Vietnam's signing of the Free Trade Agreement with the European Union (EVFTA) and the Investment Protection Agreement with the European Union (IPA) are managed by economic authorities, economic experts and the business community. Evaluation is a great opportunity for the development of businesses and the country's economy. However, businesses and industries need to be proactive, effective and timely solutions ... to grasp this opportunity well.
Production line of Tetra Pak Binh Duong Joint Stock Company. Photo: Tieu My
Need to master the agreement
Under terms in EVFTA and IPA, nearly 100% of tariff lines are cut to 0%. Currently, Vietnam is enjoying the universal tariff preferential regime (GSP - incentives that the European Union (EU) unilaterally for products without good competitiveness from certain developing countries / underdeveloped countries. According to the criteria decided by the EU, the average is 9%) in the EU but only 42% of the tariff lines are entitled.
When EVFTA comes into effect, GSP regulations will no longer apply to Vietnam and import tariffs will apply to MFN tariffs (averaging 12%) and will gradually decrease to 0% under Route 3 - 7 years. Thus, in the first few years of EVFTA implementation, some of Vietnam's exports will not benefit from this agreement (since the tax reduction from 12% will still be higher than 9% under GSP). But when the roadmap for tax cuts ends, Vietnamese goods will benefit significantly from EVFTA as the export tax gradually decreases to 0%.
It is noted that, with EVFTA, all of Vietnam's main export products to EU enjoy preferential treatment, which are key and key sectors of Vietnam such as rice, coffee, honey, livestock products, fruit, seafood, processing ... EVFTA is in effect, these industries enjoy very high incentives right from the first tax cut in the first year.
In Binh Duong, local products are expected to have strong growth in the European market, such as textiles, footwear, wood processing industry, electronic components ... will also enjoy the conditions Tariffs are very preferential when the EU implements cuts in subsequent years. However, in the current situation, when businesses in the province are still small, with low technology, EVFTA will set many challenges and requirements for businesses to implement effectively to cope with challenges. but still can exploit the opportunities brought by the agreement.
Mr. Jeffrey Fielkoww, Managing Director of Tetra Pak Binh Duong Joint Stock Company (Vietnam - Singapore Industrial Park II), said FTAs are an important highlight for foreign businesses to invest in Vietnam. For export businesses, what they want is to simplify business processes and move towards sustainable development. However, businesses do not know much about EVFTA's preferential terms yet. Tetra Pak Binh Duong has a factory integrating the latest technologies and international production standards to serve customers most effectively, ensuring food hygiene and safety, improving product quality and contributing into the national economy.
Not easy for the banking industry
Many economic experts said that EVFTA was officially signed, commercial banks (commercial banks) will step into a new economic integration environment. With this agreement, Vietnam's financial market is facing great opportunities and challenges. First of all, the financial market will be expanded outside the country, bringing new sources of customers to joint-stock commercial banks.
Along with that, commercial banks will have access to many different sources of mobilized capital in order to minimize the cost of raising their capital. Commercial banks have the opportunity to use high quality human resources in the region and internationally; have learned from competitors, from strategic partners to increase the quality of products and services and raise the current position.
However, commercial banks will also face many competitors of world and regional scale. Besides, commercial banks are able to attract high quality human resources to other financial and banking institutions. At the same time, commercial banks will be looked at by larger competitors and can carry out mergers and acquisitions (M&A) in order to take over and dominate business activities.
Therefore, according to Dr. Nguyen Quang Minh, Thu Dau Mot University, Vietnam's commercial banks need to have policies to attract and use staff with good management capacity and at the same time need to have preferential treatment. Enlightenment worthy of this team. In the current period, the income of employees from banks is tending to be no longer as good as before compared to the average level of jobs, along with the pressure on the much-assigned work targets. Therefore, new graduates or those who have gone to work are no longer interested in the work environment of the banking and finance industry, which is also a good opportunity for foreign banks to make use of.
In addition, domestic commercial banks need to gradually transfer transactions by meeting directly through electronic banking transactions, using the Internet with products of technology application 4.0. These transactions will gradually replace transactions that directly meet customers to avoid losing time for both banks and customers, thereby making the most of existing human resources, avoiding having to use much human factors.
The use of a large number of workers has the advantage that when the number of customers reaches the east, the job can be solved, but when the customer is absent, the labor force is redundant. Domestic commercial banks should also have plans to merge strong banks together to increase the scale of capital and assets, increase the competitiveness.
Reported by Tieu My – Translated by Vi Bao
