A seminar held on September 25 in Ho Chi Minh City on “Opportunities and Challenges for Vietnamese Enterprises in Implementing International Free Trade Agreements (FTAs)” highlighted a paradox: although Vietnam has signed 18 FTAs, 17 of which are in force covering nearly 90 percent of global GDP, domestic enterprises have leveraged tariff preferences in only 30–40 percent of cases.
Broad market access, limited benefits
According to Ms. Bui Hoang Yen, Head of the Southern Office of the Trade Promotion Agency under the Ministry of Industry and Trade, Vietnam’s integration has opened doors to over 60 major markets worldwide. With key pacts such as the EVFTA, CPTPP, and RCEP, the country’s total trade turnover reached US$786.2 billion in 2024, up 14.3 percent year-on-year, generating a surplus of $24.8 billion. This progress has helped Vietnamese goods secure stronger positions on the global trade map.
Several firms have successfully capitalized on FTA preferences. Sienna Vietnam reduced import tariffs on plastic packaging testing pens from 25–37.5 percent to zero under the EVFTA, boosting competitiveness in Europe. Chien Thang Garment JSC secured 90 percent of its revenue from the EU by sourcing raw materials domestically. Meanwhile, ANTO Tea’s Hibiso brand entered South Korea and the Netherlands by fully meeting origin and quality standards.
However, such examples remain rare. On average, only 30–40 percent of Vietnam’s export turnover benefits from preferential tariffs. Utilization is relatively higher in traditional markets—65.1 percent with India, 41.8 percent with China, and 40.1 percent within ASEAN—but extremely low under newer-generation FTAs: just 1.8 percent for RCEP and 8.8 percent for CPTPP. These are troubling figures, given that Vietnam is regarded as one of the most open economies in the region.
The reasons behind this situation are manifold. Vietnam’s exports remain heavily reliant on major markets such as the US and China, while low localization rates make it difficult for businesses to meet rules-of-origin requirements. Production continues to depend largely on imported materials, exposing supply chains to disruption risks. At the same time, increasingly stringent international standards on the environment, labor, food safety, and intellectual property have driven up compliance costs, often beyond the capacity of many small and medium-sized enterprises.
In the first half of 2024 alone, Vietnam faced 57 alerts over banned substance residues in farm exports, up 80 percent year-on-year. Produce such as dragon fruit, durian, okra, chili, and spices faced heightened inspections, reflecting stricter SPS barriers. From a governance perspective, Ms. Dinh Thi Huong Giang, a representative of Grant Thornton Vietnam, observed that many domestic enterprises still lack financial transparency, with accounting data yet to be fully digitalized and risk management systems remaining underdeveloped. As a result, when entering global supply chains, these firms often struggle to pass supplier audits, which impose strict requirements on transparency, ESG compliance, and risk control.
Synchronous solutions needed for breakthrough
The Government has introduced measures including Directive 38/CT-TTg, Resolution 93/NQ-CP, electronic certificates of origin, and an FTA Index to track local implementation. But experts stressed that enterprise initiative is decisive. Companies need to upgrade product quality, improve labor and environmental practices, and develop supporting industries and strengthen intra-regional linkages to raise localization rates and meet the rules of origin.
Greater collaboration between domestic firms and FDI enterprises could unlock synergies in origin compliance and management know-how. Tools such as tariff lookup systems and blockchain-based traceability may boost transparency and market access. Additional State-backed financial support is also considered critical for SMEs to meet compliance costs.
Ms. Ho Thi Quyen, Deputy Director of the HCMC Investment and Trade Promotion Center (ITPC), affirmed that HCMC will continue to support businesses through seminars, training, trade connections, and market intelligence to enhance competitiveness and build confidence in global integration.
