Spotlight: Upgraded China-ASEAN FTA brings huge opportunities to Vietnam

Source: Xinhua| 2019-10-28 16:22:43|Editor: huaxia
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HANOI, Oct. 28 (Xinhua) -- Vietnam's leading dairy producer TH Group, the first Vietnamese enterprise granted transaction codes to export milk products to China, looked forward to tapping opportunities for Vietnam's dairy products brought by the upgrading protocol of China-ASEAN Free Trade Area (CAFTA).

At a ceremony marking Vietnam's export of the first milk batch to China on Oct. 22, Vietnamese Minister of Agriculture and Rural Development Nguyen Xuan Cuong said, "China, with a population of nearly 1.4 billion people, is a huge market with tremendous potential and has great demand for agricultural products such as dairy ones."

One the same day, the upgrading protocol of CAFTA was fully implemented among all is members, bringing more visible and tangible benefit to local business such as TH Group.

In 2017, TH Group formed a branch to promote its products in the Chinese city of Guangzhou. In October 2019, it became the first Vietnamese enterprise granted transaction codes to export milk products to China, timely tapping opportunities brought by the upgrading protocol of CAFTA.

"Today I am very happy, want to shed tears of happiness," said Thai Huong, founder of TH Group at the ceremony.

"I am happy not just because the Chinese market is very open, business is convenient, bringing lots of money. I am happy because this is a turning point, the first step for Vietnam's dairy products to enter a demanding market like China," said Huong, adding that TH Group has signed a distribution contract with its Chinese partner, pledging 50 million U.S. dollars in annual revenue.

"We hope the Vietnam Dairy Association will have a plan together with the Ministry of Agriculture and Rural Development to introduce policies to entice other businesses to go along this path, with the involvement of Vietnamese agricultural industry, to realize the advantages that Vietnamese farmers have," said Huong.

"As a neighboring country, Vietnam also needs many products in which China has production advantages. The two countries' agricultural products are mutually complementary, and it is expected that in the near future, more Vietnamese companies will be allowed to export agricultural products to the Chinese market," noted Cuong.

With simplified rules of origin, customs procedures, trade facilitation and investment regulations, the upgrading protocol will bring about many trade and investment opportunities to the Association of Southeast Asian Nations (ASEAN) countries, including Vietnam, a senior expert of the Vietnam Chamber of Commerce and Industry (VCCI) told Xinhua on Sunday.

"For example, with simplified rules for trade of services, ASEAN countries and China will have easier access to such sectors as construction, tourism, sporting, securities, engineering and healthcare," the expert said, adding that with their deeper economic and technical cooperation, ASEAN and China will realize two-way trade of 1,000 billion U.S. dollars and foreign direct investment of 150 billion U.S. dollars by 2020.

While more and more countries are engaging in trade protectionism, ASEAN members and China are pushing up regional and global trade liberalization because the upgrading protocol encourages the two sides to deepen economic and technical cooperation on various activities and spheres.

According to local analysts, the full implementation of the upgrading protocol is the newest step to realize a more comprehensive, practical and fruitful free trade agreement between ASEAN and China to create a further engaged economic region.

Since China is determined to further open its market and intensify imports, promoting free trade and globalization, the protocol's full implementation will offer more chances for ASEAN goods, including Vietnamese ones to penetrate into one of the world's largest consumer markets, Vo Dai Luoc, former head of Hanoi-based Institute of World Economics and Politics under the Vietnam Academy of Social Sciences, told Xinhua on Sunday.

Vietnam is particularly advantageous due to linked geography and the availability of complementary products, especially agricultural ones that China has great demand for and currently applies preferential import duties, noted Luoc.

Now the upgrading protocol introduces clearer and simplified regulations on goods origin, improved supervision over good quality, besides strengthening provisions for investment promotion and facilitation.

If Vietnamese firms can comprehend and meet export requirements under the new rules, there will be a huge opportunity to increase export to China, the expert said.