The Ministry of Industry and Trade reported the results of the FTA Index 2024 to the Prime Minister. The results cover each component of the Index: FTA information and dissemination; development and implementation of legislation; FTA utilisation and support for stronger competitiveness; and sustainable development. These are areas of particular interest to businesses seeking to take advantage of FTA opportunities. The report uses an integrated analytical approach and reference data to ensure objectivity and accuracy in reflecting local FTA implementation in 2024. The results are presented below.
FTA information and dissemination
1.1. Businesses’ understanding of FTAs
According to the survey results, the proportion of businesses clearly understanding FTAs has improved compared to previous years. Among the FTAs that businesses responded to, the FTA agreement between Viet Nam and Korea (AKFTA) had the most businesses clearly understanding at 23.6%, followed by the ASEAN-China agreement (ACFTA) at 18%, the EVFTA agreement at 13.6%, the CPTPP agreement at 11.3%, the Regional Comprehensive Economic Partnership agreement (RCEP) at 10.2%.
Among the surveyed businesses, FDI businesses have the highest rate of understanding FTA agreements, followed by state-owned businesses and finally non-state businesses. For example, with the CPTPP agreement, the understanding rates for FDI businesses, state-owned businesses and non-state businesses are 14.4%, 11.4% and 10.1% respectively. With the EVFTA agreement, the understanding rates are 18%, 15.6% and 11.9% respectively; for the UKVFTA the understanding rates are 11.8%, 9.1% and 7.4% respectively; for the RCEP the understanding rates are 13.9%, 11.6% and 8.7% respectively.
1.2. Quality of information provided by regulatory agencies
The quality of information provided by regulatory agencies is positively assessed. The proportion of businesses assessing the quality of information provision according to the criteria of "partially meeting" of the central agency is 90.7% and that of the local agency is 91.3%. However, in the criteria of "fully meeting the needs of businesses", this rate is only modest at 14.2% and 15.8%, respectively.
1.3. Business participation in FTA communication and dissemination events and the quality of those events
The survey results show that 12.4% of businesses answered "very often" and "regularly" participated in communication and dissemination events organized by regulatory agencies, 35.3% of businesses reported that they occasionally participated, 16.6% of businesses reported that they rarely participated, and 35.6% of businesses reported that they did not participate in these events. FDI businesses and state-owned businesses tend to participate more than non-state businesses. Regarding the quality of popular communication events, businesses have relatively positive evaluations. Regarding the aspects of topics, speakers, content and documents, the rate of evaluations at good and very good levels is 66%, 74%, 61%, 71% respectively.
1.4. Participation in and quality of trade promotion programmes
According to the survey results, the proportion of businesses regularly and very frequently participating in trade promotion programmes is 17.1%. The proportion of businesses occasionally participating in trade promotion programmes is 47.1% while up to 35.8% of businesses reported that they rarely or never participate in these programmes.
Regarding the quality of trade promotion programmes, 47.3% of businesses have good evaluations. The content that many businesses rated well was the handbook or document provided at 48%. However, regarding the criterion of "whether it meets the requirements of the business or not", only 45.7% of businesses rated positively.
1.5. Provision and quality of market forecasts and guidance
The survey results showed that 26.2% of businesses reported that they regularly received forecasting information, import and export orientation provided by local regulatory agencies. The level of very frequent receipt accounted for a low rate of 4.3%. Meanwhile, about 14.7% of businesses reported that they did not receive information at all and 41.2% of businesses said they occasionally received information.
Regarding the quality of information, 49.2% of businesses rated the overall quality as average, 43.3% of businesses rated the specificity of the information as good, 47.6% of businesses rated the reliability of the information as good, and 42.1% of businesses said that the timeliness of the information was also good.
Development of legislation
2.1. Businesses’ awareness of legal documents implementing FTA commitments
The survey results show that, regarding the regulations on special preferential tariffs under FTAs, 30% of businesses clearly understood but were not affected, 23.9% of businesses clearly understood and were affected, 21.1% of businesses had only heard about it, 16.6% of businesses did not clearly understand it and 8.5% of businesses did not know about the documents.
Meanwhile, for regulations on rules of origin, 20.5% of businesses clearly understand but are not affected, 11.1% of businesses clearly understand and are affected, 13.8% of businesses have heard of them, 22.6% of businesses do not know clearly and 32% of businesses do not know about the documents.
For other regulations that are incorporated into domestic law, 29.6% of businesses clearly understand but are not affected, 28.1% of businesses clearly understand and have been affected, 19.7% of businesses have heard of them and 15.4% of businesses do not clearly understand them.
2.2. Access to legal documents before and after issuance
For documents before promulgation, 23.4% of businesses can easily access them, 16.2% of businesses can access them but with quite a lot of difficulty, 13.4% of businesses can access them but have to request them, 14.8% of businesses know them but cannot access them and 32.1% of businesses do not know the draft documents.
For documents after promulgation, 46.4% of businesses said they can easily access them, 14.1% of businesses can access them themselves but with quite a lot of difficulty, 13.8% of businesses can access them but have to request them, 9.1% of businesses know them but cannot access them and 16.5% of businesses do not know about the documents.
2.3. Local guidance for businesses on legal documents implementing FTAs
For regulations on special preferential tariffs under FTAs, 23.1% of businesses said that local regulatory agencies only provide guidance when there are new documents, 19.9% of businesses reported that they provide regular guidance, 28.4% of businesses reported that they occasionally organize guidance for businesses, 13.4% reported that they rarely provide guidance and 17.3% of businesses reported that they do not know about this guidance or organization. For regulations on rules of origin, 23.7% of businesses said that local regulatory agencies only provide guidance when there are new documents, 23% of businesses reported that they provide regular guidance, 26.2% of businesses reported that they occasionally organize guidance for businesses, 11% reported that they rarely provide guidance and 16.1% of businesses reported that they do not know about this guidance or organization.
Regarding other regulations, 15% of businesses said that local regulatory agencies only provide guidance when there are new documents, 16.4% of businesses reported that they provide guidance regularly, 22.3% of businesses reported that they occasionally organize guidance for businesses, 9% reported that they rarely provide guidance and 37.2% of businesses did not know about this guidance or organization.
2.4. Quality of local guidance on legal documents implementing FTA commitments
The survey results show that only 10% of businesses rated the quality of guidance from local agencies as very good, 38% rated it as good, 46.2% rated it as average (accounting for the highest rate), 3.9% rated it as poor and 1.8% rated it as very poor.
FTA utilisation and support for stronger competitiveness
3.1. Level of FTA utilisation
Among the FTAs that businesses responded to, the ASEAN-China FTA (ACFTA) and the EVFTA were most effectively utilised by businesses, with rates of 40.9% and 37.1%, respectively. The CPTPP and RCEP were used by businesses at an average level, with rates of 35.1% and 33.7%, respectively. Notably, the UKVFTA had a rather modest rate of effective utilisation by businesses, at only 28.8%.
The ability to effectively utilize FTAs varies by business group. The FDI business group had the highest rate of effective and very effective utilisation, specifically 63.2% for the ACFTA, 55.4% for the EVFTA, 50% for the CPTPP, 42% for the UKVFTA and 48% for the RCEP. Next is the group of state-owned businesses with effective and very effective utilisation rates under the ACFTA, EVFTA, CPTPP, UKVFTA and RCEP agreements of 60%, 55%, 49%, 34% and 40% respectively. Non-State businesses have the lowest effective and very effective utilisation rates, with the corresponding rates under the above agreements being 57%, 45%, 42%, 34% and 41%.
3.2. Effectiveness of programmes and policies supporting stronger business competitiveness
The survey results show that 34.1% of businesses rate the performance of local regulatory agencies as “very effective” or “effective”. Among the support programmes and policies for businesses, the policy to support businesses connecting with FDI businesses in Viet Nam has the highest rate of businesses evaluating it as “effective” and “very effective” at 33%, followed by the policy to support responding to trade defence measures, building and protecting brands at 32%. The policy to support the application of science and technology and support access to credit has the lowest rate of businesses evaluating it as “effective” and “very effective” at only 28%.
3.3. Need for programmes and policies supporting stronger business competitiveness
Businesses are very interested in support programmes and policies specifically for taking advantage of FTAs, with 78.3% of businesses saying it is “very necessary” and “necessary”. Support programmes and policies specifically for import and export businesses also received great attention, with nearly 80% of businesses saying they were “very necessary” and “necessary”. Programmes to deal with internal problems of businesses, such as capital, technology, etc. or other programmes received less attention, with about 75% of businesses saying they were “very necessary” and “necessary”.
Sustainable development
4.1. Businesses’ understanding of sustainable development issues
In the field of labour, 19.1% of businesses reported that they “fully and clearly understand”, 38.6% of businesses “partially understand”, 16.1% do not understand clearly, 18% have heard of it, and 9.5% do not know. In the field of environment, the corresponding rates are 20%, 38%, 16.2%, 17%, 8.5%.
4.2. Impact of compliance with sustainable development commitments on business operations
In the labour sector, 11% of businesses said that compliance with commitments “greatly affects” their operations, 24% said “greatly affects”, 33% said “has an impact”, 16% said “little impact”, and about 8% said “no impact”. In the environmental sector, the corresponding rates are 12%, 24%, 37%, 17% and 7%.
4.3. Effectiveness of support programmes for implementing sustainable development commitments
Regarding the effectiveness of support from local regulatory agencies for sustainable development issues, in the labour sector, 9.5% of businesses rated it “very effective”, 36.1% rated it “effective”, 41.4% rated it “average” and only 2% rated it “ineffective”. In the environmental sector, the corresponding rates were 10.1%, 36.8%, 40.5% and 1.9%.
Source: Multilateral Trade Policy Department, Ministry of Industry and Trade.