demand for raw materials for production will be high, creating major premise for support industry businesses to expand their scale. In addition, new-generation FTAs will contribute to creating a fair and healthy business environment.
Providing support for businesses
The government has issued many preferential mechanisms and policies for support industry businesses such as corporate income tax exemptions for the first four years, a 50 percent reduction for the next nine years, tax exemptions for imported goods to create fixed assets and materials and equipment to implement investment projects. In particular, Decree 111/2015/ND has allowed investors to enjoy 50 percent of pilot production budget in research and development activities.
Although the legal framework has been better, the implementation of preferential mechanisms and policies has been unsatisfactory.
Tri Cuong Industrial Co., Ltd. Director Le Thanh Thuy said that small and medium-sized enterprises have not invested in projects in the long term due to lack of stable production ground and have faced difficulties in buying machinery and equipment because of a lack of capital.
4P Company General Director Hoang Minh Tri said that to help support industries develop and participate in the global supply chain, businesses needed to implement factors such as standardization, good services, delivery on time, competitive prices and improved product quality, while the state needed to ensure a fair business environment between FDI and domestic businesses.