Extensive reforms behind the border

When the Covid-19 pandemic, which started in Wuhan in China a year ago, broke out, even the most optimistic person could not imagine that the Vietnamese economy would stand firm.

With the world's most open economy (import and export equal to 200% of GDP), heavily dependent on the international market, the Vietnamese economy was projected to be risky and vulnerable.

However, toward the end of the year, the economy's import and export activities became more vibrant and reached numbers that satisfied the most skeptical economic analysts.

“I am very happy to know that in difficult conditions in 2020, we have 31 export items worth over $1 billion, with nine items with export revenues of over $5 billion and six items with over $10 billion," Prime Minister Nguyen Xuan Phuc said.

According to the Ministry of Industry and Trade, the total import and export turnover in 2020 reached nearly $544 billion, up 5.1% year on year; and trade surplus hit a record of $19.1 billion, much higher than $10.9 billion of the previous year.

Trade surplus in 2020 is higher than that of 2019 ($10.9 billion) and 2018 ($6.8 billion), nine times higher than 2017 ($2.1 billion) and nearly 11 times higher than 2016 ($1.8 billion).

Vietnam had trade surplus mainly with developed countries, which have strict quality requirements for imported goods such as the US (trade surplus of nearly $62.7 billion) and the EU (nearly $20.3 billion).

Prime Minister Nguyen Xuan Phuc emphasized that Vietnam has become the 22nd largest export economy in the world, with the export growth rate 4 times higher than the world average.

According to the Minister of Industry and Trade Tran Tuan Anh, Vietnam has participated in negotiation and signed 15 Free Trade Agreements (FTAs), becoming an economy with large openness and having trade relations with over 230 markets in the world.

He said that the EU- Vietnam Free Trade Agreement (EVFTA) has an economic scale of up to 30% of global GDP, and the economies in the Regional Comprehensive Economic Partnership (RCEP) have the same size. By joining these agreements, Vietnam has penetrated into an economic region which accounts for 60% of global GDP.

"With the commitment to cutting tariffs deeply under these agreements, Vietnam's products and services have an unprecedented opportunity to access foreign markets," he said.

Not only open the door with zero tariff rate, the new generation FTAs also include a multitude of behind-the-border reform commitments, in line with Vietnam's self-reform efforts.

Extensive reform

For example, according to the commitments in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and EVFTA, state-owned enterprises (SOEs) must be placed in a competitive environment in both the domestic market and the markets in the agreements. The State is not entitled to give incentives to, finance, offer debt write-offs or debt guarantees, or cross-offsetting for SOEs, including those operating in monopolistic sectors.

In terms of government procurement, public investment procured by state agencies will be implemented through bidding in member countries. Member countries also have to ensure transparency in bidding, setting up an electronic bidding system.

Workers also have the right to form trade unions at the grassroots level, the right to join trade unions, and unite trade unions.

In terms of e-commerce and telecommunications, regulations are very broad and open, and not just limited to buying and selling commercial goods, but all digital transactions.

The basic content is the freedom to circulate and store information without being controlled or prevented (content related to national defense, security, and ensuring social order and safety). No tax is imposed on cross-border e-transactions, and servers are not required to be located in a specified location, even within a country.

The commitment to internal reform and the unprecedented opportunity to reach the global market are all very good for Vietnam in all cases.

With the success in implementing the dual goal of anti-epidemic and economic development, the national brand value has increased by 29% compared to last year, to $319 billion. As a result, Vietnam’s position in the Top 100 most valuable national brands in the world has increased by nine spots to stand at 33rd.

This is thanks to the Government's efforts to reform the business investment environment, improve export and import performance, support the building of product and enterprise brands, and maintain macro stability and more positive forecasts on economic growth in the near future.

Tu Hoang

Two resolutions for reform

The Government has issued Resolutions 01 and 02, showing the spirit of reform and steadfast effort over the years to remove barriers in the business environment, helping people and businesses to thrive.