Business
Vietnam makes better use of FTAs
Vietnam has the largest FTA utilization rate in the Indian market at 72%, Chile and South Korea came second and third at 67% and 60%.
Vietnam’s exports benefiting from utilizing preferential treatments in free trade agreements (FTAs) in 2018 stood at US$46.2 billion, accounting for 39% of total exports to markets signing FTAs with Vietnam and up five percentage points year-on-year.
The statistics were revealed in the latest report of the WTO Center and Integration under the Vietnam Chamber of Commerce and Industry (VCCI).
Of the total US$46.2 billion, Vietnam’s exports to China claimed the top spot with US$12 billion, followed by South Korea with US$11 billion and ASEAN with US$8.5 billion.
Notably, the growth rate of Vietnam’s exports utilizing favorable import tariffs to India witnessed the largest increase of 2.6-fold against 2017, reaching US$4.7 billion in 2018.
Overall, Vietnam has the largest FTA utilization rate in the Indian market at 72%, Chile and South Korea came second and third at 67% and 60%, respectively.
According to the report, Vietnam maintains steady growth in FTA utilization rates in ASEAN – India FTA (AIFTA), Vietnam – Chile FTA (VCFTA), and Vietnam – South Korea FTA (VKFTA), as parties involved are in the process of removing import tariffs in commitment to those FTAs.
In recent years, utilization rates of Vietnam from FTAs signed between ASEAN and other partners remain mostly unchanged, partly due to the fact that all parties have completed removing import tariffs.
The report noted Vietnam’s export turnovers to Laos and Cambodia on the back of preferential treatment remained insignificant. The low FTA utilization rates of Vietnam to Laos (0.02%) and Cambodia (10%) were due to the latter two being ASEAN members and exporters in Vietnam taking advantage of the ASEAN Trade in Goods Agreement (ATIGA).
Among Vietnam’s export staples, agricultural products are mostly considered for preferential treatments from FTAs, which easily meet the requirements of wholly obtained (WO) for unprocessed farm products and others regulations for processed products.
Meanwhile, industrial goods have low FTA utilization rates due to difficulties in qualifying for rules of origin.
Illustrative photo.
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Of the total US$46.2 billion, Vietnam’s exports to China claimed the top spot with US$12 billion, followed by South Korea with US$11 billion and ASEAN with US$8.5 billion.
Notably, the growth rate of Vietnam’s exports utilizing favorable import tariffs to India witnessed the largest increase of 2.6-fold against 2017, reaching US$4.7 billion in 2018.
Overall, Vietnam has the largest FTA utilization rate in the Indian market at 72%, Chile and South Korea came second and third at 67% and 60%, respectively.
According to the report, Vietnam maintains steady growth in FTA utilization rates in ASEAN – India FTA (AIFTA), Vietnam – Chile FTA (VCFTA), and Vietnam – South Korea FTA (VKFTA), as parties involved are in the process of removing import tariffs in commitment to those FTAs.
In recent years, utilization rates of Vietnam from FTAs signed between ASEAN and other partners remain mostly unchanged, partly due to the fact that all parties have completed removing import tariffs.
The report noted Vietnam’s export turnovers to Laos and Cambodia on the back of preferential treatment remained insignificant. The low FTA utilization rates of Vietnam to Laos (0.02%) and Cambodia (10%) were due to the latter two being ASEAN members and exporters in Vietnam taking advantage of the ASEAN Trade in Goods Agreement (ATIGA).
Among Vietnam’s export staples, agricultural products are mostly considered for preferential treatments from FTAs, which easily meet the requirements of wholly obtained (WO) for unprocessed farm products and others regulations for processed products.
Meanwhile, industrial goods have low FTA utilization rates due to difficulties in qualifying for rules of origin.
