A stepping stone to bring import-export turnover obtained 1 trillion USD by 2025

Prof. Dr. Nguyen Thuong Lang, Institute of International Trade and Economics, National Economics University

What do you think about the issues affecting the export situation of Vietnam in 2023?

- Following the momentum from 2022, in 2023, Vietnam's import and export turnover may reach new records, in which export turnover may exceed USD 400 billion - an unprecedented number. This is a stepping stone to help the total import and export turnover to reach USD 1 trillion by 2025. However, import and export activities in 2023 may face local difficulties such as fluctuations in the energy market, real estate market fluctuations, etc. world economic stability caused by Russia-Ukraine conflict, decline in aggregate demand due to inflation, supply disruption...

Domestically, favorable trade conditions for Vietnamese exports such as increased prices of food, food and agricultural products help increase turnover, but technical barriers, quality standards, hygiene and quarantine, and rules of origin; traceability, growing area code… are also stricter. Besides, the issue of competition for export markets, competition to attract foreign investment (FDI) from countries in the region can also reduce FDI in Vietnam, thereby affecting total turnover of export.

How do you assess the impact of new generation FTAs on Vietnam's exports in the face of such fluctuations?

- New generation FTAs create a wide and deep market for Vietnamese exports by reducing taxes to almost 0%, helping to reduce costs, simplify procedures and create export advantages. At the same time, FTAs also help to bring advantages of resources such as low-cost labor, taking advantage of abundant capital and high technology from transnational corporations, building a supply chain, etc. The new system has a high standard but still has an impact that exceeds expectations. Therefore, FTAs are considered as tools to overcome fluctuations in the world economic market and the evolution of the Covid-19 pandemic.

When making effective use of FTAs, Vietnamese enterprises will turn advantages into benefits. These FTAs also affirm Vietnam's confidence in implementing international commitments, showing that Vietnam is willing to deeply participate in the global market. This is the driving force for both domestic and FDI enterprises to expand investment in Vietnam for export activities. Combined with advantages in capital, technology, networks and global brands, Vietnamese businesses and the economy have a comparative advantage in creating significant commercial benefits.

However, new generation FTAs have certain challenges such as high accuracy in compliance to enjoy deep tax reductions in a short time, high requirements on rules of origin, environmental requirements, and labor standards as well as many technical and non-technical barriers. All FTAs require building a strict and scientific value chain, optimizing benefits and ensuring long-term partnerships. This is a challenge in investing in building a supply chain from the first stage of research, development and innovation to the last stage of after-sales service.

From the above issues, what are the recommendations for state agencies to take advantage of opportunities and limit challenges in the implementation of FTAs in order to accelerate exports in 2023, sir?

- In order to respond well in the implementation of the FTA, the management agencies need to pay attention to the development of enterprises with solutions to encourage innovation, support investment in the development of the foundation industry and other key export products, develop supporting industries and promote entrepreneurship.

Therefore, the current urgent requirement is to improve the business environment and upgrade the infrastructure for export to maximize cost savings. For businesses, the requirements of transparency, equality, friendliness and cooperation of the business environment are always respected in order to reduce intermediaries and unofficial costs. The simplification of administrative procedures, business and trade facilitation in terms of technical infrastructure, logistics services and social infrastructure must be implemented effectively and efficiently, creating a positive difference to create breakthrough results.

Enterprises need to study and master the requirements of the new generation FTA in terms of regulations of origin, environmental standards, labor standards, responsible business and investment that meet technical standards and regulations and non-technical. Businesses also need to invest in branding, networking, quality improvement, applying new business models, combining traditional commerce with e-commerce, and promoting risk forecasting.

In addition, the authorities need to actively negotiate to expand export markets, have a strategy to create large-scale export goods, build a market information system, information on FTAs, support the promotion of export products, develop high-quality human resource market, build a team of trade experts to advise effective policies and support business development.