Industry experts in Vietnam feel the need for a concerted policy mechanism to help businesses successfully take advantage of benefits of the free trade agreements (FTAs) as a recent survey by the Vietnam Chamber of Commerce and Industry (VCCI) found that the rate of taking advantage of FTA benefits by enterprises in the country is falling.
The fall was attributed to shortcomings in enforcement of policies by government departments, strict rules of origin and lack of information by companies about commitments and how to exactly to derive full benefits of the FTAs, according to a report. Many experts also acknowledge lower competitiveness of their companies than that of partners, whose countries are also members of the FTAs.
According to President of the Ho Chi Minh City Textile and Garment- Embroidery Association Pham Xuan Hong, the sector only succeeds in taking advantage of FTAs with South Korea, while the success with other partners is low. Hong attributed the reason to different FTAs having different requirements on rules of origin. Many FTAs demand clarification of origin of yarn, while Vietnam mainly imports materials from China, he added.
Experts say the rate of enterprises taking full advantage of the FTAs has improved from 10 per cent initially to 38 per cent now. However, that is not enough to reduce the trade imbalance with partners. Vietnam should initiate steps in a concerted manner to increase competitiveness of exporters to meet expectations when joining FTAs, experts argue.