FTAs help avoid overdependence on single market

HANOI – Vietnam has shown a strong determination to pursue free trade agreements (FTAs), especially the Trans-Pacific Partnership (TPP), to reduce its overdependence on a single export market, said Deputy Minister of Industry and Trade Tran Quoc Khanh.

Speaking at a dialogue organized by the Government portal (chinhphu.vn) last Friday, Khanh said FTAs would help Vietnam restructure exports and imports and avoid heavy dependence on a single market.

At present, East Asia accounts for 70% of Vietnam’s imports and 50% of its exports. Notably, exports to China make up 26% of Vietnam’s total while imports account for 29% of its total.

As the leader of many FTA negotiation teams, Khanh said Vietnam would take an enormous hit if those markets turned volatile.

Tran Dinh Thien, director of the Vietnam Institute of Economics, said signing numerous FTAs could help local exporters reduce trade risks. FTAs will make it possible for Vietnam to change its trade structure, he noted.

Vietnam so far has signed eight FTAs and is in negotiations over seven others, including that with the European Union (EU) and the TPP.

Regarding concerns over Vietnam’s participation in many FTAs in a short time, Thien said this is a consistent principle of the Party and the State. This policy has been in place for years.

The new FTAs will also pave the way for Vietnam to perfect its market economy mechanisms, Thien added.

Khanh said FTA members would have to remove import tariffs, offering Vietnamese greater chance of boosting exports to more foreign markets.

Multinationals such as Samsung, Microsoft, LG and Fuji Xerox have recently announced to turn Vietnam into their production bases, proving that they are keen to tap into the opportunities which will be brought by the FTAs.

Source: The Saigon Times