Improve efficiency from FTA agreements

Having an FTA is only part of the passport to markets. It is important to go a long way and improve competitiveness, businesses must build a brand.

According to estimates by the Ministry of Industry and Trade, total import-export turnover this year could reach 683 billion USD. The trade balance continues to trade surplus for the 8th consecutive year, with an estimated surplus of nearly 30 billion USD, nearly 3 times higher than in 2022. Contributing to this result are 16 free trade agreements ( FTA), helps Vietnam have an advantage in more than 60 global partner markets and along with that, expands the gateway to potential markets.

The Ministry of Industry and Trade said that the decline in exports is increasingly narrowing, from a decline of 12% in the first half of the year, to now just under 6%. The growth rate for products taking advantage of FTAs for processing and manufacturing increased dramatically, such as electronic components by more than 30%, textiles, garments and footwear by more than 20%.

"These items have shown that the supply chain that previously wanted to form in Vietnam for production has begun to take shape. Therefore, those businesses have qualified for the rules of origin to take advantage of exports." , said Mr. Luong Hoang Thai, Director of the Multilateral Trade Policy Department, Ministry of Industry and Trade.

FTA is an advantage, but it is not enough to be competitive. (Illustration - Photo: Investment Newspaper)

For foreign investors, Vietnam has become an important gateway in the supply chain when investing in Vietnam now allows access to most of the world's major markets. "Foreign investors are prioritizing investment locations like Vietnam, ensuring the criteria of rapid economic recovery, inter-regional production chains and supplier diversification. Trade Agreements 

Freedom is creating very favorable conditions for investors with such strategies," said Mr. Hans Kerstens, Managing Director of DEEP C Industrial Park.

However, the general consensus is that strong demand decline still persists in most markets. Partners and brands around the world have to stop orders, reshape suppliers, along with new, more stringent standards. FTA is an advantage, but it is not enough to be competitive.

Textile and garment is one of the industries with the highest rate of use of free trade agreements, but businesses are currently only processing, mainly exporting through intermediaries, so the added value is low. The problem is that having FTAs is only part of the passport to markets. It is important to go long distances and improve competitiveness, businesses must build brands.

"Large customers around the world from Japan, America, and Europe want Vietnamese factories to be able to develop samples, designs, and link deeper in the customer's supply chain, not only participating in technology, but also provides solutions", Mr. Luu Tien Chung, Vice Chairman of Vietnam Textile and Apparel Association, informed.

Building a brand is not easy and is only for businesses with real potential, market understanding and a systematic strategy, but it is a must-do to ensure sustainable exports.

According to vtv.vn