2015: The year of free trade agreements and 5 "best" It can be said that 2015 is a "record" year for free trade agreements of […]
It can be said that 2015 was a "record" year for Vietnam's free trade agreements.
Garment is one of Vietnam's export products that benefits the most from the FTA.
The most free trade agreements
In 2015, Vietnam signed and concluded negotiations on 4 important agreements with major market areas.
In particular, Vietnam concluded negotiations on two major agreements, the Trans-Pacific Partnership Agreement (TPP) and the Vietnam-EU Free Trade Agreement (EVFTA).
Two trade agreements have been signed, including the Vietnam-Eurasian Economic Union Free Trade Agreement (VCUFTA) and the Vietnam-Korea Free Trade Agreement (VKFTA).
Not to mention the ASEAN Economic Community (AEC) has been officially established since November 22 this year.
Links with the most countries
TPP was signed between 12 countries with the aim of integrating the economies of the Asia-Pacific region.
EVFTA opens the way for Vietnamese goods to enter the European Union market, including 27 member countries.
Initially, the Eurasian Economic Union included three official members: Russia, Belarus, and Kazakhstan. Armenia and Kyrgyzstan were approved to join the union later.
Plus VKFTA, 4 agreements strengthen Vietnam's trade relationship with 44 countries.
The largest potential market size
The TPP market has a scale of 800 million people, accounting for 40% of global GDP at 30 trillion USD; nearly double the EU market capacity at 500 million people, GDP reaching 10 trillion USD.
The Eurasian Economic Union market has a total population of more than 175 million people and a GDP of 2.5 trillion USD.
Korea has more than 50 million people with a GDP of 1.4 trillion USD.
In total, FTAs in the past year brought Vietnam access to a potential market of more than 1.4 billion people, with a GDP of 43.7 trillion USD.
Record large predicted impact
According to calculations by the Peterson Institute for International Economics, under ideal conditions, TPP can boost Vietnam's GDP by 23.5 billion USD in 2020 and 33.5 billion USD in 2025. Exports will increase by 68 billion USD in 2025.
The study also shows that Vietnam may be the country that benefits the most among the 12 countries participating in TPP. Compared to the time before the agreement, Vietnam's income in 2025 will increase by 13% and exports will increase by more than 37%.
The World Bank predicts that TPP will increase Vietnam's GDP by 8-10% by 2030.
Similar to VCUFTA, Vietnamese exporters can sell a lot of goods to the three countries in the Union, contributing to increasing export turnover for the country.
It is estimated that when VCUFTA is signed, exports from Vietnam to Russia may increase by 63%, to Belarus by 41% and to Kazakhstan by 8%.
It is expected that the creation of a free trade area allowing trade between the three countries of the Customs Union and Vietnam will exceed 10 billion USD by 2020.
For EVFTA, the European Trade and Investment Policy Support Project (EU-MUTRAP) predicts that this agreement will come into effect and create conditions for Vietnam's GDP to increase by 7-8% in 2025, exports will increase by 50% in 2020 and 93% in 2025.
After VKFTA takes effect on December 20, Vietnam and Korea set a goal of pushing bilateral turnover from 33.6 billion USD in the first 11 months of 2015 to 70 billion USD in 2020.
The most tariffs were lifted
The 12 member countries participating in the TPP Agreement committed to eliminating 78 - 95% of Vietnam's import tax lines immediately after the Agreement.
In the Eurasian Economic Union's commitment to open the goods market through tariff elimination for Vietnam, about 59% of tariffs will be lifted after the agreement takes effect; 25% is cut each year.
For Korea, the Seoul government has committed to reducing 95.4% of import tariffs from Vietnam, higher than Vietnam's 89.2% for Korea.
Particularly with EVFTA, Vietnam and the EU will eliminate import taxes on more than 99% of tariff lines. For the very few remaining tariff lines, the two sides will give each other tariff quotas or partial tariff cuts. This can be considered the highest level of commitment that Vietnam has achieved in FTA agreements signed to date.
With the above numbers, it is no exaggeration to say that 2015 was a "record" year for Vietnam's free trade agreements.
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