Illustrative photo. (Source: VNA)
The World Bank (WB) has issued several recommendations to help Vietnam enhance its international integration and capitalise on the EU-Vietnam Free Trade Agreement (EVFTA), which is expected to come into effect shortly.
In a recently-released report entitled “Vietnam: Deepening International Integration and Implementing the EVFTA”, the WB suggested the country perfect its legal framework and improve its implementation capability so as to fully reap the benefits.
The report estimated that full implementation of the EVFTA could increase Vietnam’s GDP by 2.4 percent, boost exports by 12 percent, and lift an additional 100,000 to 800,000 people out of poverty by 2030. These benefits are necessary for sustaining economic achievements while the country is dealing with the COVID-19 pandemic.
Benefits from its participation in new-generation FTAs such as the EVFTA and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) would be even greater if Vietnam implemented a comprehensive economic and institutional reform programme, according to the WB. These reforms would give a boost to productivity, helping its GDP increase by a further 6.8 percent to 2030.
It also said Vietnam should promote its capacity to comply with rules of origin, sanitary and phytosanitary measures, and the State-investor dispute settlement mechanism.
The report called on the country to bolster links between domestic suppliers and foreign-invested enterprises that are lead firms in major global value chains. The EU’s strict food safety requirements also require that Vietnam improve sanitary and phytosanitary measures in a more transparent and consistent manner.
Thanks to the EVFTA, Vietnam will become a destination for a number of investors from Europe and around the world, and when the inflow of foreign investment surges, grievances, complaints, and lawsuits will also increase, the report noted, advising that Vietnam accelerate the development of a systemic investment response mechanism for resolving investor-State disputes.
The WB also suggested that to maximise the benefits, support policies for post-COVID-19 economic recovery should prioritise key sectors that account for the majority of Vietnam’s exports to Europe./.