(VOVWORLD) - Vietnam has signed many Free Trade Agreements including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Vietnam-EU Free Trade Agreement. This year Vietnam and other ASEAN countries will join the Regional Comprehensive Economic Partnership with Japan, China, Republic of Korea, India, Australia, and New Zealand. These FTAs are creating great momentum for Vietnam’s economy.
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Economists predict Vietnam’s GDP growth in 2019 will be between 6.7 and 6.9%. They said Vietnam should improve its business environment and seize every opportunity offered by FTAs and the 4th Industrial Revolution.
Opportunities and challenges
Vietnam has finalized 12 FTA negotiations and 9 agreements have already taken effect. The CPTPP is expected to boost Vietnam’s export growth to 4.2% and import growth to 5.3%. When the Vietnam-EU Free Trade Agreement takes effect, it will open the door for Vietnamese products to enter the EU market tariff-free. With lower tariffs and fewer trade barriers, Vietnamese products will penetrate deeply into the global distribution network.
But trade protectionism, trade wars, and Britain’s exit from the EU are slowing the global economy. Vietnam hopes to balance active international integration and greater national self-reliance and competitiveness.
Deputy Foreign Minister Bui Thanh Son said: “Global integration commitments have put more pressure on Vietnam’s enterprises and products. The question is how to implement FTAs to bolster national strength, improve productivity and competitiveness, and promote Vietnamese brands.”
New momentum for reform
Economist Vo Tri Thanh elaborated how Vietnam has benefited from FTAs: “Vietnam has created advantages in global integration by joining many FTAs and acquiring more strategic partners. Businesses have caught up with the global trend toward production networks, value chains, and large markets.”
Expert said Vietnam should continue to improve its business environment while developing its socialist-oriented market economy and private economic sector and promoting innovation.
Associate Professor, Doctor Vu Minh Khuong of Lee Kwan Yew University, a member of the Prime Minister’s Economic Advisory Team, proposed establishing a National Committee for Economic Reform to promote free trade and equality.
“Vietnam must strengthen its resilient capability to handle global changes to avoid damage from the outside world, while improving its economic, social, and environmental institutions, its the macro-economy, and its labor productivity.” Khuong said.
In order to make the most of open markets and FTAs, Vietnam must take into consideration management scenarios, improve forecasting, and adapt to the effects of free trade and protectionism. Experts also called on the country to expand exports and attract high quality foreign investment projects to boost sustainable development.