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Economic Sector

Last updated: Thursday, February 21, 2019

 

New Generation FTAs: Opportunities for Vietnam

Posted: Tuesday, January 29, 2019


A new development plan has been shaped for Vietnam’s economy for 2019, driven by the strong momentum of its 2018 GDP growth rate at 7.08%, the highest increase since the financial crisis 10 years ago, and the top ranking of the ASEAN Manufacturing Purchasing Managers Index (PMI). At the same time, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) officially coming into effect in January has brought about expectations of high growth for 2019 and the years after.

Not only in Vietnam but also throughout the world, new generation FTAs create the expectation of promoting investment and economic growth towards green, eco-friendly, high productive growth. Up to now, FTAs ​​have undergone four generations. The first generation of FTAs ​​only focused on trade in goods. The second one ​​has expanded into service sector. The third one of FTAs has ​​added investment sector and the current fourth FTA covers non-commercial sectors such as the environment, trade unions and child labor.

In the context of intensive international economic integration at many levels, under various forms and the presence of protectionism and populism, Vietnam still affirms its determination to integrate by working with other members to negotiate and officially sign the CPTPP, and to hold negotiations on the EVFTA with the European Union.

Obviously, the CPTPP and other new generation FTAs ​​that Vietnam is negotiating, are under ratification or has signed, have created huge expectation, promoted the advancement in trade, investment and production of the country in 2018 and the following years. According to a latest forecast recently released by Vietnam Institute for Economic and Policy Research (VEPR), the targets for 2019 approved by the National Assembly (GDP growth of 6.6-6.8 %) is achievable, and the growth can even surpass the forecast (which is at 6.9%). Previously, the National Center for Socioeconomic Information and Forecast (NCIF), international organizations such as World Bank and Asian Development Bank (ADB) all forecast Vietnam's growth in the period of 2019-2020 would rise from 6.5% or more, a high growth rate compared to that of the regional level.

Not only creating motivation for trade and production growth, the new generation FTAs ​​also put pressure on businesses and authorities at all levels on non-commercial issues, environmental protection and institutional reform. Economic growth is in line with real reforms.

Thanh Yen








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