FTAs to boost SME sector growth in Vietnam

29 Jan '16

2 min read

The two major Free Trade Agreements (FTAs) – Trans Pacific Partnership (TPP) pact and EU-Vietnam Free Trade Agreement (EVFTA) – will give a boost to the small and medium enterprises (SME) sector in Vietnam owing to the advantages associated with it, according to economist Pham Chi Lan, according to Vietnamese media reports.

The two FTAs will lead to a diversified supply and lower import costs for the SME sector by eliminating international trade barriers, Lan said at a conference on TPP and EVFTA, organised in Ha Noi. The FTAs will boost investments in the country, increase the market share of Vietnamese companies globally and enhance the overall quality of Vietnamese textile products.

Vietnamese small and medium companies saw a decrease in market demand in 2015, and some SMEs had to shut down as a result, according to a leading Vietnamese portal. Some SMEs had to reduce their prices in the international market owing to competition from other textile producing countries.

EVFTA is likely to increase Vietnam's export turnover by 3-6 per cent, as it will eliminate export duties on several items in the next 8-10 years. On the other hand, the implementation of the TPP is likely to increase the country's export by around 30 per cent and improve the country's GDP by around 10 per cent. (MCJ)

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