Trade promotion activities accelerate integration

Vietnam has signed FTAs with the Republic of Korea (RoK) and the Eurasian Economic Union (EEU) and is conducting negotiations with other major partners. How do you assess the opportunities for Vietnamese businesses?

Vietnam signed FTAs with the RoK on May 5, 2015 and the EEU which includes five countries of Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan on May 29, 2015. In addition to the establishment of the ASEAN Economic Community (AEC) by the end of this year, we are making greater efforts towards the conclusion of negotiations on the EU-Vietnam FTA. The Trans-Pacific Partnership (TPP) Agreement, the Regional Comprehensive Economic Partnership (RCEP) Agreement and an FTA with the European Free Trade Association including Switzerland, Norway, Iceland and Liechtenstein are on a move.

The signing of FTAs brings an important meaning, helping improve competitiveness of Vietnamese goods and services in export markets, especially in developing, large-scale and potential markets. Thanks to the commitments in terms of tariff reduction and non-tariff barrier elimination, Vietnamese goods and services will receive favorable conditions. In a context where international competition has become fiercer, accessing export markets freely will create a comparative advantage for Vietnamese businesses. In addition, transparent and stable business environment will also open up opportunities for cooperation and investment projects, contributing to strengthening production capacity and promoting the participation in the regional and global value chain. This is the strategic goal, creating the major premise for sustainable development with high economic efficiency for businesses and the Vietnamese economy.

Even in the domestic market, businesses facing and overcoming the challenges created by the FTAs also have an opportunity to innovate and improve competitiveness for the development goal.

What should Vietnamese businesses do to overcome the challenges?

Vietnamese businesses need to face the challenges with a calm behavior in order to seek the most efficient solutions. All the parties participating in the FTA negotiations want to protect their interests. Therefore, businesses will face competition pressure in the domestic market. However, we always ensure an open-market commitment at a given roadmap in order to help businesses gradually overcome the challenges. During the competition, the industries which do not have a comparative advantage will encounter many difficulties. Even less efficient firms will be dissolved or transferred to other sectors. This is the restructuring process to reallocate social resources.

Businesses need to understand the business environment and regulations of the law, especially the opportunities and challenges from FTAs and then adopt appropriate strategies to improve competitiveness through promoting investment, implementing technology innovation, persifying products, training human resource and expanding cooperation.

FTAs offer the opportunities for businesses. However, they need to make the most of the opportunities to realize their benefits.

What has the agency done to support Vietnamese businesses?

According to the directions of the government and the Ministry of Industry and Trade, the Vietnam Trade Promotion Agency in conjunction with local trade promotion agencies, associations and industries have deployed trade promotion activities in an effective manner to help businesses in different sectors and of different sizes improve their capacity, expand the domestic market and promote their exports.

A typical example is the National Trade Promotion Program with three main goals of export orientations, the domestic market and mountainous, border and island areas. According to statistics, the National Trade Promotion Program attracted the participation of more than 21,000 businesses during the 2010-2014 period. They have directly implemented transactions with sales of more than VND1 trillion and signed export contracts with a total value of nearly US$5.3 billion.

The Ministry of Industry and Trade has approved 212 national trade promotion projects with a total budget of VND100 billion this year. The approval has contributed to accelerating and improving effectiveness of national trade promotion projects.

The National Trade Promotion Program has positively and effectively supported businesses and units in agricultural product, foodstuff and seafood exports to major markets. In addition, the program has focused on promoting the export of several key categories of goods such as garments and textiles, leather and footwear, information technology, electronic ware, electronics, pharmaceuticals, furniture, handicrafts and steel.

Thanks to the National Trade Promotion Program, Vietnamese goods have been well-known in traditional markets like the US, the EU, China, Japan and the RoK. In addition, the program has supported Vietnamese goods to come back to Russia and Eastern Europe and strengthen their presence in Myanmar, Laos, the Middle East, Africa and Latin America.

Businesses have also actively participated in training courses in terms of trade promotion skills and product design in order to meet market demand and improve product value.

The Vietnam Trade Promotion Agency has paid special attention to improving capacity for local trade promotion agencies, while at the same time supporting small-sized businesses to join trade promotion activities at home and abroad.

In addition to trade promotion fairs and exhibitions, the agency has also helped businesses seek market information and build and develop their brand names through the Vietnam Value Program. The agency is driving towards the establishment of the Vietnam Value Forum with the aim of advertising the national image through goods and services.

Trade promotion publications including export news, networks to share trade promotion information between agencies, associations and businesses and encouraging the application of information technology in trade promotion activities have been strengthened.

The Ministry of Industry and Trade has devised management mechanisms and policies to encourage trade promotion activities.

In the coming time trade promotion activities will focus on supporting businesses to take the most of the opportunities from FTAs, promoting exports to partner markets, helping businesses develop their brand names and improving the added value of each and every product towards higher and sustainable exports.