Vietnam makes good use of new generation FTAs

The Ministry of Industry and Trade has just reported to the Prime Minister on the implementation results of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Vietnam - EU Free Trade Agreement (EVFTA) and the Vietnam - UK Free Trade Agreement (UKVFTA).

Clear the way for Vietnamese goods

According to the report of the Ministry of Industry and Trade, in 2022, trade turnover between Vietnam and CPTPP countries reached 104.5 billion USD, an increase of 14.3% compared to 2021. Vietnam's export turnover to CPTPP countries reached 53.6 billion USD, an increase of 17.3% compared to 2021. Import turnover from CPTPP countries reached 50.9 billion USD, an increase of 11.3% compared to 2021.

In terms of markets, Vietnam's export turnover to 8/10 CPTPP members has grown positively, with some markets increasing by 163% such as Brunei. Three new markets with FTA relations, such as Mexico and Peru, recorded a decrease in growth (Mexico decreased by 0.5% and Peru decreased by 5.5%), but the largest market, Canada, still increased by nearly 20.1%.

Notably, the rate of using CPTPP Certificates of Origin (CPTPP C/O) of most of Vietnam's key export products continued to grow positively and increased significantly compared to 2021. Specifically, seafood increased by 41.7%, footwear increased by 51.7%, textiles increased by 185.2%, coffee increased by 140.1%, vegetables and fruits increased by 62.3%, cashew nuts increased by 39.4%, wood and wood products increased by 23.5%, machinery and equipment increased by 152.3%...

Among the CPTPP model C/Os issued for exports to CPTPP countries, Canada and Mexico are the two countries with the highest rate of using CPTPP model C/Os, at 13.7% and 30.8%, respectively.

Many positive results have been brought about by FTAs. Photo: Luong Bang

On the contrary, import turnover from 8/10 CPTPP countries recorded positive growth.

The trade surplus with CPTPP countries in 2022 reached 2.63 billion USD while in 2021 Vietnam had a deficit of about 74.5 million USD in trade with CPTPP countries.

In particular, the trade surplus from trade with three new FTA countries, Canada, Mexico and Peru, in 2022 will reach 11 billion USD, accounting for 94% of Vietnam's total trade surplus in 2022 and increasing by 6.7% compared to 2021.

With the EVFTA agreement, the Ministry of Industry and Trade said: In 2022, trade turnover between Vietnam and European Union (EU) member countries reached 62.24 billion USD, an increase of 9.2% compared to 2021. Vietnam's export turnover to EU countries reached 46.8 billion USD, an increase of 16.7% compared to 2021. Import turnover from EVFTA countries reached 15.4 billion USD, a decrease of 8.6% compared to 2021.

Vietnam's trade surplus with EU countries in 2022 reached 31.4 billion USD, an increase of 35.1% compared to 2021. However, despite having the second largest trade surplus, after the US, the proportion of the EU market in Vietnam's total export and import turnover is still not high, at 12.6% and 4.3%, respectively.

With the UKVFTA agreement, in 2022, trade turnover between Vietnam and the UK will reach 6.8 billion USD, up 3.3% compared to 2021. Of which, Vietnam's export value to the UK will reach 6.1 billion USD, up 5.2%; imports from the UK will reach 771 million USD, down 9.8% compared to 2021.

Vietnam's trade surplus with the UK in 2022 reached 5.6 billion USD, up 7.8% compared to 2021. However, the proportion of the UK market in Vietnam's total export and import turnover is not high, at 1.6% and 0.2%, respectively.

There is still room

Although the above figures have shown the positive results that these FTAs have brought about; however, according to the Ministry of Industry and Trade, the implementation process still reveals some difficulties and shortcomings that need to be noted.

That is, exports to major FTA markets such as the EU, CPTPP (Canada and Mexico), and the UK, although growing positively in recent times, the proportion of these markets is still relatively modest (in many provinces, this rate is less than 10%). In addition, the rate of preferential utilization has not reached expectations, for example, the rate of preferential utilization in CPTPP is about 5%, in EVFTA is about 26%, and in UKVFTA is about 24%.

In addition, FDI enterprises still account for the majority of Vietnam's export turnover of large-value export items such as footwear, leather shoes, phones and components, machinery and equipment. Vietnamese enterprises mainly still process or export raw materials and semi-finished products.

"Building and positioning brands for 'Made in Vietnam' products in demanding markets such as FTA countries has not received much attention...", the Ministry of Industry and Trade stated.

Luong Bang

Source