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Meeting conditions on rules of origin at FTAs is a challenge for businesses

03:30 - 23/10/2023

Up to now, Vietnam is participating in and signing 19 Free Trade Agreements (FTAs), including 3 new-generation Free Trade Agreements (CPTPP, EVFTA, UKVFTA) with a deeper and more comprehensive level of commitment than traditional FTAs, while covering "non-trade" issues such as labor, sustainable development, environment...


Since the new generation FTAs came into effect, the Government has issued a synchronous implementation plan from the central to local levels. Hanoi is currently one of the localities proactively leading the implementation of FTAs, supporting businesses to take advantage of incentives, commitments, promoting import and export.

As a focal point for international integration, the Hanoi Department of Industry and Trade said that the unit has actively advised the City People's Committee to promulgate plans and policies to implement new-generation FTAs in Hanoi. Through the plans of the City People's Committee, departments, departments, branches, districts, districts and towns have concretized and integrated in programs and plans of their branches and units.

In particular, Hanoi has actively supported enterprises to innovate technology, apply advanced science and technology, implement programs to improve productivity, quality of products and goods of enterprises. Enhance promotion of investment, trade and tourism abroad, create conditions for enterprises to introduce and promote products and seek partners, promote cooperation and export opportunities.

In particular, Hanoi City has implemented measures and mechanisms to encourage and orient foreign-invested enterprises, especially enterprises and investors from FTA markets to connect with domestic enterprises to form and develop supply chains.

Accompanying businesses in recent years, Hanoi Department of Industry and Trade has carried out a series of forms of propaganda and dissemination to raise awareness and in-depth understanding of FTAs for businesses from conferences, seminars, training, issuing business handbooks on industries, markets, import and export newsletters to instructions on looking up preferential tariff tariffs through the Portal FTA news (FTAP) of the Ministry of Industry and Trade; annually organize annual trade promotion activities at home and abroad; support enterprises to receive advanced and modern technology transfer; hiring foreign experts and training human resources...

Thanks to the proactiveness and positivity, with the implementation of many solutions to support businesses to make the most of the benefits from new-generation FTAs, according to the Hanoi Department of Industry and Trade, it has contributed to promoting the growth of two-way trade value between Hanoi City and other countries in FTAs.

Already in 2022, Hanoi's export turnover to the market of 3 FTAs (cptpp, evfta, ukvfta) will increase by 1.03% compared to 2021; Hanoi's import turnover from the market of 3 Agreements CPTPP, EVFTA, UKVFTA increased by 4.6%.

Stepping up support for businesses to take advantage of FTAs

According to the Hanoi Department of Industry and Trade, the efficiency of taking advantage of opportunities from FTAs such as CPTPP and EVFTA, UKVFTA of enterprises in the area has been improved, reflected in the increase in export turnover to the markets of countries in the Agreement. "However, the proportion of Hanoi's export turnover to these FTAs has not met expectations, especially the proportion of preferential turnover from FTAs is still modest" - Hanoi Department of Industry and Trade said.

Up to now, according to a report of the Hanoi Department of Industry and Trade, the number of enterprises having import and export transactions with countries participating in these agreements is still very limited, especially enterprises whose shipments are entitled to preferential tariffs under the agreement. Import and export activities of Hanoi enterprises still focus on traditional markets, import and export activities to new markets that are members of the agreements are still modest.

Citing the reasons for the ineffective utilization of FTAs, according to the Hanoi Department of Industry and Trade, due to difficulties such as: Propaganda and dissemination of FTAs are carried out continuously and in many forms but the attention of businesses is limited.

Notably, Hanoi's export enterprises are domestic enterprises (accounting for 55.3%) and have small scale, so the competitiveness of enterprises is still weak, high price, low quality compared to international standards.

Hanoi enterprises still lack sensitivity and creative dynamism, have not combined the strength of enterprises in the same industry and production chain. In particular, meeting the conditions on rules of origin at new-generation FTAs is a challenge for many businesses. Meanwhile, taking advantage of incentives from FTAs is associated with meeting the conditions of origin of exported goods.

Many enterprises have not been proactive in domestic raw materials to meet conditions and take advantage of FTAs effectively, as well as have not focused on improving the level of management, human resources and brand development; the in-depth study of commitments in FTAs to build long-term production and business plans in order to take advantage of tariff incentives that have not been focused by enterprises...

Facing limitations in taking advantage of FTAs of enterprises, in the coming time, the Hanoi Department of Industry and Trade said that this unit will continue to focus on implementing programs and plans to support businesses to make good use of new-generation FTAs to promote export growth, focusing on solutions:

Firstly, focus on propaganda and information about goods and markets as well as tariff preferences under FTAs so that enterprises know where the opportunities are, in which markets and groups of goods, what conditions enterprises need to meet on rules of origin to enjoy tariff preferences ...; Closely monitor the situation of the enterprise to promptly grasp difficulties and obstacles to proactively remove and support according to competence.

Second, promote trade promotion programs at home and abroad, especially the market of FTAs to support enterprises to introduce and promote products and seek partners, promote cooperation and export opportunities; Focus on developing supporting industries to avoid excessive dependence on imported raw materials, adopt policies to attract investment in these industries.

Third, develop synchronous and modern logistics infrastructure for production and export makes Hanoi an important logistics hub of the region, the whole country and the region; develop e-commerce, connect and support domestic enterprises to participate in major domestic e-commerce platforms such as (Lazada, Shopee, Tiki), promote cross-border online exports through e-commerce.

In addition, the Hanoi Department of Industry and Trade also recommends that the Ministry of Industry and Trade and central ministries and branches strengthen the work of information on forecasting the domestic and world market situation, new policies and regulations of markets to help businesses react promptly; continue to support and coordinate more closely with localities in the process of implementing FTAs; organize intensive training courses for officials working on international integration in localities to improve the effectiveness of the implementation of FTAs in localities. Propose and allocate proactive funding sources exclusively for international integration, implementation of FTAs and guide localities to access this fund.