Survey of FTA Utilisation in Viet Nam

This report provides a summary of the key findings from a survey on free trade agreements (FTAs) utilisation by firms in Viet Nam. The utilisation rate was rather low until 2005, and has only improved gradually in recent years. As most FTAs are new, they have only modest relevance to the past investment decisions of firms in Viet Nam. The key constraints in using FTAs are failure to meet rules of origin (ROOs) requirement, lack of information, small trade volume, and small tariff benefits. The number of required documents and the time taken and costs incurred for obtaining Certificates of Origin (COOs) are generally thought reasonable, though scattered evidence shows that they are more problematic for small- and medium-sized enterprises (SMEs). Compliance with various COOs is another issue for firms, although the problem is rather modest. The Viet Nam Chamber of Commerce and Industry and government agencies are the main sources of information and support, but their role should be enhanced further. Specifically, the Government needs to provide more relevant information, simplify COO procedures, and work with partners to harmonise procedures. The business associations should continue to support firms in compliance with ROO requirements, and facilitate the sharing of experiences among members regarding issues with FTA utilisation.