Need to maximize incentives from FTAs

Workers work at the Bowker Vietnam Garment Company Limited factory (Dong An 1 Industrial Park, Thuan An City, Binh Duong Province). Illustrative photo - VNA

Dong Nai is assessed by the Ministry of Industry and Trade as one of the leading provinces in exploiting the advantages of FTAs ​​to expand exports and attract foreign investment. Many enterprises in Dong Nai have focused on finding raw materials domestically and in member countries of the agreements to enjoy a tax rate of 0% or gradually decreasing to 0% according to a roadmap of 3-5 years. Therefore, the province's annual exports have grown quite well and the trade surplus has also increased.

However, enterprises in Dong Nai also face difficulties like enterprises nationwide, which are input materials for many key manufacturing industries such as footwear, textiles, computers and electronic components, and iron and steel, mostly imported from China. Meanwhile, exports to the European Union increasingly require high requirements on the origin and provenance of raw materials.

Therefore, in the long term, if businesses in Vietnam want to export sustainably and enjoy tariff incentives when exporting goods to countries with common FTAs, they must link up to form a domestic raw material production chain. Specifically, supporting industries for large manufacturing industries must develop rapidly to proactively source 60-70% of raw materials. In addition, businesses should expand the raw material import market to avoid focusing on the Chinese market, which is very risky, especially during the period when the US is increasing taxes on many imported goods from China and other countries.

According to business associations, to develop domestic supporting industries, the Government needs to have more attractive policies to encourage and attract investment in this field. For example: tax exemption and reduction for a long time; lending capital with low interest rates and easy access to capital; connecting and promoting trade to form a supply chain of input products for each other...

According to economic experts, businesses should study each Vietnamese market that has signed an FTA to produce goods according to the needs of consumers in that country. Many countries have FTAs ​​with Vietnam but businesses are not interested. For example, with EVFTA, there are 27 countries, but currently businesses only focus on exporting to about 6-7 countries in the bloc, while the number of exported goods to the other 20 countries is still very small.

Khanh Minh

Source: https://baodongnai.com.vn/kinh-te/202504/can-khai-thac-toi-da-uu-dai-tu-cac-fta-d330359/