Time to build a synchronous roadmap and perfect institutions to make good use of EVFTA

	EVFTA implementation requires local firms to thoroughly grasp regulations
	Plummeting exports hit hard by COVID-19 impact during first half of May
	EVFTA to increase GDP by up to 3.25% during initial five-year period

National Assembly Member Tran Hoang Ngan (HCM City)

How do you assess the opportunities that opened up for Vietnam when the EVFTA and EVIPA agreements were ratified?

I think the first will promote two-way trade between Vietnam and the European Union. In 2019, import-export turnover between Vietnam and the European Union accounts for about 11% of the total import-export turnover of the country. In particular, Vietnam exported to Europe US$41.7 billion of goods, accounting for 16% of total export turnover. When the EVFTA is signed, the tariff lines will reach 0%, enabling Vietnamese goods to enter European markets more easily. Secondly, Vietnamese people and Vietnamese businesses will be able to access goods and machinery with affordable prices and good quality.

Currently, it can be seen that when EVFTA and EVIPA are signed early with Europe, Vietnam will attract a flow of foreign investment capital from Europe. Especially when businesses want to move away from markets like China to find another market, Vietnam is a destination.

Over the years, Vietnam has attracted about 32,000 FDI projects with a total registered capital of $370 billion. However, the European region coming to Vietnam is only about 2,500 projects and investment capital is still very modest, about $27.5 billion. Therefore, the ratification of the agreements will help Vietnam access investors with modern technology from Europe.

Many argue that the EVFTA and EVIPA include a lot of institutional reform issues. This is also one of the aspects that will positively impact the process of improving the market economy institution in Vietnam. What is your opinion?

I also think the agreements discuss a lot about the content of institutional reform, so it will push Vietnam to soon improve market economy institutions as well as accelerate the administrative reform process, as well as improve the investment and business environment.

In addition, it must be added that Europe is a very difficult market; Europe's GDP per capita is more than $33,000. This market requires very high quality goods. It will also encourage Vietnamese enterprises to produce more professional goods and more transparent records so they can enjoy tariff regimes.

The benefits the EVFTA and EVIPA bring are evident, but these are not the "trays" available. So, to make good use of the opportunity to open up, maximise the benefits, what are the things to do?

For the agreement to come to life, my first recommendation is propaganda. Recently, Vietnam has signed 12 FTAs. Most recently in 2019, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) came into effect with Vietnam, but few businesses understand and can take advantage of this agreement. Therefore, Vietnam should do better in terms of communication.

I think it is advisable to separate specific topics, enter specific categories, and enter specific target groups. We not only propagate for businesses to understand but in the State management apparatus, State management agencies, in the staff must also understand to support businesses to access the advantages of trade agreements.

In addition, the content of the agreement is very strict, according to the sentences from the law. Therefore, it is necessary to concretise into specific documents for easy implementation for enterprises. That is a very necessary condition.

In addition, European countries are facing difficulties due to the Covid-19 pandemic. In the first quarter, Vietnam had good access to the European market, but from April onwards had difficulties. Therefore, at this moment, Vietnam should maintain relations. The Government should create favourable conditions for businesses to maintain trade promotion, possibly through online promotion, although it is difficult to keep old customers in the European market. Because if it cannot be kept, after the Covid-19 pandemic is controlled in Europe, Vietnamese businesses will lose customers. This is something Vietnamese businesses need to pay attention to as well as concerned agencies need early support for businesses to maintain old relationships, and later have more conditions to deploy.

Institutional improvement is not the story of EVFTA and EVIPA just mentioned but has been mentioned quite a lot in previous FTAs, such as in CPTPP. What is the key solution to promote this process quickly and effectively?

Regarding the content of institutional improvement, the EVFTA, EVIPA or even the previous CPTPP require Vietnam to revise its legal documents. Therefore, I think the Government and the National Assembly need to build a synchronous roadmap, especially for perfecting and repairing the legal system to make the implementation of FTAs more convenient.