As of 2022, Vietnam has negotiated, signed and implemented 17 FTAs, especially new generation ones. Notable highlights include the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), European-Vietnam Free Trade Agreement (EVFTA), UK-Vietnam FTA (UKVFTA); and the Regional Comprehensive Economic Partnership (RCEP).
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Strong growth momentum after signing FTAs
FTA is expected to stimulate the smooth flow of goods and help Vietnam expand its competitive advantage over other countries in Southeast Asia.
Among the FTA agreements that Vietnam has joined, AFTA, CPTPP and EVFTA are considered the most vital ones due to their tremendous impact on Vietnam’s economy and business environment.
Being the first country in Southeast Asia to join a bilateral trade agreement with the EU market has greatly made contribution to accelerating the shift of production activities to Vietnam.
According to a study by the Ministry of Planning and Investment, Vietnam’s exports to Europe after the EVFTA comes into effect are expected to grow by about 42.7% in 2025 and 44.37% in 2030 compared to in the absence of an agreement.
Meanwhile, the CPTPP is considered a high-quality FTA. CPTPP member countries form a huge market containing 500 million people, accounting for about 15% of total global trade. It tends to circulate Vietnam’s export goods to major countries in the world.
Such trade agreements will allow Vietnam to take advantage of tariff reductions, both within the ASEAN Economic Community (AEC) and with the EU and the US to attract export companies that produce in Vietnam and export to non-ASEAN partners.
Continue to exploit and proceed to negotiate new FTAs
In 2022, the Ministry of Industry and Trade will focus on implementing the FTAs that Vietnam has joined as well as signing new generation FTAs. Vietnam is currently negotiating the Vietnam-EFTA agreement and the Vietnam-Israel FTA.
While other pandemic variations are possible, Vietnam’s high vaccination rates will keep businesses open with the approach of “living with the virus”.