Supporting policy response for small and medium enterprises in FTAs

Talking to Customs News, Dr. To Hoai Nam, Standing Vice Chairman and General Secretary of the Vietnam Association of Small and Medium Enterprises, said that small and medium enterprises face more challenges in the process of integration and making effective use of free trade agreements (FTA) due to many internal obstacles and legal regulations.

Dr. To Hoai Nam, Standing Vice President and General Secretary of Vietnam Association of Small and Medium Enterprises.

How do you evaluate the policies for small and medium enterprises in FTAs ​​that Vietnam has been and will be implementing?

Vietnam has signed and implemented 15 FTAs, including many new generation FTAs ​​with high standards such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), FTA between Vietnam and the Union European Union (EVFTA), Regional Comprehensive Partnership Agreement (RCEP). In these FTAs, small and medium enterprises have also been a focus and set aside their own terms and commitments. Therefore, the implementation of these commitments helps small and medium enterprises have a more suitable business environment and make good use of opportunities for integration.

Moreover, many commitments in the FTAs have been consistent with Vietnam’s laws and policies, so the implementation will be relatively easy and convenient.

For example, in terms of subsidies and support for small and medium-sized enterprises, Vietnam has many policies to support this business community in terms of training, research, legal issues, marketing, and trade promotion. This support is consistent with the provisions and commitments in the FTA, so they will meet the requirements of supporting integration work for small and medium enterprises.

Along with that, many regulations related to intellectual property, international cooperation, trade, customs and trade facilitation are also basically compatible between the provisions of Vietnamese law and commitments in the FTAs.

What obstacles are Vietnamese small and medium enterprises facing in order to follow these policies, sir?

The Vietnamese small and medium enterprise community accounts for 96% of enterprises in Vietnam, but the scale and competitiveness is still weak. Therefore, it is still very difficult to follow policies for small and medium enterprises in FTAs. Moreover, the understanding of the law, the grasping of information on international economic integration, and information on FTAs ​​are also limit ations for many small and medium enterprises. If not fully equipped, it is difficult to take full advantage of the opportunities and impacts that FTAs bring. In addition, the biggest challenge for Vietnamese enterprises is the ability to cooperate with each other to exploit the market.

Though the commitments in the FTAs for small and medium-sized enterprises have the highest relevance, there are still many “barriers” such as on animal and plant quarantine, anti-dumping and intellectual property, so it is difficult for small and medium enterprises to ensure compliance.

What changes do small and medium-sized enterprises in Vietnam need to make to take advantage of opportunities from FTAs?

Due to difficulties from the pandemic, Vietnamese businesses in general and small and medium-sized enterprises in particular must fully exploit the market from FTAs ​​and act as soon as possible.

Enterprises also need to be more proactive in international integration, in the spirit of promoting self-reliance to overcome challenges, thereby contributing to transforming the business environment, approaching international standards and consider this a great opportunity to mobilize investment capital, combined with the integration of sustainable development goals into business and production strategies, helping businesses become more attractive.

In addition, small and medium-sized enterprises must strengthen cooperation, by all means participate in the supply chain. However, businesses should not be too hasty, but must carefully study the regulations, carefully prepare resources, pay attention to the rules of origin, labor, safety, environment, consumer culture for quality products, without damaging their reputation and brand. Businesses also need to prepare and accelerate the process of digital transformation, because digitalization is one of the important platforms to respond to developments in domestic and international markets.

Regarding policies, the State needs to create an open mechanism in all aspects to attract investment capital flows, adjust and supplement legal regulations in the direction of increasing the right to own, hold, use and dispose of assets of individuals.

In particular, management agencies need to continue to implement the policies in the Law on Supporting Small and Medium Enterprises as well as regulations and policies on supporting businesses affected by the Covid-19 pandemic. With FTAs, more attention should be paid to propaganda and law dissemination. In particular, with commitments related to small and medium enterprises, it is necessary to have separate support activities, information must be more specific and in-depth.

On the side of the Ministry of Industry and Trade and the Ministry of Finance, I suggest that the two ministries study and develop a support program for small and micro enterprises to have access to improve their competitiveness and improve their digital transformation capacity. Because these are the problems that small and medium enterprises face.

Thank you Sir!