Localities should focus on strategic commodities rather than providing general support to all sectors in order to take full advantage of Vietnam’s free trade agreements (FTAs), an expert has said.

Deputy Director General of the Ministry of Industry and Trade’s Multilateral Trade Policy Department, Mr. Ngo Chung Khanh, addressed a workshop on December 2 on the enhanced role of cities and provinces in helping local enterprises utilize FTAs.

Though exports to FTA markets have increased considerably, he said, the existing space still remains large because only 38 of Vietnam’s 63 cities and provinces are doing business with signatories to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

He said this may be due to limited resources or other issues that have resulted in support from local authorities for businesses remaining unsatisfactory.

By way of example, he said training workshops and conferences have been organized to provide consultancy and assistance to enterprises, but in most cases those in attendance were staff rather than business owners and leaders who are actual decision-makers. Senior leaders are crucial in adjusting business strategies to make full use of the benefits offered from FTAs.

“Thus, the support of relevant authorities and links with enterprise decision-makers are quite limited,” Mr. Khanh said. “Due to limited resources, localities should focus on one or two strategic commodities, and then develop an ecosystem of support.”

According to the Deputy Head of the Legal Department at the Vietnam Chamber of Commerce and Industry (VCCI), Mr. Pham Ngoc Thach, studies by VCCI reveal a major gap between the actual needs of enterprises and the ability of relevant State and local bodies to meet such needs.

Head of the Trade Management Division at the Ba Ria-Vung Tau Provincial Department of Industry and Trade, Mr. Dinh Trong Cuong, said enterprises now have a better understanding of FTAs and their benefits but there are limitations regarding their capacity to meet quality standards and promote products in FTA markets as well as gain access to potential customers.

Mr. Khanh said it is necessary to renew the methods of supporting enterprises and that support must be based on the actual needs of enterprises.

For instance, certain businesses spoke of obstacles in terms of export administrative procedures, so it is imperative to review related legal documents or cut and streamline administrative procedures in the process.

“Additionally, it is necessary to create a connection mechanism between central and local bodies and between State bodies and enterprise associations; and to mobilize the involvement of specialists and relevant organizations to better assist businesses,” he said.

The government has approved the Ministry of Industry and Trade’s proposal to develop an FTA Index to assess the implementation of FTAs by localities on an annual basis.

“We hope the FTA Index will be officially launched in 2023, which will be a reliable measure to adjust and develop appropriate support policies, helping enterprises effectively make full use of the opportunities and benefits of new-generation FTAs,” Mr. Khanh said.