Vietnamese Businesses Passive to Integration Information

According to surveys, many Vietnamese companies are still passive in accessing FTA information. Sometimes, they disregard opportunities and challenges when Vietnam joins these trade agreements. Therefore, they need to change their thinking to institute strategic changes for the upcoming time.

 

Besides the ASEAN Free Trade Area (AFTA), Vietnam is signatory to FTAs with Australia - New Zealand, China, India, Japan, South Korea and most recently Chile. The country is negotiating other FTAs, including the FTA with the European Union (EU); Trans-Pacific Partnership (TPP) Agreement, the FTA with the Customs Union of Russia, Belarus and Kazakhstan; and the FTA with South Korea. The FTA with South Korea was officially signed recently and three remaining FTAs are expected to be concluded in 2015. Remarkably, the ASEAN Economic Community (AEC) will be formally established in 2015.

 

FTA pluses for Vietnamese businesses are undeniable, because they can engage more deeply into global and regional production and supply chains. However, according to a recent survey by the Vietnam Chamber of Commerce and Industry (VCCI), a considerable number of businesses (30 percent of companies surveyed) said they did not know any details about Vietnam’s entry to TPP negotiations. Among them, private businesses accounted for 31.5 percent and FDI enterprises were 29.8 percent.

 

Earlier, another survey with Vietnamese businesses on the entry to AEC was also launched. The result showed that up to 76 percent of companies surveyed did not know anything about AEC, 94 percent did not have AEC negotiation contents, and 63 percent had no idea about opportunities and challenges when Vietnam joined AEC.

 

Businesses are unclear about the effects of FTAs that Vietnam is a signatory to because of lack of information transparency. This bars businesses from studying opportunities and challenges when Vietnam joins. Thus, they all hope that State agencies will have effective support measures to help them benefit from FTAs and overcome difficulties and problems arising in the course of operation.

 

Economic specialist Vu Vinh Phu said Vietnam is presented with a big challenge upon entering FTAs: agricultural products must defend the domestic market. It must seek solutions to help farmers not to be at a disadvantage when they encounter foreign rivals on the home market.

 

TPP conditions and provisions have not been revealed. What they know is Vietnam is forecast to benefit from this agreement while seeing a lot of difficulties and challenges conditions in product conditions and requirements. TPP-turning point information is not revealed to them while this agreement is assessed to have huge impacts, even cause big changes of game in international trade agreements.

 

Although conditions and provisions for the entry to FTA are quite tight, very few companies are aware of its impacts on their business operations.

 

Mr To Hoai Nam, Vice Chairman and Secretary General of the Vietnam Association of SMEs, said that most Vietnamese businesses cannot answer the key question about industry structure in the context of integration or some goods or products placed under direct competition from other signatory countries. They also lack solutions to anticipate competition and responses.

 

According to economic experts, to grasp opportunities from FTAs and prevent and minimise risks, Vietnam needs to reform its market economic institutions, especially the mindset in policymaking which needs to be driven by market economy principles, enhance the competitiveness of business community where the private sector needs to be developed and roles of State-owned enterprises reduce, raise the quality of human resources, especially high-level labour, and build domestic and foreign market development strategies.