FTA Trend Drives Vietnam'S Textile Export Share

Driven by the strong FTA trend in Vietnam, it is gradually approaching its goal, plus Vietnam's ongoing domestic innovation measures. It is expected that Vietnam will soon become a tiger in Southeast Asia.

In the TPP agreement signed not long ago, Vietnam is regarded as a country waiting to be signed by other countries, and now it has reached a free trade agreement with the largest national organization, the European Union.

According to Agence France-Presse recently reported that the European Commission President Juncker held talks with Vietnamese Prime Minister Ranjig, said: "today's signing is not the end of our relationship, but the beginning of a more ambitious relationship."

In order to reach the agreement, the European Union and Vietnam carried out tense negotiations for nearly three years.

The EU and Vietnam agreed in principle in August this year, and now the two sides have finally signed the FTA.

The FTA between Vietnam and the EU is the fourth free trade agreement that Vietnam has won this year.

According to statistics, Vietnam has signed FTA agreements with South Korea and Eurasian union this year, and signed TPP in October this year, while the Vietnam Europe free trade agreement is the fourth. This shows the ambition of Vietnam to actively explore the international market.

Although the total amount of Vietnam is small in terms of economic volume, Vietnam has intensified the pace of reform and opening up in recent years, especially the frequent participation in various bilateral and multilateral FTA negotiations, which has attracted the attention of various countries.

The above four free trade agreements, together with the implementation of the ASEAN Free Trade Area, ASEAN - China FTA, ASEAN - Korea FTA, ASEAN - Japan FTA, ASEAN - India FTA, ASEAN - Australia and New Zealand FTA, Vietnam - Japan FTA, and Vietnam - Chile FTA, Vietnam has concluded the negotiations FTA has reached 12.

This does not include RCEP, which is still under negotiation.

It can be said that Vietnam and its main trading partners have basically reached FTA, and obviously Vietnam is the biggest beneficiary.

Driven by these FTA, Vietnam's economic growth is expected to be the best this year in the six largest countries in Southeast Asia.

At the same time, with the growth of export trade and the rise of foreign direct investment, this growth is more effective.

According to an ASEAN research paper, the growth of GDP and exports in Vietnam in the next 20 years is expected to reach 8% and 17%, thanks to TPP and other FTA.

In fact, as one of Vietnam's largest trade partners, the FTA of Vietnam and the EU is the latest one.

Over the past ten years, the bilateral trade volume between the EU and Vietnam has increased two times to 28 billion euros (about US $30 billion), so both sides have long recognized the necessity of signing a FTA.

Since the start of 2012, the negotiations between the European Union and Viet Nam have been going on for nearly three years, and now they are ripe for improvement.

For Vietnam, this will be a very important FTA, which will accelerate its integration into the global economic system and open up a larger international market space.

Most importantly, the EU and Vietnam will gradually abolish tariffs in the next seven years, which involves almost all commodities between two regions.

It is worth mentioning that this is the first FTA reached by the European Union and the developing countries, so it has certain enlightenment significance for China and other countries.

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At present, Vietnam's six largest trading partners are China, the United States, the European Union, South Korea, Japan and Thailand.

Among them, the United States and Japan are the top two trade partners of Vietnam in the TPP partner countries. China, Korea and Thailand are Vietnam's largest trading nations in RCEP. The EU is the largest trading partner outside the two regions. Vietnam's textile industry and footwear industry will be the most profitable industry in these trade.

Vietnam is expected to export in the next 10 years.

And shoes will grow by 50%, and the export of all kinds of aquatic products will also increase by 6.4%-7.2%, and the growth trend of other products will not be small.

Due to the need to comply with the rules of origin, after the formal implementation of these FTA, Vietnam's textile industry and footwear will face many challenges. Agriculture, especially animal husbandry, will also face fierce competition, and its domestic employment system will also face great international challenges.

Therefore, these newly signed rules will also push Vietnam's structural reform and reform of state-owned enterprises to a certain extent.

Vietnam footwear industry

The analysis shows that Vietnam today is equivalent to China at the beginning of this century. It is in the period of labor intensive, with strong capacity and most of the market is abroad. The increase of capacity needs to be solved in the international market. The most effective way is to resolve it through FTA.

Another key factor is that Vietnam is also unable to get rid of a strange circle, and its labor costs are also gradually increasing in recent years.

And objectively speaking, most of Vietnam's exports have such problems as low value-added, poor product quality, serious dependence on imported raw materials, poor processing facilities and inadequate pportation capacity, which seriously restrict the quality and efficiency of Vietnam's exports.

Therefore, the Vietnamese government is increasingly aware that only by forcing Vietnamese enterprises to enhance their competitiveness can they become a foothold in the international market.

Vietnam now accelerates the signing of these FTA with major trading nations, which promises to substantially reduce tariffs and remove trade barriers, help to promote trade balance, and help Vietnamese companies to participate in global production chains and supply chains.

But for Vietnam and EU FTA, Vietnam's low-end products and EU's high-end products are more complementary, and can even complement China's exports to Europe. After all, Vietnam's many products are not as good as China, and the total volume is not large, so it helps to gain more possession in the international market.

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Moreover, Vietnam was once a French colony, and its innate thinking might have contributed to the birth of Vietnam and the European Union FTA.

Vietnam has signed FTA with its major trading partners. It may have become one of the countries with the largest number of FTA signing, and its ultimate goal may be to balance the relationship with China.

Anyway, Vietnam's biggest competitor is China, and its main export products are China's bulk exports. However, compared with Vietnam, China has great competitive advantages in the international market.

Moreover, most of the sources of raw materials for Vietnam's exports are also China, which makes them relatively weak in competitiveness and at the same time has high dependence on China.

Therefore, if we want to export to China's products, Vietnam will have more FTA than China, so that we can expand the channels for Vietnamese products, especially some trade preferences that China can't enjoy. It will enable Vietnamese products to go abroad at a faster pace.

In view of this, Vietnam will become a big winner of these FTA and win considerable market share from China and other non FTA members.

Obviously, the momentum is strong in Vietnam.

Driven by the trend, it is gradually approaching the goal, plus Vietnam's ongoing domestic innovation measures, and it is expected that Vietnam will soon develop into a "tiger" in Southeast Asia.