FTAs help accelerate economic restructuring

The 29th National Conference on Diplomacy, Hanoi, August 22-26

Addressing the 29th National Conference on Diplomacy that took place recently in Hanoi, Minister of Industry and Trade Tran Tuan Anh said Vietnam used to lag behind many other countries in terms of socioeconomic development, but thanks to its efforts to integrate into the global economy in multilateral, regional, and bilateral aspects, Vietnam had become one of the leading countries in terms of international integration. Important international commitments related to state-owned enterprises (SOEs), public procurement, and investment have created a motive to promote economic restructuring and institutional reforms in order to meet international standards. An additional 27 partner countries have recognized Vietnam’s market economy status over the last three years, raising total number of such countries to 64.

According to Minister Tran Tuan Anh, Vietnam has joined FTAs with most major economies such as the EU, the US, Japan, Russia, and China, helping the country to promote sustainable economic growth, trade and investment.

Vietnamese Ambassador to Russia Nguyen Thanh Son said the FTA between Vietnam and the Eurasian Economic Union (EEU) to take effect on October 5, 2016 would contribute to boosting trade and investment between Vietnam and EEU member countries, and restructuring bilateral imports and exports, especially between Vietnam and Russia. Experts believe this FTA will increase annual bilateral trade between Vietnam and EEU member countries from US$4 billion at present to US$8-10 billion in the next several years. EEU exporters will save about US$40 million of expenses in the first year and about US$60 million annually following the transitional period, while Vietnamese manufacturers will be able to save US$10 million per year. Moreover, the FTA will also allow Vietnam to import a wide range of industrial products from the EEU, reducing its dependence on imports from China, the Republic of Korea, and Japan.

As a member of the Trans-Pacific Partnership (TPP) agreement, Vietnam will open its economy wider to make it a genuine market economy of high competitiveness. The TPP will provide a legal framework for economies in the 21st century, taking Vietnam into a new playing field with the presence of large economies including the US. According to Vietnamese Ambassador to the US Pham Quang Vinh, the US currently is a major export market for Vietnamese products such as textiles and garments, footwear, wood products, and seafood. After the TPP takes effect, Vietnam can continue increasing economic and trade relations with the US, as well as improve the competitiveness of Vietnamese exports in comparison with products from other countries such as Sri Lanka and Bangladesh.

Promoting institutional reforms

Vietnam has achieved positive results from international economic integration in the recent period. However, the coming time will see substantial changes as Vietnam implements a number of new-generation FTAs, Minister Tran Tuan Anh said.

Commitments in terms of trade union, public procurement, and public investment require more institutional reforms. Therefore, administrative restructuring is crucial to ensuring the successful implementation of commitments in FTAs. Vietnam needs to take timely measures to ensure successful international economic integration in the new period.

Ministries and sectors need to provide businesses and localities with effective support including information about FTAs. It is necessary to internalize international commitments as soon as possible and promote trade and investment in markets with which Vietnam has signed or is negotiating FTAs, Minister Tran Tuan Anh said.

Nguyen Huong