FTA Index creates new impetus

Vietnam’s participation in 19 FTAs has enabled the country to promote economic growth, diversify import-export markets and attract more foreign investment, inspiring its innovations to enhance the competitiveness of goods and businesses. However, according to the Ministry of Industry and Trade (MoIT), Vietnam has yet to take full advantage of FTAs. Reasons include weaknesses of businesses and limited support of localities. Most localities still lack specific programs to help businesses take advantage of FTAs.

Connecting businesses to supply chains - photo: Vietnam+

Nguyen Anh Duong, Head of the General Research Department of the Central Institute for Economic Management (CIEM), said that there have been positive changes in the way localities help businesses implement FTAs. However, some localities have yet to pay attention to supporting businesses in this field.

The MoIT is coordinating with relevant agencies to build the FTA Index which is expected to be issued later this year. Ngo Chung Khanh, Deputy Director of the MoIT’s Multilateral Trade Policy Department, said that the FTA Index will encourage localities to pay greater attention to taking advantage of FTAs. The index will also reflect FTAs’ effects on localities, especially on direct beneficiaries, including businesses and consumers.

Nguyen Anh Duong believes the FTA Index’s periodic data will encourage localities to implement FTAs effectively. In the opinion of economist Vo Tri Thanh, the FTA Index will help assess FTAs’ effects as well as the implementation of FTA commitments. “The FTA Index will be useful to efforts to access new markets, promote exports and enhance competitiveness. More importantly, it will reflect businesses’ strengths and weaknesses in taking advantage of FTAs,” Thanh said.

Processing dragon fruit for export

However, Thanh added, “To effectively use the FTA Index as a tool to measure the effectiveness of FTA implementation, it is necessary to conduct qualitative and quantitative surveys and take into account both domestic and foreign factors.”

Nguyen Anh Duong proposed that the FTA Index be publicized to ensure its transparency and reliability. In his opinion, localities should consider the FTA Index as a source of reference during the policy making process . Local authorities should seek support from specialists to be properly aware of indexes. The MoIT will maintain regular contact with partners to provide localities with necessary technical support to enable effective FTA implementation.