Vietnamese economy is expected to make strong growth following a numberof free trade agreements (FTA) coming into effect in the near future,said radio The Voice of Vietnam (VOV).
The trade pacts, oncesigned, will open up new opportunities for high quality Vietnameseproducts to integrate deeply into the global market while helping thecountry reduce its overdependence on certain markets.
Most notably among them is the Trans-Pacific Partnership (TPP) agreement, which is currently in its 20th round of negotiations.
Membercountries are currently negotiating to eliminate 100 percent of tariffson imports, of which 90 percent of the tariffs will be abolishedimmediately with the remaining 10 percent removed following a moratoriumperiod of up to 10 years.
TPP member countries account for 40 percent of global GDP and 30 percent of the total global import-export revenue.
Oncethe agreement is signed, Vietnamese products will have ampleopportunities to deeply penetrate large markets including the US ,Canada , Mexico and Japan on a more equal playing field with othercountries around the globe.
The Vietnamese garment sector isexpected to cash in on the TPP agreement. Roughly 1,000 tax lines ongarment products exported to the US will be slashed to zero from thecurrent 18 percent. Garment exports may surge 15-20 percent annuallyand may reach 50 billion USD by 2025 according to some optimisticforecasts.
However, to benefit from the trade pact, the garmentsector must meet certain conditions, such as certificate of origin onmaterials used in the intra-bloc.
Secretary Generalof the Vietnam Textile and Apparel Association (Vitas) Dang Phuong Dungsays this is not necessarily going to be an easy task.
Garmentbusinesses must renovate technology, invest in material production,create closed process ranging from fibre, textile, dying and garment,and raise the proportion of domestic material use and added value forproducts to grasp TPP’s advantages, Dung says.
The mostchallenging requirement for Vietnam is to make products fromdomestic materials, and to do this, Dung says, the sector has no choicebut to develop material growing areas.
In addition, she adds,Vitas is preparing to train and shift from doing outsourcing to modernproduction methods to increase added value for products.
Thisyear, Vietnam is also negotiating a number of other important FTAagreements including one with the European Union, the Republic ofKorea , and the Customs Union (Russia-Belarus-Kazakhstan).
Theseagreements will help Vietnam expand its export markets, especiallyfor agricultural products, and reduce its overdependence on the Chinesemarket.
Chairman of the Vietnam International Arbitration CentreTran Huu Huynh says strict requirements from these agreements forcedomestic businesses to improve their competitiveness to join the globalvalue chain.
“These agreements will offer both opportunities and challenges for them to rise up,” Huynh said.
Onthe other hand, Vietnam ’s imports will also enjoy benefits fromthese agreements. State-of-the-art machinery and equipment will bereadily available for import at reasonable prices.
Machinery andequipment imports from the EU rose from 2.6 billion USD in 2005 to 7.6billion USD in 2010. Tariff cuts will help Vietnam import yet evenhigher quality machinery and equipment at lower prices, graduallyfacilitating a reduction in the trade deficit with China .
Vietnam is actively negotiating to finalise the free trade agreementsto support businesses in expanding markets overseas in the future.
Ministerof Industry and Trade Vu Huy Hoang says the Government’s guideline isto diversify new import-export markets to avoid overdependence on anyone partner to the greatest extent possible.
“The Government will create a niche for businesses to accelerate exports more stably and sustainably,” Hoang notes.
Expertswarn that when trade pacts are signed, Vietnam should developpromotion programmes for each field, draw up detailed plans for materialgrowing areas and sustainably develop the support industry.
TheGovernment should also soon issue support policy guidelines for garment,footwear and agricultural businesses to fully exploit advantages fromFTAs.-VNA
The trade pacts, oncesigned, will open up new opportunities for high quality Vietnameseproducts to integrate deeply into the global market while helping thecountry reduce its overdependence on certain markets.
Most notably among them is the Trans-Pacific Partnership (TPP) agreement, which is currently in its 20th round of negotiations.
Membercountries are currently negotiating to eliminate 100 percent of tariffson imports, of which 90 percent of the tariffs will be abolishedimmediately with the remaining 10 percent removed following a moratoriumperiod of up to 10 years.
TPP member countries account for 40 percent of global GDP and 30 percent of the total global import-export revenue.
Oncethe agreement is signed, Vietnamese products will have ampleopportunities to deeply penetrate large markets including the US ,Canada , Mexico and Japan on a more equal playing field with othercountries around the globe.
The Vietnamese garment sector isexpected to cash in on the TPP agreement. Roughly 1,000 tax lines ongarment products exported to the US will be slashed to zero from thecurrent 18 percent. Garment exports may surge 15-20 percent annuallyand may reach 50 billion USD by 2025 according to some optimisticforecasts.
However, to benefit from the trade pact, the garmentsector must meet certain conditions, such as certificate of origin onmaterials used in the intra-bloc.
Secretary Generalof the Vietnam Textile and Apparel Association (Vitas) Dang Phuong Dungsays this is not necessarily going to be an easy task.
Garmentbusinesses must renovate technology, invest in material production,create closed process ranging from fibre, textile, dying and garment,and raise the proportion of domestic material use and added value forproducts to grasp TPP’s advantages, Dung says.
The mostchallenging requirement for Vietnam is to make products fromdomestic materials, and to do this, Dung says, the sector has no choicebut to develop material growing areas.
In addition, she adds,Vitas is preparing to train and shift from doing outsourcing to modernproduction methods to increase added value for products.
Thisyear, Vietnam is also negotiating a number of other important FTAagreements including one with the European Union, the Republic ofKorea , and the Customs Union (Russia-Belarus-Kazakhstan).
Theseagreements will help Vietnam expand its export markets, especiallyfor agricultural products, and reduce its overdependence on the Chinesemarket.
Chairman of the Vietnam International Arbitration CentreTran Huu Huynh says strict requirements from these agreements forcedomestic businesses to improve their competitiveness to join the globalvalue chain.
“These agreements will offer both opportunities and challenges for them to rise up,” Huynh said.
Onthe other hand, Vietnam ’s imports will also enjoy benefits fromthese agreements. State-of-the-art machinery and equipment will bereadily available for import at reasonable prices.
Machinery andequipment imports from the EU rose from 2.6 billion USD in 2005 to 7.6billion USD in 2010. Tariff cuts will help Vietnam import yet evenhigher quality machinery and equipment at lower prices, graduallyfacilitating a reduction in the trade deficit with China .
Vietnam is actively negotiating to finalise the free trade agreementsto support businesses in expanding markets overseas in the future.
Ministerof Industry and Trade Vu Huy Hoang says the Government’s guideline isto diversify new import-export markets to avoid overdependence on anyone partner to the greatest extent possible.
“The Government will create a niche for businesses to accelerate exports more stably and sustainably,” Hoang notes.
Expertswarn that when trade pacts are signed, Vietnam should developpromotion programmes for each field, draw up detailed plans for materialgrowing areas and sustainably develop the support industry.
TheGovernment should also soon issue support policy guidelines for garment,footwear and agricultural businesses to fully exploit advantages fromFTAs.-VNA
