Deputy Prime Minister Tran Hong Ha affirmed that the State must play a leading role in the process of negotiating international economic integration combined with implementing global goals - Photo: VGP
Deputy Prime Minister Tran Hong Ha emphasized that the economy is an extremely important pillar, a pioneer in international integration activities. The Steering Committee is interdisciplinary with the participation of ministries, sectors and major cities, so it is necessary to create close links to promote international economic integration activities with the comprehensive participation of economic sectors.
The Deputy Prime Minister requested members of the Steering Committee to comprehensively assess Vietnam's participation in free trade agreements (FTAs), especially the competitiveness of domestic enterprises; analyze policies on international economic integration in the face of rapid and unpredictable changes and fluctuations in the economic context and global value chains; and the crisis in economic models in the world...
"The Steering Committee also needs to come up with a flexible operating mechanism and respond promptly to emerging issues based on proposals and findings of Steering Committee members," said the Deputy Prime Minister.
FTA is a great driving force for the economy
According to the report of the Ministry of Industry and Trade, the standing agency of the Steering Committee, in recent times, international economic integration has achieved many important results such as contributing to perfecting the legal system and economic institutions; improving the quality of economic growth, national competitiveness, enterprises and products; promoting exports, improving the trade balance; contributing to increasing the attraction of foreign direct investment.
Minister of Industry and Trade Nguyen Hong Dien discusses a number of issues arising in international economic integration - Photo: VGP
To date, Vietnam has participated in 17 FTAs and is preparing to negotiate to join a number of bilateral and multilateral trade agreements. The FTAs that Vietnam participates in cover most continents with over 60 economies with a total GDP accounting for nearly 90% of the world's GDP, including 15 G20 member countries.
Of these, 15 FTAs have come into effect, contributing to expanding export markets, consolidating traditional markets, and creating opportunities for Vietnamese enterprises to participate in potential markets around the world. In all markets where Vietnam has FTAs, export growth has been outstanding, with each year being higher than the previous year. In addition, in terms of politics and diplomacy, participation in FTAs has contributed to enhancing the country's foreign relations position, enhancing the intertwining of interests with key partners, and contributing to ensuring a peaceful and stable environment for national development.
Mr. Nguyen Quang Vinh, Vice President of the Vietnam Federation of Commerce and Industry (VCCI), said that in 2022, the first year that all 15 signed FTAs come into effect, Vietnam's total import-export turnover with FTA partner markets will reach 526 billion USD, accounting for 72% of Vietnam's total import-export turnover with the world. Of which, exports will reach 238 billion USD, accounting for nearly 64% of export turnover. This shows that the majority of Vietnam's trade flows are with FTA partners. Trade with these markets is one of the major driving forces for the growth of production and business in our country's economy.
Taking advantage of FTA tariff incentives in 2022 will reach 78.3 billion USD, equivalent to 33.6% of total export turnover to these markets. Compared to many countries in the region and the world, this is a quite optimistic rate.
However, the limitations in implementing FTAs in recent times have been reflected in a number of aspects. Export growth to FTA markets has not been superior to that of some markets without FTAs. The rate of using FTA tariff preferences is on a downward trend (from a record of 39.7% in 2018 to 32.7% in 2021 and has only slightly improved to 33.6% in 2022) and the progress is unstable with each agreement. This shows that businesses do not seem to have a stable strategy for taking advantage of incentives. The obstacles that make it difficult for businesses to realize potential opportunities from FTAs, according to a survey by VCCI in 2022, also show that businesses are most concerned about market fluctuations and instability (46.8%), limitations in business competitiveness (46.4%), lack of information about commitments and how to apply them (40.1%), and inadequacies in the organization and implementation of FTAs by state agencies (28.2%).
Steering Committee members said that there should be policies to support businesses in the context that key export industries are facing major challenges from the market downturn - Photo: VGP
The right direction in market diversification
Mr. Luong Hoang Thai, Director of the Multilateral Trade Policy Department (Ministry of Industry and Trade) commented that the import-export turnover under new generation FTAs has surpassed traditional FTAs, showing the right direction in market diversification. However, the trend of international economic integration is having new emerging issues with new standards and regulations on environmental protection, digital technology, clean energy, etc.
Agreeing with this opinion, the representative of the Ministry of Foreign Affairs pointed out some main trends in current international economic integration: Restructuring the global financial system; prioritizing regional and bilateral agreements, focusing on specific areas; restructuring the global supply chain; many countries accelerate strategic autonomy, linking the economy with green and sustainable development.
"The fact that countries are stepping up the establishment of new cooperation initiatives and frameworks creates opportunities for Vietnam to participate right from the beginning in the process of building and shaping regulations and rules of the game in new and key areas of cooperation, thereby ensuring maximum benefits for the country," said Ms. Nguyen Minh Hang, Assistant Minister of Foreign Affairs.
Deputy Minister of Natural Resources and Environment Le Cong Thanh added that many new generation FTAs initially have very high commitments in the fields of natural resources, environment, biodiversity conservation, climate change response, etc. towards sustainable development. In the coming time, the Ministry of Natural Resources and Environment will continue to advise the Party, National Assembly, and Government to internalize international commitments on natural resources and environment; review and complete technical barriers on the environment, regulations on greenhouse gas emission reduction, and carbon markets in accordance with new generation FTAs, etc.
The Steering Committee members also discussed and gave their opinions on the international economic integration work in the past year. The implementation and utilization of FTA commitments are associated with institutional and policy reforms, improving national competitiveness, each industry sector, aiming at economic growth and sustainable development, and macroeconomic stability. Policies to support businesses in the context of key export industries facing major challenges from the market downturn, especially key markets.
Deputy Prime Minister Tran Hong Ha requested the Steering Committee to have a flexible operating mechanism and respond promptly to new emerging issues based on proposals and findings of the Steering Committee members - Photo: VGP
The state plays a leading and extremely important role.
Concluding the meeting, Deputy Prime Minister Tran Hong Ha affirmed that international economic integration is a bright spot in the country's development process. However, we have not yet had proactive policies and adequate capacity to take advantage of FTAs and effectively integrate into the economy.
"The world is facing comprehensive changes in geopolitics, economics, trade, competition between major countries... along with the inevitable trend of green economy, circular economy, renewable energy, net zero greenhouse gas emissions... from there, determining appropriate approaches, turning these challenges into advantages and development opportunities", the Deputy Prime Minister analyzed.
The Deputy Prime Minister affirmed that the State must play a leading role in the process of negotiating international economic integration in combination with implementing global goals; institutionalizing and creating a legal environment, policies, standards, and regulations, raising awareness of businesses and people on par with international partners; selecting national brands to build into international brands in the spirit of "doing as the world does at a high level, Vietnamese people can also enjoy".
From the advantages and successful experiences in the digital transformation process, the Deputy Prime Minister said that it is necessary to prepare a roadmap and plan for the State in selecting a number of priority areas in international economic integration, to build a green economy, protect nature, use renewable energy, etc.
"For example, the attraction of foreign direct investment (FDI) in the coming time is not incentives on land, taxes, cheap labor but renewable energy, high-quality human resources, digital resources, solutions to respond to climate change through afforestation, Net Zero...", the Deputy Prime Minister gave examples.
Emphasizing the role of enterprises as the direct implementers of international economic integration, the Deputy Prime Minister suggested that currently many economic sectors are based on other technological levels such as renewable energy, green industry, etc. Therefore, enterprises need to take advantage of FDI resources to train people, change thinking, awareness, working methods, grasp technology, and open up new fields based on high-tech investment.
At the meeting, the Deputy Prime Minister also gave instructions on the work of summarizing and evaluating 10 years of implementing Resolution No. 22-NQ/TW dated April 10, 2013 of the Politburo on international integration, focusing on providing solutions to improve coordination between integration fields in an overall integration strategy, as a basis for building new orientations for integration work in the coming period.
At the same time, ministries, branches and localities urgently deploy the work of reviewing signed FTAs in assigned fields and management tasks.
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